The dictionary says that a commodity is "anything bought or sold.

" That's way too wide a definition for our use. In business, a commodity is a product or service over which the buyers have most of the influence when it comes to price. Mainly, this is because they see little or no difference between versions of this product or service as it's offered for sale. On the business side, if you're selling something that consumers see as a commodity, you have little chance of taking business away from your competitor because the only difference the consumer can see is price. Lack of other differentiation almost invariably drives down the selling price. That means you can't make a profit selling (what appears to be) the same damned thing as everyone else. The easiest differentiation is name. That's why you have Joe's Diner, Rita's Diner, Mel's Diner, etc. As long as the named person is some kind of celebrity, or is known by the intended customer in some capacity, then they have a chance at getting some of the business in that industry. But as soon as an "outsider" wants to purchase what you and your neighbors are selling, the name difference is negated. So calling your business "Joe's Web Hosting" will, by itself, get you no customers. We are programmed to look for differences. In a crowded field of competitors, setting yourself apart in some way is necessary. Ultimately, you are looking to create and direct your brand. Most people can't accurately define what a "brand" is. Most assume that a company's logo, or the proprietary typeface with which it's name is spelled is the "brand." Here's a concept most business owners don't seem to want to understand: A brand exists only in the minds of your consumers, potential consumers, competitors, peers and the public at large. You can try to create and influence your brand, but that's all. A brand is a shortcut in a person's mind. If I mention the name of a national burger chain (let's call it JesterBurger) to you, all the thoughts, memories and feelings you have about that particular place is the brand. Huge corporations try to influence your thoughts and feelings via advertising campaigns, store layout, customer service, and a million other interactions. If you are a hard-core vegan, your perception of any burger chain is likely to be negative, regardless of how positively they promote themselves, and how great your friends feel about eating there. There are essentially three levels of information gathering. For our purposes, we'll talk about Primary, Secondary, and Tertiary. Primary information source gathering consists of actually experiencing something (a product or service, in our case).

You sit in one of the comfortable booths. the colors are bright. and the people behind the counter are smiling. what services you offer. You walk into a branch of our fictional JesterBurger. you throw your garbage into the conveniently located can. Similarly the person running JesterBurgerSucks. You need to focus on a few key things about you and your company that would appeal to potential clients. and you tell her it was JesterBurger. The water is quickly hot enough to wash with soap from the dispenser above the sink. She's never been there and asks whether you'd recommend it for lunch. After finishing your meal. bite into your JesterBurger Deluxe and decide you enjoy the taste and texture. or Word Of Mouth. A simple. No. and you air dry your hands with the air jet. Tertiary information comes from things like media stories. Although JesterBurger has done everything they possibly can to positively influence your experience during your visit. you tell her. they call it Buzz Marketing. there was a screaming kid next to you all during lunch. The thoughts and feelings you have about JesterBurger after your visit are from a Primary source .well. You order a complete meal. You notice that the restroom is well maintained. When marketing professionals try to create and manage it. and other sources. and looks and smells clean. representative list might be: * Location (local vs exotic) * Services (broad vs narrow) .Secondary information source gathering is hearing about other peoples' Primary experiences. Tertiary is . These are usually created. or at least placed. everything else. Your friend asks you where you had lunch. Don't go.com has probably loaded their site with negative information. marketing materials. all in an instant.you actually went there and had an experience. You see that the place is clean. and how you're unique as compared to all your potential competition. Your bad review to your friend is an example of a Secondary source. What does this have to do with defining your brand? You are trying to make certain that your potential client understands what it is that you do. and head for the restroom to wash your hands. The food appears quickly and the temperature is hot enough that you can assume it was freshly made. and is also trying to influence your opinion. and are happy to receive most of your $10 bill back as change. by the subject company trying to influence your thoughts. It's called anecdotal evidence. advertisements. your perception can be influenced by anything and everything during your Primary experience.

which will be published in Summer of 2009. His articles on marketing and sales have appeared in publications across the US.) * Experience (big shop vs entrepreneur) * Price (low vs high) If you're in business. you have a brand whether you want one or not. your choice. Fulton NY 13069. Marketing Action and Sales Action. Suite A. by phone at 315-439-7326 and by mail at 151 North 2nd Street. with offices in Fulton. what image are you trying to project. Agile' publishes two monthly newsletters.com. If you don't attempt to control your brand and make the best impression possible. If you do try. This is an excerpt from his book. Profitable Web Hosting. and how will you go about it? Again. NY.* Time in businesses (new vs established) * Ownership (small vs large) * Design philosophy (simple vs fancy) * Attitude (funny vs serious) * Education (6th grader vs PhD. It's your choice to attempt to manipulate it or not. Scott Gardner is the owner of Agile' Marketing Services. H o w t o B r a n d a n d M a r k e t a . Agile' Marketing can be reached by e-mail at FultonOfc@AgileMarketingServices. you are letting your business be seen as totally interchangeable with all the other look-alike web hosts out there.

In the words of Scott Bedbury. Korea. put forth powerful brands with global impact. author of the book by the same name. We are seeing countries such as China.C o m m o d i t y Introduction Branding as a marketing strategy has seen a significant increase in interest in recent years due to a variety of factors." Definition of Commodity Commodity products are largely undifferentiated products that offer little or no perceived differences between competitive offerings. The Global Trend Toward Brands Companies on a global scale now realize that one of the most promising paths to long term longevity. a prosperous organization. They're discovering that it is desirable to compete on more than just price and volume. and healthy profits is to create and manage strong brands for their products and services. Companies are now fully realizing the importance of creating strong brands that provide real customer benefits so they can avoid the vicious practice of continual price slashing and cost reduction due to the downward pressure that exists in commodity markets. Commodity products are fungible as competitive offerings are easily . The increase in competition in just about every product category coupled with the ability for most consumers to quickly and easily seek out and compare all competing offerings via the Internet has put a great deal of pressure on brands to strengthen their positions and continually seek ways to deliver greater value to customers. India and Finland. These are lowly differentiated products or services with high levels of substitutability and straightforward price discovery. it is indeed "A new brand world.

consumers shop for commodities primarily on a low price basis. Study your competition and examine industry trends. conduct a communications audit to uncover the real messages you are sending to your internal and . Once you have defined your most important unique selling proposition. Your unique selling proposition (USP) tells your target market the main and most important reason they should choose your brand over competing brands. then you begin to build your brand based on it. How to Brand Your Commodity How then do you go about branding a commodity product? The answer lies in first identifying or devising ways to create unique attributes and unique promises of value offered solely by you and your product offering. Let's take a closer look at steps to commodity branding Step #1: Conduct a comprehensive audit Launch an initiative to understand how your current clients perceive you and your product or service. Producers of commodities are driven to compete on low price and high volume. and the market expands while prices decline as consumers demand price concessions. the market is mature enough to have attracted multiple competitors. Find out what all stakeholders think and feel about your brand. Commodity marketers are often very surprised to learn from customers that price is not the most important factor—let alone the only factor. This distinction as to why your brand is unique in your category is also referred to as your unique selling proposition. Conduct a brand audit and conduct primary research to understand why your customers choose your product. How are your competitors positioned? What are their brands' or products' strengths and vulnerabilities? How does your position compare with competitive positions and how will those positions be affected by industry trends? Conduct an internal audit in additional to your external audit.interchangeable. Your USP is a claim of a unique set of benefits not found anywhere else. In general. customers have widely adopted the product. With little-to-no perceived difference. What do they value? What guides their daily behavior on the job? What brand promises do they feel they must deliver on? Are their goals in line with the goals of your organization and your stated mission? Lastly. the product life cycle is at the point where significant customer education and assistance is not required.

Innovate and redesign your product to include new and unique features.external stakeholders through your communications. your company. Are your marketing communications saying the right things in the right ways consistently over time and across all media? Are your internal communications to employees and shareholders doing the same? If you discover some inconsistencies and liabilities during this phase. Step #2: Find and define points of differentiation in your offering Once you have conducted your audit and surveyed the competitive landscape. then you can make a list of all the ways you are unique. or other intangible qualities that are unique to your total product offering. "all of the products from us and our competitors are the same. the support you offer. your brand may offer value not found anywhere else. B) Plus 1 features "Plus 1 features" are small. fret not. or maybe even some strongly-held corporate belief or philosophy. Sometimes obvious differences will be defined in your product offering by this point. be it pleasant or unpleasant. Only once you have accurately diagnosed any illness can you begin to prescribe the cure. These attributes can apply to your product itself. Even in industries where clients say. something in the manufacturing process. Other times not. By adding incremental features into your product offering. once this . incremental differentiating features in products. however. Be wary. Remain objective and seek to define things how they really are. your service. What have some commodity sellers used as points of differentiation? A) New product features Look for ways to create new product features that certain customers will value. What else can serve as the basis for differentiation? Uncover hidden differentiators:Many things can serve as the basis of differentiation for and subsequent branding of your commodity. Suspend judgment on what you find. Provide reasons other than rock-bottom prices as to why you are different and why people should buy your products or services." we can find branding opportunities. Remember. What makes your company unique and preferred in the mind of the prospect might be something in the product. the most important goal to accomplish at this point is to emerge with an accurate picture of the current state of affairs.

This will help meet the needs of those who value additional assurance while proving a low cost option for those most driven by price alone. This strategy is often found in high technology industries where manufacturers will add Plus 1 features such as additional software pre-installed on computers. a supply of relatively inexpensive consumable items as "starter kits. Silver. however. or Internet service providers who offer spam blocking software or personal Website storage space as part of the purchase in addition to their core product offering. or being flexible with your payment terms to meet the standard business practices of your customers. Other ways to reduce or reverse risk are to offer free trials. promise free repairs or replacements.practice is common in any competitive environment there will come constant pressure to add Plus 1 features while continuing to cut price. new ring tones for mobile phones. value-added package. This can be a good strategy in high volume markets that are expected to last indefinitely. digital cameras in phone models. services. such as utility companies billing in equal. or options and package them together to create a "bundled". or delaying your invoicing. You may address such concerns by creating different levels of value to your customers such as a Bronze. I've seen companies offer extended warranties. lengthen money-back guarantees. 100-percent-satisfaction-no-questions-asked return policies. By segmenting your customers you may find different levels of risk-aversion amongst them. . or services into your package can significantly increase the value of your offering. and Gold levels of support packages available." and enhanced support packages in order to offer greater desired value to their customers and reduce the overall cost of ownership. features. D) Payment terms and guarantees Does everyone in your industry offer net 30 terms and 30-day guarantees? If so. offer "try before you buy" evaluations. then by offering more generous terms and longer guarantees you might be able to increase the value you offer without investing significant capital toward new product features and value-added "giveaways. predictable monthly amounts to counter spikes during peak usage months. You may be able to find ways to offer several features. F) Reduce uncertainty Offer money-back guarantees or other means to make it easier for customers to trust you. free financing." Other tactics might be to do simple things that make customers happier. E) Better quality Reduce your defect rates and the value you offer your customers will increase by improving reliability. C) Bundles Bundling several options.

Innovative. installation and training. J) Customer-driven added value Ask your customers what they wish you could offer or what they would like to see and often they will tell you exactly what you can do that cannot be found anywhere else. staggered shipments to meet your customers' inventory needs. Just make sure you do it in a way that is valid and statistically significant through research. You might just uncover a benefit that you never would have thought about on your own. and appealing packaging can alone be the only point of differentiation you need in order to start building a powerful brand. delivery. unique. They are comparing you against your competition constantly and will often have insights and data that you don't. H) Packaging and design Often innovative or eye-catching packaging of a product can serve as a strong differentiator and help become a part of the brand's DNA. fulfillment. or available backup delivery methods might be things you can explore. Don't try to guess what your customers might respond to. Step #3: Choose the most compelling and unique point of differentiation to create a strong position for your brand . That. and technical support. For example. Often by increasing your distribution network you can offer faster response and reduced delivery time. might make you unique in your industry… just be sure you deliver on your promises. I) Definition and communication Define and communicate your standards for secure ordering. it is nearly impossible to see the unique colors and artwork on a bottle of Tide laundry detergent and not know which brand it is—long before you even see the name on the label. Overnight shipping. Teflon and Dolby for its inspiration.G) Better product delivery Find a way to get product to your customers better or faster. Sometimes just being the person in your industry with the highest on-time delivery or fulfillment rate can make the difference. more secure shipping. You might just promise something that none of your competitors are willing to put in writing. Customers have a way of knowing what unmet needs there are and they are usually happy when a company comes along and asks them how to serve them better. Have a clear understanding of what your customers want and need before tying your brand to what you perceive to be a customer value. K) Look outside the industry for examples Intel looked to examples of component (or ingredient) branding in other industries such as NutraSweet. in and of itself. Airlines often use their "on-time departure" ranking as a differentiator. Ask them! More often than not they'll tell you.

This might cause competition with yourself.Perhaps even more important than defining points of differentiation for your brand is to make sure these points offer customer value for which your targeted customers recognize the value offered. . and be very difficult to manage. but not worth anything to you if your customers do not recognize them or see any value associated with them. unfriendly sales staff. least likely to be copied. Write a tagline or slogan for the brand that concisely captures and communicates the essence of your unique selling proposition. In the computer and software industry we often see customer resistance to purchasing from vendors who "lock in" customers through proprietary systems and software. so keep the message simple but memorable. unique. cannibalize sales of your higher profit offering(s). and most unique. poor post-sale support. Once you make your product or service distinctive. Step #4: Eliminate reasons for your customers not to purchase from you This one sounds deceptively simple. Step #5: Create a powerful image for your brand Create and build a powerful image for your brand. Be different! Find a way to offer something unique that cannot be found anywhere else. Be honest with yourself and seek to uncover and understand the reasons customers choose to not do business with you. Differentiators are nice. Identify the reasons people avoid choosing you and eliminate these reasons if you can. imagery and other devices that appeal to human logic and emotion. There may be many possible positions for your brand but it is important to choose the one that is most defendable. Other reasons people will not buy from you might be confusing billing and/or payment terms. but often companies unwittingly offer certain things or behave in certain ways that turn potential customers away. Why should somebody choose you over your competition other than price? The answer to this question might help you choose the best position upon which to build a strong brand. build your new image through a combination of words. and least easy-to-copy point of differentiation should be the unique selling proposition for your brand and serve as the basis for your branding efforts. Create a visually effective logo. Your most important. Build the image so it is distinctive and easily recognizable to your target market. or simply your location. most compelling. A brand must communicate what it distinctively stands for using as few words and/or images as possible. Do not try to incorporate so many points of differentiation in your positioning that your customers become confused or overwhelmed. Choose or create a memorable name for your brand.

product development. The brand value must be communicated clearly and consistently over time and across all chosen communications channels. an appealing logo. concisely. direct marketing. and stay ahead of the competition. advertising. Do this through a comprehensive program of differentiation.Image alone can help differentiate a commodity-whether based on real or perceived benefits—as long as the strategy is executed properly. delivery and quality . Strategic awareness occurs when not only do your customers recognize your brand. Such strategic awareness will allow the brand to enjoy greater loyalty from your market while commanding a price premium with better margins. and public relations. but they also understand the distinctive qualities that make it better than the competition. so continually stay ahead of the curve to ensure that your brand remains differentiated from the commodity pack mentality. Branding is more than the development of a memorable name. and consistently across all marketing communications channels will enable you to build strategic awareness. Step #6: Market the brand Brand communication is an essential part of building a strong brand for your commodity. All components of a brand must work together to create a differentiated personality for the brand that heightens awareness while building preference. Communicating your brand promise clearly. Once brand preference is created. Images can be built to inform consumers about hidden or small differences that they might otherwise be unaware of and thus turn these differences into something that. Going Forward Continually look for ways to innovate. promotion. in their own minds. then it becomes a scientific exercise to quantify the price premium that can be commanded by your brand. Highly targeted and sharply focused communication must take place within the framework of an integrated marketing communications plan that includes one or more parts of the marketing communications mix: personal selling. service. Only when strategic awareness is established can you hope to create brand preference within your market. or a catchy slogan. consumer research. image building. Strategic awareness occurs when you have differentiated your brand in the mind of your market. create customer value. they simply cannot live without. Eventually all forms of differentiation can be copied. A brand is an identifiable entity that makes specific promises of value and all aspects of your brand's identity must communicate those promises and convey the uniqueness of your brand so you create the desired image within your market. Commodity products require unusually clear communication of the value offered in both economic and emotional terms.

seek ways to protect your price by offering more value. Focus on continually improving the four core customer values of convenience. finding unique ways to differentiate yourself.improvement. Copyright 2005. availability. product or service functionality. perceived quality. you must resist the urge to cut prices. Summary Commodity selling is a challenge that presents unique opportunities for creative marketing. . All rights reserved. and creating powerful brands that foster price inelasticity. and relationship to find ways to continually increase the value you offer to your customers. Routinely measure factors such as: brand loyalty. When marketing and selling commodities. name awareness. Instead. relevance and preference. Dave Dolak.

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