Businessmen must understand that not every product or service is a so-called brand. Brands differ from commodities.
Commodities are a class of products, which provide the same function as others in their category. However, consumers cannot distinguish one commodity product from another believing that all commodities serve the same purpose. In most cases, price becomes the driver of purchase. Thus, a commodity may be present on the shelf today, but gone tomorrow if sales do not match company expectations.
Brands, on the other hand, refer to products, services and retailers, even people and associations, countries or geographical locations that consumers believe to be different or unique from others of their same class. Consumers have positive opinions or sentiments, even good feelings about brands.
While brands and commodities may have the same use or purpose, brands go beyond their functional use in the minds of consumers. Brands acquire a certain status, prestige and image that make buyers want to own brands even at a premium. The purchase becomes emotional rather than mere functional.
Unknown to many, brands were once commodities. The evolution from commodities to brands is a long step and requires commitment and sustainability.
How commodities have become brands
Visionary founders. Tony Tan and family founded Jollibee in 1975. Thirty-two years later in 2013, the Jollibee franchise soared to 752 branches and has expanded to become a conglomerate with at least 2,000 branches under different brands locally and overseas i.e. Chowking, Greenwich, Red Ribbon, Mang Inasal and Burger King for domestic brands and Yonghe King, Zhuang Yuan, San Pin Wang and Chow Fun for overseas brands. In 2011, Jollibee Foods Corporation reported 62 billion pesos in total annual revenues.
Jollibee’s story began in 1975 selling flagship products like Chickenjoy, spaghetti special, yumburger and Champ hamburger. In 1980, less than five years from its first operation, Jollibee began its brand building effort with the launch of its first thematic television commercial despite less than ten stores. It was in 1983 that Jollibee began to cement its relationship in the minds of consumers with the insightful campaign of Jollibee langhap sarap that provoked consumers to believe that the delicious smell of Jollibee’s menu is proof of its delicious taste.
Apple was a challenger brand to IBM in the 70s when computers were beginning to be perceived as commodity products designed for a specific functional task. In the late 1970s, Apple started brand building with text heavy traditional retail ads common to technology products. It was not until Apple’s first television ad intended to launch the Macintosh and first spotted during the 1984 Super Bowl that Apple broke the glass ceiling. This was when Apple Macintosh echoed the message of individuality, pretty much summarizing the late Apple’s CEO Steve Job personal philosophy. Thus, the tagline “Think Different” was born. The “1984” ad was followed by a series of “Crazy Ones” adverts that featured seventeen 20th century icons i.e. Albert Einstein, Martin Luther King, John Lenon, Boby Dylan, Ted Turner, Maria Callas, Mahatma Gandhi, Pablo Picasso, among others—all of them icons of change and individuality. From then on, the rise of Apple was unprecedented as the entire brand breathed differentiation and spearheaded a lot of category busters with Macintosh, Iphone, Ipod, Ipad, etc.
Sustained brand building. Brand owners understand that building and managing brands is not a one-time fling but a relationship with the consumer that must be sustained over time. Barring no problems in product design and efficacy, pricing, availability and distribution, the top advertising spenders in any category are likely to be the market leaders or strong challengers as well. Despite their brands gaining top of mind in the category, they continue to feed and strengthen consumer awareness of their brand, preventing weaker challengers from owning a space in the consumers mind. Think noodles, its Lucky Me; think coffee, its Nescafe; think ice cream; there is Selecta; think mobile service provider, one thinks of Smart, among others. It happens that all these brands are heavy category advertising spenders, too, committed to sustain dominant brand recall over the long haul.
Authentic messaging that resonates well with consumers. Brands have carefully crafted communications messages that emotionally inspire consumers to prefer their brand while creating a perception of superiority against other category players. For example, Nike is not just about superior or proprietary sports shoe technology but also about the promise of self-liberation and empowerment. Phil Knight and track and field coach Bill Bowerman founded Nike, named after the Greek goddess of victory.
In Phil Knight’s words, “so long as you have a body, just do it”. Nike is not only for athletes but generally for those inspired by sports, never mind if they cannot actively play a game. High-profile athletes worldwide have endorsed the brand among them, Michael Jordan, Tiger Woods, Lebron James, Lance Armstrong, Andre Agassi, Bo Jackson and the Philippines’ very own Manny Pacquiao.
Brands share stories and messages which consumers store in their minds. The more brand messages are delivered, the more there is to store and the more space the brand occupies in the consumers mind. Commodities are content with logo or name exposure, never mind if consumers have nothing else to recall beyond the name or logo. This way, there is nothing much the consumer knows about the commodity, making it a replaceable name in the consumers mind. Thus, commodities are short-lived while brands have a longer life span.
Clarity of brand’s positioning and personality. A successful brand is managed by brand owners with a resolute idea of what their brand stands for. In the face of success, the brand becomes fair game for self-professed pundits but precisely because the founding brand owner understands the brand’s personality, he is able to filter what is appropriate or not for the brand. Toyota is a very strong brand name among the middle-income market. Such is the strength of the name that many times the Board of Toyota is tempted to leverage the name into the upper income market. But Akio Toyoda, CEO of Toyota understands very well what the name Toyota stands for in the minds of consumers. Henceforth, a separate company and brand was brought forward to serve more elite consumers. Thus, Lexus was born.
Selfless-passion and personality extension. Most brands, specially family-owned brands that are successful are an extension of the founding owner’s interest, passion and personality. American fashion brand Betsey Johnson is known for frilly, lacey, ultra-feminine, whimsical designs much like the personality of the brand owner who at 70 years old continue to sport her own fashion line.
Homey, comfort food KFC was founded by Colonel Harland David Sanders who when alive, sported the trademark mustache and goatee, white suit and string tie, now institutionalized in KFC’s logo and institutional materials. Colonel Sanders image evokes warm, comfort, enjoyable quiet time analogous to KFC’s crispy, delicious fried chicken.
Brand owners hit the ground running. Successful brands are tireless. One day, these brands serve one consumer segment. Soon, they dominate the domestic market. Then, comes the region and before you know it they are present in many countries globally. A decade ago, H&M, LG, Hermes, Samsung, Zara, Starbucks did not belong to the 100 World’s most valuable brands.
Successful brands are fortunate to have tireless founders and irreverent thinkers whose legacy guide and define the brand’s spirit. Not every commodity can rise to become a brand specially when the business owner is driven by purely here and now sales results.
The writer is an Adjunct Faculty of the Asian Institute of Management teaching Strategic Brand Management and is Chief Brand Strategist of MKS Marketing Consulting. Email at firstname.lastname@example.org.