Tag: commodity branding

Product Packaging- Powerful or Dummy?

by admin

Product packaging plays a very significant role for FMCG products. Can the same be said about commodities? Commodities are generally bulky and purchased in larger quantities. Their handling is quite unsophisticated. Their users are often different from their buyers.

Packaged and Unpackaged Products

There are a few commodities, which allow packaging, while others are of such nature that no packaging is possible and branding has to be done on the product itself.
Commodities which have packaging: Cement, glass, paint, electric wires, barbed wires, tiles
Commodities which do not have packaging: TMT bars, gypsum/ fiber cement boards, cement sheets, metal sheets, plywood, metal framework

It has been seen that for commodities, where packaging is not possible due to the size of the product, companies employ stickers or wrap arounds to convey their marketing message.

Product Packaging Benefits

Apart from the functional objective of protecting the product from weathering or causing harm to environment/ people around, product packaging informs the customer of major USPs of the product. Product packaging helps in establishing the premiumness of the brand. If the packaging is attractive, the recall value of the product is also higher. A good quality of packaging assures the consumer that the content inside will also be of good quality.

Usage and storage guidelines are sometimes mentioned on the packaging so that the customer does not need someone to guide him how to use it. There are customer care contact details or email IDs mentioned for contacting in case of any query or problem. It often lists the links (company website/ product micro site) to enable the consumer to gather more information about the product or its installation technique. Then there are few details like Maximum retail price, physical properties like weight, date and place of manufacturing etc. which have been mandated by the government for a few categories of items.

Packaging also gives space to advertise any offers being run on the product to attract the customer’s attention. Finally, if there are any standards like BIS, ISO, etc. which the company is complying to and wants to inform the customers about it, can be communicated through packaging. For a few commodities, it is mandatory by the government to comply to certain standards in manufacturing or testing and companies have to mention the standard on the packaging. For example, in India, cement manufacturers have to mention the IS code on the packaging itself, depending on the type of cement (OPC, PPC or PSC).

In a nutshell, packaging is the last medium for advertisement just before purchase decision if the customer has not been exposed to any advertisement of the product earlier.

Product Packaging- What to avoid?

Packaging is a sensitive media when it comes to communicating about the product. The text on the packaging can be taken to the court if the product does not deliver on the promises mentioned on the product packaging. Only those claims about the product performance should be mentioned for which the company has reports from test, internally conducted or at an external lab. However, words like “Best”, “Cheapest”, “Most effective”, “Highest selling”, “Fastest” etc. are acceptable adjectives for the product as this are subjective terms and depend on several factors, a few of which might not be even possible to measure.

A lot of iterations are done before the final product packaging is decided. It should look appealing, be sturdy enough to bear transportation, weathering and handling and not add a lot of cost to the product. Environment friendly packaging material has recently become a trend as packaging material does not go into construction and have to be disposed off.

Brand Architecture- 3 Types

by admin

Most of the commodity companies have two or more brands. The question of which brand architecture to follow primarily arises at the time of introducing a new brand. The dilemma is similar to other industries:

Should you operate with Brand Extension strategy or Endorsed Brand strategy?

Should the identity of the new brand be completely away from the existing brand?

What is perception of the present brand in the consumers’ mind?

When to use which Brand Architecture?

Companies adopt various brand architecture for managing their brands, depending on their strategy.

Brand Extension or Branded House:

This brand architecture strategy is used when the brand equity of the existing brand is high and can be transferred to the new brand. It is generally used when a premium brand wants to introduce an even more premium brand.

Ultratech Cement launched an even more premium product Ultratech SUPER. The mass media advertisements were mostly for mother Ultratech brand, though at the retail counters, Ultratech SUPER was also promoted.

Endorsed Brand or Sub-brands:

For some companies, the trust level is high on the existing brand but it is seen more as a value brand than premium brand. The new brand to be launched is desired to be positioned in the premium segment. Then endorsed brand strategy is used. It is also used when the company is a conglomerate diversified in multiple products and wants to extend the brand equity to the new businesses.

When Lafarge entered India, it wanted to encash on the existing brand strength of Lafarge. So the brands it launched were Lafarge Duraguard and Lafarge Concreto. The focus on Lafarge was less, visible from the packaging of the product. All in-house developed Tata products have a mention of Tata in their brand name.

Standalone Brand or House of Brands:

This strategy is used when the image of the existing brand is quite negative and will have an adverse impact on the new brand if the consumers come to know that it from the same manufacturer. Alternatively, it is used when the brand perception of the existing brand is so strong that consumers will not be able to associate the new brand with a premium segment. A value brand from can potentially erode the premiumness associated with the existing brand.

Bangur Cement and Rockstrong Cement are from the same parent company Shree Cement but have no mention of Shree Cement on any of their marketing communications.

Brand architecture
Brand Architecture- 3 Types

Mixed strategies:

Then there are variants which are midway between the strategies. The focus on the parent brand ranges from high to low and are used by commodity companies, depending on the market feedback and requirement.

Brand Architecture defines the communication on the product packaging, advertisement in media and in-shop promotion, along with other things.

Internal Marketing- 2 ways

by admin

Why do commodities company care for Internal Marketing? The sales employee of a company is the first brand ambassador of the product, even for commodities. He addresses both the aspects: speaks positively about the quality of the product and company in front of the customers and acts as eyes and ears for the company, feeding important information about recent trends in the market. That is why, internal marketing for commodity companies is a critical input to transition from commodity to brand.

Internal Marketing for Employee Motivation

Internal marketing programs fall in two categories: individual motivation & team motivation.

Internal Marketing
Internal Marketing- 2 ways

Individual motivation

Individual motivation programs can have one or many goals. They are towards promoting product sales of an existing or new brand, increasing the network or increasing market share. They can also be aimed to increase repeat purchase volumes, new customer acquisition and other criteria or any other short-term goal of the commodity company.

Trainings on technical specifications and uniqueness of the product are the basic know-how needed. Marketing Department often gives them tools which makes them better sales personnel and enable them to sound more convincing in front of the customer. Sessions on company plans, salesmanship, customer psychology, marketing activities of competitors and communication and negotiation skills are the major trainings provided towards achieving the individual goals. Company also provides them technical support assurance to customers and quick access to customer profile information. 

Empowerment is equally important for individual motivation. To empower them in front of the customers, company gives them authority to approve modest price discount authority. At the end, rewards for better than average performance are needed. Rewards in this program include cash awards/ recognition, promotions, company stock, paid time off, salary hike, special bonus, etc. Rewards are majorly dependent on the individual’s performance and is generally in the form of monthly or quarterly sales bonuses. The sales manager has a key role in this and he has to steer each person to achieving his target.

Team motivation

Companies indulge in Group motivation programs to boost the morale of the team, inculcate team playing behaviours and achieve short term goal through the team. For instance, the aim of a company is to increase the sales in a market. A sales target is assigned to the sales team and periodic updates are sent to the sales team about the achievement vis-a-vis target. In case of shortfall from a salesperson, other salespersons either try to absorb the deficit quantity in their influence areas or motivate the laggard salesperson. Such programs lead to sharing of marketing ideas and instill a team spirit. The marketing, logistics and technical teams are also generally part of such programs.

Enablers towards achieving the team goals are the slightly different from individual motivation programs. They include trainings on team spirit, working across cultures, company profile and industry overview among others. Rewards in this program include team recognition, company stock, team outing, special training programs, etc. Regular communications from the management also help in internal marketing of the products, especially if the communication is about new markets entered, industry updates or product enhancements.

A larger motivation program includes activities addressing the entire organization. This involves building a good corporate culture, imbibing the company’s values into the minds of employees, following good HR practices, regular communications from the top management about developments in the company and industry, transparency in dealing with employees for promotions, entry and exit and following industry-standards compensation and benefits policy.

Companies focusing on sales keep reacting to competitive activities or innovating new campaigns but often forget to motivate their salesforce. They must not forget that internal marketing is one of the legs in the tripod on which product marketing rests, the other two being creating customer pull and increasing the channel network presence.