The Hindu Business Line : How they became brands

THE penetration level of several branded commodities has been very low considering their market size. Rice, atta, sugar, antiseptic lotion and floor-cleaning liquids are some such categories. In some categories such as antiseptic lotions and floor-cleaning liquids, the very frequency of purchase may be low. Behavioural aspects could provide some insights to marketers to overcome the challenges posed by categories where branded offerings are being introduced.

Parry sugar, Nestle curds and Dettol floor-cleaning liquid are recent introductions to this category. The concept of branding commodities is driven by the basic understanding of a commodity (versus a brand)target segment considerations and the concept of involvement levels of the target segment. Commodities are offerings that compete on price and branding them should provide value to consumers. Besides, brands should also use a conceptual approach towards conveying the value of such offerings. What is interesting is that unlike in the developed markets, where branded offerings compete with retail brands, the branded commodities in India compete with home-made substitutes. Branded offerings compete with offerings in the unorganised sector. The target segment selection is critical as it forms the foundation on which communication is built.

There is one aspect that needs to be understood while understanding commodities. Brands create a perception of superior performance of product attributes when compared to commodities. Hence, commodities can be found in any category in which competitive branding has not developed. The examples of rice and sugar are ideal as their branding is developing, driven by price. The branded atta market is just 2-3 per cent of the entire market.

Target segment-related considerations

When brands are developed in a commodity market there is either an advertising plan or a discount-based trial where the brand is offered to consumers at a lower rate. Another way is to introduce the offering in large retail outlets at special counters.

Very rarely is there a concerted effort to formulate a marketing mix, taking into account the fullest potential of the target segment. A long-term approach would be to sustain the initial purchase and record data on the target segment.

Any brand which is a pioneer in branding a commodity in its respective category will only be interested in approaching a target segment that offers long-term potential for the branded offering. A brand of vegetables delivered fresh to consumers or a brand of rice can concentrate on how chemicals are not used in the processing of such products. This approach is likely to be useful as environmental degradation and usage of chemicals is a growing concern.

But even with this approach, target segment issues are important. Psychographics is a useful tool to identify the target segment and this will help in formulating the marketing mix, as it provides useful leads to reach the target segment in a consistent manner.

Dettol is an interesting example. It launched the floor-cleaning liquid and its advertising emphasised the need to use it to prevent the frequency of illness within the family. While the advertising makes an effective point, there should also be an attempt by such a brand to identify a target segment which is health-/fitness-conscious. Psychographics can help in identifying the activities (going to health clubs or buying appliances which preserve nutrition, such as a special refrigerator or a water purifier to ensure healthy water from bacteria) or collect opinions about hygiene in the various facets of life.

It is interesting to note that this kind of segment is quite different from consumers who may buy such a brand because it is heavily advertised or because the brand is launched with a discount. Once such data is procured, reaching the target and conveying the value of the offering will take on different approaches (often very different from conventional mass media advertising). For example, households which are likely to have a personal computer can be reached through a Web site. Several creative contests can be hosted to get traffic to these Web sites.

One should note that this segment will buy the brand purely because ofintrinsic benefits and are likely to be price-insensitive (not the typical bargain hunter who goes after discounts and deals, where the trial of the brand is incidental).

Appropriate emotional appeal is also likely to add to the brand appeal. The Dettol advertisement mentions that it is the role of the housewife to monitor health aspects. This adds to the self-worth of housewives. The emotional appeal is brought in by showing the healthy school-going boy (who is unlikely to frequently fall ill due to the usage of Dettol). Saffola Gold too shows the housewife as the "protector" of her husband (an offshoot of a segment which believes in a healthy lifestyle with an overtone of emotion). In the US, a company marketing caskets established itself as a brand by appealing to the emotion of consumers, asking them to give their loved ones a decent "final farewell" by using the brand. It drives home the point that emotion is useful in elevating the status of a commodity to a brand.

The target segment also plays a role to determine the extent to which emotional appeal should be used. A brand of motor oil addressing truck drivers suggested that, as a part of the sales promotion, a buyer could avail himself of an insurance policy on buying the brand. The message backfired as insurance in the minds of the target segment was directly associated with death, a bad omen.

Imox, a brand of stainless steel products for household use (from the Jindal group) was retailed through Lifestyle and Shoppers' Stop outlets, reflecting its upmarket nature. The brand was trying to establish itself in the commodity category of motor oil a few years ago!

Target segment psychographics, brand's message on attributes and an appropriate emotional overtone form the basic foundation for branding a commodity.

Involvement levels and commodity branding

Commodity buying is based on just price so involvement levels will have to be heightened among the target segment to ensure that it notices and buys the brand. Involvement levels mean creating and nurturing a degree of relevance of the brand to the consumer.

In FMCG commodities, low involvement levels are to be harnessed to create and sustain the interest of consumers. There are three stages in which such involvement occurs.

The first stage is the "thought process" where the brand is associated with the beliefs of consumers in a favourable manner. Coconut oil has been used for centuries by consumers, but only in recent times have brands come up. Parachute brand emphasised the aspect of purity and substantiated it with its effective packaging and logo. After establishing itself in this category, it created the jasmine variant, and added to the beliefs of the consumer that a good brand is also available in a culturally familiar variant. Thus customer involvement was heightened.

This is a good example to show how a conceptual process enables advertising to communicate the benefits of the product and creates a brand in a commodity category. When the brand wanted to focus on the urban youth segment, its advertisement mentioned that the product could be applied before a bath - keeping in tune with the "no-oil-in-hair" mindset of the youth.The next stage in the involvement process is the `trial and experience' stage where the consumer tries out the offering after "accepting" the brand mentally. The product attributes of the brand come into play at this stage and it is important that the brand live up to its promise. The efforts of the previous stage will be wasted if the consumer does not experience the benefits that differentiate the brand from the commodity, while paying a higher price for it.

Reynolds is a good example of how the brand won the confidence of consumers in a category that was a commodity once. Ball pens were largely sold in the unorganised sector and were of poor quality. Reynolds charged a premium but offered a pen that had a sleek design and offered a smooth writing experience.

Kohinoor basmati rice offered product attributes of a superior consumption experience. The experience offered by a brand in a commodity market should be discernible. A strong differentiator has to be built up at the `trial and experience' stage.

The last stage is the `sustained feeling' stage in which the consumer feels that the brand is able to sustain its branding efforts. If the brand is successful in the first two stages, the consumer will have a positive impression about the brand.

Sustaining the good feelings associated with it over a period of time is a challenge for the brand. A relationship with the consumer is built only in this final stage and the brand has to carefully devise a relationship programme with its consumers. The database of consumers will be useful to devise such programmes.

Another strategy is to develop several product lines/variants that reinforce the competence of the brand. Himalaya, the company marketing traditional Ayurvedic products over the counter, has developed many product lines based on scientific research over a period of time. It is a strong brand in terms of consumers' perception of its product attributes.

The rigor associated with the development of products in a market like India adds to the credibility of the brand.

Branding commodities requires a conceptual foundation with consumer insights. Such an approach will ensure that the brand gets the best mileage for being the forerunner in itscategory.

(The author is Professor of Marketing, IIM, Bangalore.)

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