Battle of the brands

May 01, 2006 9:30 PM  By

In 1971, 45 New York advertising agencies told Frank Perdue that he couldn’t brand a chicken. Chickens are commodities, they told him. Consumers don’t care whose chicken they buy. They buy chicken on price. Perdue disagreed. Profit margins in the poultry business were notoriously thin, and he believed that if he could convince consumers that his chickens were better, they would pay a higher price. Perdue, who went on to become a star by appearing in his own ads, was right: Not only did he sell a lot of chickens, but he proved that you can brand a dead chicken.

The story is often repeated in marketing seminars and branding meetings to refute commodity arguments. Business-to-business marketers selling commodities, from industrial pullers to electronic components, need to remember Perdue’s proposition and the moral of the story: A successful brand can arise from a combination of quality merchandise, attentive customer service, and an innovative offer or approach.

Maybe price competition is tough. Maybe a piece of merchandise lacks individuality. Maybe it serves a customer base that has neither an expectation nor a desire for uniqueness. But whatever the product line, good marketers find opportunities to build a brand and develop customer loyalty to it.

B-to-b consultant Dave Dolak of Charlottesville, VA, believes strongly that marketing propositions should be based on brand development and management through product differentiation — not on price cutting.

“I advise clients to avoid situations where they can be directly compared on price,” Dolak says. “Avoid direct collisions and go for the glancing blow. If you’re selling widgets, you don’t want customers or prospects to be able to say, ‘Your widget is 75 cents per unit, and the other guy’s is 50 cents, so I’ll buy from him.’ You want to be able to say that not all widgets are the same, mine is better, and here’s why.”

Dolak acknowledges, however, that b-to-b marketers face daunting challenges in brand creation and management. Corporate budget pressures force business buyers to regularly find ways to do more with less. Moreover, the Internet has created a marketplace in which price-shopping has become increasingly easy. Dolak emphasizes the need for marketers to develop “plus-one features,” incremental improvements in product specifications, merchandise bundles, service packages, and so on. “The key is to find differentiators and develop the product and build it into a brand,” Dolak says. “That’s the way to compete in a commodity market.”

That may be why most b-to-b merchants, unlike their b-to-c counterparts, don’t differentiate their brand message from one group of customers to another. “In b-to-b, most companies have an overall brand, and they try to maintain the same elements against all customer segments,” says catalog marketing veteran Coy Clement, principal of consultancy ClementDirect in East Greenwich, RI. Some companies, he explains, tailor catalog merchandise listings based on standard industrial classification (SIC) code or business type, but the brand message itself is not differentiated. “They typically maintain a consistent brand message,” he says.

VIVE LES DIFFERENTIATORS

Clement emphasizes three key areas in which b-to-b offers can be differentiated to avoid commodity-style competition:

  • Customer service and merchandise availability and assortment. “It’s particularly important to have a full shopping assortment,” he explains. “People in business are looking to do things in as few steps as possible. They’re not going to go from company to company looking for individual items.”

  • Technical support and product integration. If a marketer is selling computer peripherals, merchandise such as network cards and routers should use the same protocols for optimum performance. “The same applies to types of paint and solvents,” Clement says. “Will the cleaning supplies the company sells clean up the solvent it sells?”

  • Geography and delivery — what’s in stock and how fast can a customer get it: “I advise marketers to have multiple distribution points using a hub arrangement to assure on-time delivery.”

“All of those elements can be part of a brand, and a company’s products can be part of the assortment,” Clement adds.

BRANDING THE HARD-TO-BRAND

Clement points to New Pig Corp. of Tipton, PA, as an example of a merchant that has managed to create a well-identified brand for a line of merchandise that many marketers might have thought would be difficult to impossible to brand: industrial clean-up products, hazardous spill absorbents, and containment goods. Clement summarizes New Pig’s appeal: “New Pig infuses product assortment with a personality that’s different.”

New Pig spokesperson Kristie Carruthers says the merchant “strives to make sure that our private-label products are not perceived as commodities. We emphasize that they are superior in important ways, while the competing products are the commodities.”

To do this, New Pig takes a four-prong approach: 1) It ensures that all of its merchandise, whether manufactured or sourced; is of consistently high quality, and it promotes the ISO 9001 certification of its quality control systems; 2) it fights price competition by emphasizing the cost-effectiveness of higher-quality products; 3) it offers a 100% money-back guarantee and covers return shipping costs; and 4) it employs an identifiable mascot — a cartoon pig named Sparky — throughout its product offerings to call attention to special features while symbolizing muscular quality.

“Our marketing overall builds our brand as a symbol of unsurpassed quality, service, and satisfaction,” Carruthers says. “Our fun, pig-themed image — comprised of things like our One Pork Avenue address and our promotional pig hats — is only the beginning; ultimately we keep customers smiling because we’re among their most reliable suppliers.”

RIGHT STUFF, RIGHT TIME

Mansfield, TX-based Mouser Electronics, which markets electronic components and semiconductors, takes a more inventory-intensive approach to branding, says international sales manager/Internet sales manager Tim Whitworth.

“Our supplier relationships are key to Mouser,” Whitworth says. “The biggest thing we can do to enhance our brand is to consistently offer new technology. Inventory is more important to our business than pricing.”

Mouser and its parent company, TTI, serve the hardware needs of computer engineers. Mouser provides components for use in the development of prototypes; TTI sells components needed for production. Although the product line can be vulnerable to fierce price competition and tight margins, Mouser has built its offers and its brand identity on inventory, customer service, and merchandising. It publishes a new 1,700-page catalog every 90 days, emphasizes customer service, and unlike many other merchants in the niche, requires no minimum order.

“We cater specifically to engineers and small production buyers,” Whitworth explains. “Our customers do not have to buy in big volume. The can buy less and get exactly what they need.”

The company also makes it clear that Mouser and TTI are part of the same family. “Our advertisements promote the connection between Mouser and TTI, showing the bridge between the two,” Whitworth says. “Customers come back to us because of the ease of doing business.”

KEEPING THEM LOYAL

Ensuring repeat business and customer loyalty is a major factor in the successful branding of commodity or near-commodity merchandise, says catalog consultant Katie Muldoon, of Muldoon & Baer in Palm Beach Gardens, FL. Muldoon highlights the brand value that can come from customer loyalty programs in business-to-business, especially for merchants that deal with small-business owners and buyers.

Muldoon cites office supplies cataloger/retailer Staples, which keeps customers coming back with its Staples Rewards. Customers earn rewards checks based on a percentage of their purchases and copy and printing orders. “Staples has done a good job at branding commodity products through its loyalty program,” Muldoon says. “Rewarding customers is a very effective brand-building tool.”

A big part of Framingham, MA-based Staples’ business is copy paper, Muldoon points out. Customers may be able to find similar copy paper from any number of merchants, but a rewards program will make customers more inclined to attach a brand name to their paper needs when they’re ready to make a purchase.

From spill absorbents to paper, branding opportunities abound in the business-to-business sector, just waiting for savvy marketers to develop them. Branding commodity products make take more effort and creativity than simply undercutting the competition’s prices, but seasoned merchants know that successful branding will ultimately do more to ensure the long-term health of the business than a merchandise markdown. The branding of commodity merchandise really comes down to marketing basics: good customer service, excellent inventory, and a well-thought-out offer.


Writer Mark Poirier is based in Newtown, CT.