A Study on Brands and Commodities.

1. COMMODITIES AND BRANDS
16.12.2011, Bengaluru

2. Basic Characteristics of a Commodity
 A class of offerings which come without qualitative differentiation across a market.
 A commodity has full or partial fungibility;
 It is no matter who produces it
 Price fluctuates on global supply and demand, determined as a function of its market as a
whole.
 Well-established physical commodities have actively traded spot and derivative markets
 They come packaging distinction
 There is almost no emotional benefits, apart from cultural meanings some commodities
have in some countries. E.g. gold in India
 Has no sellers’ equity

3. Commodities to Brands

4. Commodities to Brands
Many of the iconic brands in
business come from commodities !

5. BASIC CHARACTERISTIC OF A BRAND

6. Despite all the heavy definitions, a branding can be thought of as an idea,
and branding, that rigour to establish that idea.
An Idea

7. A Tangible ‘consumable’ The Idea
Many of the iconic brands in
business come from commodities !

8. Generic Products and Brands
Advertising

9. The Workings of Advertising
Encourages consumers to experiment with a product
Precipitation category
Encourages consumers to choose among alternative "brands”/
Persuasion intensifies the consumers' desires for a specific brand
Reinforcement Continually directs the consumers' attention to a particular
"brand" or product to achieve repeated purchases
Reminder Encourages consumers to become repeat purchasers of the
product category/ brand
J. N. Sheth, Models of Buyer Behavior: Conceptual, Quantitative, and
Empirical, Harper and
Row, New York, 1974.

10. Generic or
• The precipitation and
commodity
reminder mechanisms are Generic advertising should
advertising is
more likely to increase expand aggregate sales and
intended to
total product category or be brand neutral.
precipitate and
industry sales
remind
• While persuasion and
Brand advertising is reinforcement are usually
primarily intended to associated with
persuade and maintaining or increasing
reinforce market shares of a specific
brand.
Commodity Advertising:
Theoretical Issues Relating to Generic and
Brand Promotions*
Ronald W. Ward, Julio Chang, and Stan Thompson

11. “The brand neutrality [in commodities] may not always hold if the generic message emphasizes
homogeneity within the product group,
while the brand message stresses differences"
Ward and Chang (pp. 91-92).

12. What Good is a Brand, Anyway?
This question can be answered quite easily with a little bit of data.
A brand can empower!
Price Differentials: Branded Products Versus Store Brands [suburban Philadelphia,
Pennsylvania]

13. Creating a Brand out of a Commodity

14. Being the first is the most obvious way to get there. But not the only one.

15. Two Views On Advertising
In This Context

16. • Form of persuasion that creates product This gain in power is at the expense of
Form of differentiation and thus leads to greater the consumer primarily because of price
persuasion market power among those with significant
advertising efforts increases.
• Alternatively, advertising is viewed as The latter function should enhance
information that provides an inexpensive competition and reduce barriers to
Information
means for current and potential buyers to
assimilate data about different products entry.
Commodity Advertising:
Theoretical Issues Relating to Generic and
Brand Promotions*
Ronald W. Ward, Julio Chang, and Stan Thompson

17. • Form of persuasion that creates product This gain in power is at the expense of
Form of differentiation and thus leads to greater the consumer primarily because of price
persuasion market power among those with significant
advertising efforts increases.
• Alternatively, advertising is viewed as The latter function should enhance
information that provides an inexpensive competition and reduce barriers to
Information
means for current and potential buyers to
assimilate data about different products entry.
Therefore, Commodity communication must
educate
Commodity Advertising:
Theoretical Issues Relating to Generic and
Brand Promotions*
Ronald W. Ward, Julio Chang, and Stan Thompson

18. And Brand advertising must persuade
• Form of persuasion that creates product This gain in power is at the expense of
Form of differentiation and thus leads to greater the consumer primarily because of price
persuasion market power among those with significant
advertising efforts increases.
• Alternatively, advertising is viewed as The latter function should enhance
information that provides an inexpensive competition and reduce barriers to
Information
means for current and potential buyers to
assimilate data about different products entry.
Commodity communication must educate
Commodity Advertising:
Theoretical Issues Relating to Generic and
Brand Promotions*
Ronald W. Ward, Julio Chang, and Stan Thompson

19. Experience makes a brand

20. Search Goods Experience Goods
For infrequent purchases of For frequent purchases of lower value,
significant value, consumers look consumers look for experience.
for assurance.
the consumer may experiment with a number
This assurance comes from of alternatives
acquiring detailed data about the
product.
then decide on a limited set for continued use
Products are inspected prior to
purchase.
Detailed information is searched.
Detailed information is searched.
quality cannot be completely evaluated
without actually consuming it
These products are search goods.
Invariably, low-involvement products
Invariably, high-involvement
products These products are experience goods.
P. Nelson, "Advertising as Information," Journal of Political Economy, 81, 729-745 (1974b).

21.  Except for very high-priced commodities [Gold, Petroleum], most commodities are low-
involvement, high frequency and of low value at each purchase.
 Consumers do not search for these goods.
 A significant brand can turn commodity into “Experience Products”

22. Therefore, a brand within commodity space, can be created primarily by delivering emotional/
experiential value Factual content about the product, must justify *act as a “reason to believe”+
the higher order emotional benefit.
 Celebrity endorsements of experience goods is an example of stimulating high recall with
little factual information.
M. E. Porter, Interbrand Choice, Strategy, and Bilateral Market Power, Harvard University
Press, Cambridge, MA, 1976.

23.  The advertising has to create perceived attributes [not necessarily real], To differentiate and
create a brand in the commodity space.
 Gains from perceived differences may continue even with repeated purchases if the
perceived attributes are difficult to measure.
 For example, emphasis on the nutritional value of certain foods may be acceptable
although it is difficult for the consumer to directly validate such claims.

24.  Ultimately, the success of advertising to attain product differentiation Depends on both the
actual product attributes and how easily these attributes can be measured.
For many foods and fibres, the attributes can be judged such as taste, quality, packaging, etc.
 Yet, there exists a comparable list of attributes that cannot be judged by the consumer.
One example could be the promotion of a honey brand on its purity/ and its claims of
naturalness

25. CASES
Lemonade!!!!!!!

26. Nimbu Paani
 Category: Lime juice Lemonade Simply Nimbu pani
 Lemonade in Indian style, is simple refreshment, adding natural cooling properties of their ingredients
designed to keep your body cool.
 Lemon trees are believed to be native to the Indian sub-continent.
 Nimbu paani was a kind of summer drink that every Indian household was accustomed to. It is one of
the most ancient recipes to beat the scorching heat.
 Popularly called as the Nimbu Ka Sharbat in hindi.

27. How do we describe ‘Nimbu Paani ’
refreshing
natural
economical
cool
traditional
Indian

28. THE COMMODITY WAS BRANDED
The Untapped opportunity in Indian Market!

29. Road Side
nimbu Pani..
Cheap.. but
hygiene?
Indian Ideally
summers! Unsafe tap Or packaged drinking home
water? water..but no taste.. made…but
where?
Restaurant ..
Umm expensive,
I want.. and I ve no time..
umm
Carbonated Colas drinks!…umm
To the rescue.. Packaged
nimbu paani..
Or a dash of refreshing Vitamin -C
Thirsty Indians
travelling on road!

30. With an eye on summer sales
Parle Agro and PepsiCo have
come out with packaged lemonade - LMN and
Nimbooz respectively, to provide relief our
parched throats……2009

31. The opportunity
 “Nimbu Paani” or lemonade has always been the most commonly consumed cold
beverage for Indians, especially during hot summers
 It made business sense to launch a non-fizzy drink during summers as it scores
above the colas in the health/ hygiene space
 The added advantage of it being a very familiar natural refreshing drink which is
now being offered in a hygienic and convenient way would make the mothers
prefer it over the Colas
 The size of the largely unorganized `Nimbu Paani’ market was estimated to be
around 1 billion cases, which is double the size of the carbonated soft drink
industry in India.
 Parle and PepsiCo is vying with each other to tap into this market and with the
mercury levels soaring it looks like packaged lemonade is here to stay.
 Lime is the second flavour brands are squeezing in fruit drinks. It is a flavour well
accepted but most of the consumption is from the unorganised sector.

32. These brands delivers very strongly on certain expectations.
These are:
• Locally Relevant Taste
 Packaged lemon juice, under the brand names, Nimbooz, LMN, Minute Maid Nimbu Fresh, are great tasting
products.
 They have capitalized on the existing familiarity of unpackaged / home-made nimbu pani.
 It has remained true to its authentic Indian Identity by using the traditional Matka (Earthen Pot) and
Squeezer in the manufacturing process.
• Convenience and Great Value
 The products are available in three convenient formats, 350ml PET, 200ml RGB and 200ml Tetra at the
remarkable price points of Rs15, Rs 10 and Rs 10 mostly.
• Accessibility
 Nationally available packaged Nimbu Pani.
• Hygienic
 It is just like home-made nimbu pani. You can enjoy its natural and delicious lemony refreshment anywhere
you go.

33. Nimbooz
Brand insight : Our culture is rich and deep rooted.
No matter how much we migrate to a modern lifestyle, it’s only when we enjoy truly familiar &
authentic experiences( albeit in a contemporary way) that we can relish being our true selves
Product: Nimbooz by 7UP is an authentic drink that’s made with real lemon juice squeezed from
the best of lemons. It has No Fizz & no added Artificial Flavours.
It is tasty, 100% hygienic and is available in trendy and convenient packs, so that you can
enjoy natural delicious, lemony refreshment anytime, anywhere .
Positioning:
Refreshing Nimbu pani with Real lemon Juice
Brand Idea: “Enjoy Being My Asli Self”
Packaging: The product is available in three convenient formats, 350ml PET, 200ml RGB and
200ml Tetra at the remarkable price points of Rs15, Rs 10 and Rs 10 mostly.

34. Brand Role: "The ASLI Indian Refresher"
Nimbooz creative brief
Get busy Indian men and women who have adopted a modern lifestyle but still love
their (Indian) tradition to try Nimbooz, the real nimbu paani with real lemon juice By telling
them Nimbooz is the cool way to enjoy a traditional favourite.
Source: www.afaqs.com
Nimbooz Launch Objective
The objective of the film was to communicate the launch of the brand “Nimbooz” with the
proposition “Ekdum Asli Indian” (Absolutely Real Indian).

35. Nimbooz

36. Nimbooz

37. Nimbooz

38. LMN: The Emergency Lemon Refresher
 Product: LMN has a head-start with a good brand name and a cool packaging.
 Packaging, Price & Placement:
 As for Nimbooz and LMN, both offer 200ml tetra packs for Rs.10.
 LMN will gain on its 110ml tetra pack, which Parle Agro intends to sell for Rs.5.
 The main competitor was the product at the stalls and the home made nimbu pani.
 At stalls, a glass of nimbu pani is sold for Rs.6. LMN made it possible to have packaged and hygienic
nimbu pani at Rs.5.

39.  Parle Agro’s LMN has tactically tried to position the drink as a ‘lemon-flavoured’ drink to
avoid comparison with homemade ‘nimbo paani’.

40. LMN

41. LMN

42. Minute Maid Nimbu Fresh……
...A late entrant; a worthy
challenger!
Launched in early 2010, Minute Maid Nimbu Fresh came to the market after the launch of Nimbooz and
LMN.

43.  Product: Minute Maid Nimbu Fresh is made from no preservatives and no added colour. It
tastes just like homemade 'Nimbu Paani'.
 Price: Coca-Cola, the latest to add a dash of lemon to the cola war, is playing the pricing
game to catch up with Pepsi’s Nimbooz and Parle’s LMN.

44. Placement& communication strategy: Bilkul ghar jaisa
 The drink is made from lemon juice concentrate and comes with the tagline, 'Bilkul ghar
jaisa' (just like home).

45. Minute Maid

46. Minute Maid

47. Summary
 Most consumers are either used to drinking nimbu paani at home or pick up non-branded
products.
 Earlier, beverage companies stayed away from the category because they would have no
USP.
 Though the earlier examples of trying to introduce packaged drinks like tender coconut etc
have not succeeded, Pepsi and Parle have already hit the jackpot with Nimbooz and LMN
with sales much above their own expectations.
 Technology had played a big role to play in this. For example, while nimbu paani made at
home doesn’t have much shelf life, Pepsi has used a technology called ‘hot fill’ that increases
the shelf life of Nimbooz to as much as four months.

48. Positions
Premium Fun
Health/
Pure
Nutrition
Minute Maid
LMN
Nimbooz
Nostalgia/ Home Traditional

49. Minute Maid
 Minute Maid has based its brand on all the cultural associations and meanings that ‘Nimboo
Pani’ carries
 It portrays the emotions of the Indian youth, who has grown up on the home-made lemon
drink
 The value addition has happened in evoking all those images which still appeal to a certain
emotional need-state of the TG

50. DRINKING WATER

51. Packaged
drinking water
Increasing urbanization, found its
relevance
In the modern context
Increasing water pollution,
Water borne diseases,
Increasing scarcity of pure
and safe water
But Need of portable water!
Packaged, safe,
portable, drinking
Drinking water.. The most water!
basic need to survive.

52. Opportunity for commodity branding.
 Water is the most important necessity for life.
 The drinking-water needs for individuals vary depending on the climate and physical activity
but for average consumers it is estimated to be about two to four litres per day.
OPPURTUNITY
 The growing number of cases of water borne diseases, increasing water pollution, increasing
urbanization, increasing scarcity of pure and safe water etc. have made the bottled water
business just like other consumer items in the Indian Market..
 Scarcity of potable and wholesome water at railway stations, tourists spots, and role of
tourism corp. etc. has also added to the growth.

53.  Indians currently spending about $330m a year on bottled water.
 The packaged water market constitutes 15 per cent of the overall packaged beverage
industry, which has annual sales of at least $2.6bn. ( Business Standard)
 Almost all the major international and national brands water bottles are available in Indian
market
 Before few years bottle water was considered the rich people's choice, but now it is
penetrated even in rural areas.
 Three key players mainly dominate the Indian Bottled Water Market Parle Bisleri, Coca Cola
India Inc Kinley and Pepsico India Holdings Pvt. Limited.

54.  Water, being the vital element of nature, has largely common connotations in most cultures
refreshing
natural Purifier
Cleanser Rebirth Life

55. With time, the unquestionable properties of water was being corrupted,
mainly because of pollution.

56.  This created an opportunity in for brands to the provide seal of assurance to a generic/
natural element like water
 What was required was reinforcing the existing and expected qualities of water in a
convenient portable product offering

57.  Any brand trying to sell bottled water needed attain relevance by meeting
the natural expected qualities of water
 In this category, polluted nature of today’s world, created opportunity for
brands to enter

58. Bisleri

59. Kinley

60. The market leader is Bisleri International, which boasts a 40 per cent share. It is followed by Coca-
Coca’s Kinley (around 25 per cent) and PepsiCo’s Aquafina (around 10 per cent).
The top players in bottled water industry in India are the major international giants like Coca cola,
Pepsi, Nestle and noticeable presence of national players like Parle Agro,Mount Everest, Manikchand,
Kingfisher, Mohan Meakins, SKN Breweries , Indian Railways so on.

61. Variety of packages
Bottled water is sold in a variety of packages:
 pouches and glasses,
 330 ml bottles, 500 ml bottles, o
 ne- litre bottles and even
 20- to 50-litre bulk water packs.
The formal bottled water business in India can be divided broadly into three
segments in terms of cost:
 premium natural mineral water,
 natural mineral water and
 packaged drinking water

62.  However, value could still be created
 A brand like Himalaya provides access to a unique natural offering i.e.
natural mineral water from aquifers
 Flavoured mineral water and
 Fortified mineral water

63. Mapping Value Addition
Kapferer’s Prism

64. Adidas
Picture of Sender
Physique Personality
Sports and fitness Traditional, conservative,
collective
E I
x n
t t
e e
r r
n n
a Relationship Culture a
l Quality and heritage European, Traditional l
i i
z z
a a
t t
i i
o o
n n
Reflection Self Image
True sportsmanship, A good Relates more to competing
team player, Strong work than to winning
ethic
Picture of Receiver
Strategic Brand Management: Jean-Noel Kapferer

65.  Physique according to him is the basis of the brand.
 E.G. the physique of Philips is “technology and reliability” while for the brand
Tata it is “trust”
 Personality is same as Aaker, it answers the question “what happens to
this brand when it becomes a person?”
 Culture symbolizes the organization, its country-of-origin and the values it
stands for.
 E.G. traditional brands like balsara, dabur and zandu.

66.  Relationship is the handshake between consumer and the organisation.
 E.G. the relationship with “safola” is safety.
 Reflection is the consumer’s perception for what the brands stands for.
 E.G. coke’s image more attract youth.
 Self-image is what the consumer think of himself.
 E.G. benz Car owner think that since he has bought the car he is treating
himself to one of the best car in the world.

67.  Physical
 Product features, symbols & attributes
 Personality
 Character & attitude
 Relationship
 Beliefs & association
 Culture
 Set of Values
 Reflection
 Customer’s view of the brand
 Self-Image
 Internal mirror of customer as user of brand

68. Packaged
Water
Water Brands
Picture of Sender Picture of Sender
Physique Personality Physique Personality
E Purity, Life Nature, Life giver, I E Purity, Life Nature, Life giver,
Benevolent Benevolent I
x n x n
t t t t
e e e e
r r r r
n n n n
a Relationship a a Relationship
Culture Culture a
l Physical Need, l l Physical Need,
Physical Need, Physical Need, l
i Natural i i Natural
Natural Natural i
z z z z
a a a a
t t t t
i i i i
o o o
Reflection Reflection o
n Self Image n n Self Image
Caring, Natural, Protective n
Health Conscious,
caring,
Picture of Receiver Picture of Receiver
Comparative Analysis

69. Commodity Brands
Picture of Sender Picture of Sender
Physique Personality Physique Personality
E religious or cultural, if I Value Add Value Add
E I
x any n x n
t t t t
e e e e
r r r r
n n n n
a Relationship a a Relationship
Culture Culture a
l Basic and General l l Value Add
Value Add l
i i i i
z z z z
a a a a
t t t t
i i i i
o o o
Reflection Reflection o
n Self Image n n Self Image
Value Add n
Value Add
Picture of Receiver Picture of Receiver
Definite Value Add Possible Opportunities fro Differentiated Offer
Scope for Product Innovations
Comparative Analysis

70. THANK YOU