by: Idris Mootee
Are we heading towards where all products are pretty much the same or all products will have some minimum level of differentiation to survive? Name me some products that doesn’t matter what the price or the brand is, the products are still the same? Water? Tomato puree? Sugar? Milk? Or eggs?
Anyone know the difference between white and brown eggs? Or can anyone know the difference between eggs laid by free-range chicken and ordinary farm raised chicken? I know brown eggs are laid by a breed of chickens known as a Rhode Island Red. The yolk is a little bolder yellow on a brown egg, but they have always baked and cooked the same. They really don’t taste different. Does branding of eggs have the power to charge higher prices?
I remember one case study Purdue Chicken. We were discussing in a HBS marketing class on Purdue Farms that has made a name for themselves in the chicken market because of the unique color of their chicken as well as the fresh taste. Perdue Farm chickens are yellow in color mostly due to the fact that Perdue Farms feed their chickens yellow corn, alfalfa, corn gluten, and marigold petals which would make the color of the chicken yellow. Another technique that Perdue Farms use is that they never freeze their chicken at any time. This helps to make the chicken more flavorful because the chicken will not lose its natural flavor during the unthawing process. Not only they truly created a better tasting product, they were so smart in differentiating themselves and create a very successful brand.
What about drugs? There are a big price differences between generic and brand names, are there any differences? Should consumers pay more for brand name drugs? It is important to realize that anyone may try the same brand or generic medication and have a different experience at different times, however, in most instances, the generic and brand name drugs should work the same way. The pharma are trying hard to prove the opposite but without much success.
There are many studies trying to prove certain brand drugs are more efficacious than their generic counterparts. Of particular controversy is one well-publicized story in which a brand name manufacturer paid a university researcher to prove the brand drug was superior to the generic. The researcher actually found the generic to be equivalent and even somewhat better. What resulted was a long battle between the researcher and the manufacturer, because the manufacturer refused to publish the data to support that the generic was superior to their brand name drug. Seven years later, the brand manufacturer published another study opposing the researcher's results. However, the FDA is now requiring all manufacturers of that drug to demonstrate that their products are equivalent.
What if guidelines similar to pharma are applied to other industries? Software? Computer? Soda? Shampoo? Hair dryer? If these products would be required to use the same material and whatever manufacturing standard and so on that higher end products, would you still want to pay the higher price? We might all be surprised if we did a blind testing of many of these products today. I'm just not that confident in the abilities of our taste buds or other senses to know the difference.
What if McDonald’s throw out Ronald’s name, face and the Golden Arche? That’s exactly what they did in Tokyo. It is called the Quarter Pounder store with 500 people lining up for opening. These temporary shops set up to sell the signature sandwich in Tokyo don't show the brand’s name, logo or any other McDonald's signifier—so Japanese diners only get beef and no branding. It is like Muji burger.
It is a very cool idea. 2 McDonald's stores in fashionable Tokyo’s Omotesando and Shibuya East were remodeled and reopened as unbranded Quarter Pounder shops. The minimal black and red shops, said to be operated by the "Quarter Pounder Secretariat," feature Le Corbusier sofas and only two menu items: meals with the Quarter Pounder with cheese or Double Quarter Pounder with cheese at a little more than $5.00 and $6.00 respectively. Extending the motif, all food is served in solid red packaging with black block lettering. The idea behind the unbranded stores is intended to provide Japanese consumers with a "blind test" of the new burger.
“We want consumers to discover great taste and not care about who produced it," a shop spokesman said. "Those who think of McDonald's as fast food can just focus on taste and find a premium burger, without prejudice or preconception." If only all brands can pass tests like these. I am looking forward to try no-brand Starbucks, no-brand Perrier and no-brand Prada.
The world will always need brands. There are “companies” and there are “ brands”. Let's save those accolade for marketers with the deep belief that people are predominately emotional creatures. And great companies—brands—are built for the reality that our emotional lives are complicated, many-layered and multiple meanings. Social media (conversations) help brands to participate in the dialogue and solicit authentic emotional response. 2009 will be a year of transformation for social media. We have seen a US presidential election dramatically influenced by social media. The shift that is taking place around sustainability can in part, be attributed to efforts being made through social media. Social media is moving out of the realm of specific applications, or social networks to a place where the appropriate tools, applications, widgets, technology will be applied and integrated into the way we work and the way we run our lives.
Marketers and their advertising agencies need to stop “making up brand stories” but “telling authentic brand stories” and start playing seriously in the social media sandbox. It is about how fast they can learn using stories to engage customers. Marketing’s job is to create the glue that makes brand conversations happen. Marketers also need to be the glue between different internal functions to make these customer conversations happen because is touches every department including IT, customer service, operations and legal.