Sunday, June 13, 2010

Evolution of a Commodity to a Brand

Ever thought you would buy a “Tata” onion, “Reliance” tomato or a “HUL” mango? But, this will be the reality in the near future. As people become more brand-conscious; commodities will have to break the existent barrier of being sold loose and emerge as brands. A part of it is already being done, with the emergence of organized retail formats and to leverage on the existing Brands, many companies are launching commodities in their brand names. Imagine “Atta”, where people used to buy wheat and get it grinded for personal use. Now, trends have changed and people are shifting to buy ready-made atta sold under – ‘ITC’, ‘Pillsbury’ and other Brands. 10 years back no one would have imagined buying a BRANDED atta…!

It is not the case only in the FMCG space. Consider, Cement for example. Earlier people were un-interested in the brand; they used to buy the cement based on the “availability” and “price” factors, same as any other commodity. As the number of Cement players have increased; each company is trying its level best to differentiate its brand and hence ‘BRAND’icize it. A lot is being spent on the Branding efforts and to increase to aware its awareness. The results can obviously be seen from the sales reports. The Branding of these commodities has eventually affected its sales and improved the whole scenario. People have developed specific liking for the brand and demand their favorite Brand of Cement.     

The question that evolves here is: “why is the cement industry so desperate to Brand their products?” The answer: they are all tired of being perceived as regional commodity players and want to grab a pan-India mind space. “Cement is no longer just a commodity. Prices have remained unaffected even during monsoons,” says Anil Singhvi, vice-chairman of Reliance Natural Resources, which wants to set up two cement plants with a capacity of 10 million tonnes each. Amid rising competition, many companies are also looking for a unique product positioning through strong brands and are creating separate marketing teams for their different categories of products.

Hence whenever people are buying cement for construction purposes; they specifically demand their favorite brand even if it is costlier than the other brands and also wait for its availability if unavailable. The same can be said about other commodities such as metals, eatables, staples, etc… Many companies which are selling commodities are now shelling out crores of rupees in their marketing efforts and to “Make their product a BRAND…!”

Know how JK White Cement is branded:

A project on the Perceptions and Branding of Birla Gold Cement:

Internship in Cement Industry


NagaRaj Raj said...

good post

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