Monthly Archives: April 2007

Applying the water theory elsewhere

I love the World of the water marketing (please don’t stop reading the post categorizing this to be another display of my obsession with water…I have a point here). We can adopt the principles of water marketing successfully in many diverse industries. Also, correlating the water industry with other industries might justify some buying decisions made by the customers, and some pricing decisions made by the sellers.

One of the uniqueness of water marketing is that marketers are trying to sell something that is otherwise freely available. So they make the product attractive enough for customers to pay for it. This draws great parallels with the software industry. There is tons of open source software out there, from operating system to a word processor, which are freely available. But still people pay for proprietary software. I think just like bottled water, software companies are better able to present their software to the customers and win their faith that makes them buy their products rather than going for the free ones out there.

Customers find themselves more secure while consuming a product that has an owner selling it to them. This puts spotlight on another characteristic of the water marketing. Water marketing is one of the best examples to prove that security sells. One of the primary reasons anyone buys bottled water instead of consuming tap water is their belief that bottled water is more pure and safe to consume. In the same way, any company can increase the value of their product by adding the security dimension to it. Every industry from automobile to housing to mutual funds has a security feature that adds to the value of the product. So security sells better than any add-on and should be leveraged with proper planning.

Time and again we have seen that localization is the key to marketing on the global platform. Marketers selling the same product in different geographies need to take into account what appeals to people in those geographies in order to market the product effectively. Water marketing adds more weight to this. Just like water is sold in different parts of the World with different messages and taglines, varying from beauty to safety, in order to market any product in different geographies, the message associated with it needs to be customized.

The diverse World of water marketing also shows the importance of market placement. Companies like Evian and Fiji water end up at one end of the spectrum charging multiple times the price charged by any other company. They have placed themselves in the market with great precision making their brand and product elite while competing with the cola giants and the local brands. This draws great parallel with iPod placement in the personal music player industry or BMW placement in the auto industry. This kind of market placement shows how a company can charge premium by a distinctive placement of its brand and products.

Creativity has no limits. If you think that you are in a dull industry with not enough space for applying creativity, take a look here. There cannot be anything that can be more dull than water. It’s not the product that is dull or exciting, it’s the marketing efforts put behind it that makes it dull or exciting. Don’t sell just the product; bundle it with a promise and see the wonders.

The Brand Ecosystem

Establishing brand equity is the most challenging task any company faces. It is indeed very difficult to create and then sustain the image of the brand, and this is made even more difficult by the focus a company puts on various aspects that constitutes the brand. It is often seen that a company gives more importance to one aspect of the brand, be it the products, customers, strategies or the organization. In order to talk about how to increase the value of a brand, it is very important to understand what drives a brand. Is it the products (and services) a company deliver, or the customers of these products or the employees who produce them or something else?

Often companies are highly focused on the customers. Customer focus is great and of course very important. Listen to the CEO of your favorite company talk and most important take away from it will be how customer focused the company is or how much more customer focused they want it to be. But can customers drive a brand all by themselves? I don’t think so. Customers are of course a very important part of the brand but they are not the sole drivers of the brand.

Then there is the product. There are a set of companies that believe by creating the best product out there, they can win over the competition and strengthen the brand. As much as it is true that you got to have a great product to establish your brand, it is also true that only delivering the best product will not take you too far. World is full of examples where the most famous brand in the market does not produce the best product. This is because there are numerous other factors that add to the value of the brand.

There are similar explanations for employees of the organization. Smart people are important to lay a strong base for a brand, but they alone cannot define the destiny of a brand. And then there are many other things like strategies, financial muscles, market placement and so on that are so important for a brand but on there own are of very less value.

We can very well conclude that none of the components of a brand on its own can drive it. So what drives the brand? It is the connection between all these components that drives it. All these components brought together forms the ecology of the brand and that in-turn becomes the driving force behind the brand. This is something that can explain the problem or the difficulty in establishing the brand. Often times we are so much focused on one of these pieces that we lose sight of the big picture. We are artificially creating separation between the company and the customers, various departments in a company, and between the company and its employees, but in fact they are all part of the same system. All these together defines the brand ecosystem and the strength of a brand is directly proportional to the number and strength of the connections between the various components of this ecosystem.

The company in itself along with its people forms the foundation of ecosystem. By people here I really mean all the people. Everyone from product development to marketing to finance is part of the foundation and have equal importance. Then there are the customers and the connection of the company with its customers. This is one of the most important part of the brand ecosystem that can make or break the brand. Companies connect with their customers in innovative ways that highlight the importance of this particular connection. Then there is the product that the company puts out in the market. It is very important that the product connects well with the customers and meets their requirement. Various strategic partnerships to provide a wholesome experience to the customers is also equally important. Bottom line: the bigger the ecosystem of a brand and more the connections between the components, the greater is the strength of the brand.