After spending a summer "branding" a commodity (see also: dirt)...I can't help but wonder how many commodities people have tried to brand. In my opinion, the secret to success is some sort of "value-add" that competitors cannot replicate. For example, The Scotts Miracle-Gro Company doesn't just pack dirt in bags, label them, and sell them at a premium - no, they add a proprietary fertilizer (again, thank you Bloomington Brands, it is Osmocote)...and tweak the formula to be just right (perlite, peat, etc.). So as I read about gold trading above $1000 an ounce in pre-trading this morning, I couldn't help but think...are there some commodities you CAN'T add value to? BP has added some sparkles to oil (cleaner engine?), Dasani added something to water (salt?)...but what about GOLD? I see gold as a commodity that you wouldn't want to "value-add", in fact anything you "add" would de-value gold, right? The further away you get from 100% pure gold, the worse off you are.Maybe you pound it into commemorative coins and put it in a really fancy bag. And advertise in Sunday circulars. And late at night on TV. That seems to work for some "marketers"...
Who's to say that's not true of a LOT more commodities than one would think - maybe some would say the farther away you get from "pure" dirt, the worse off you are...? Corn, soybeans, cocoa - the same applies for them too.
ReplyDeleteTo bring value to a commodity doesn't necessarily mean you have to physically "add" something to the product to make it better. For example, if you have a company that produces gold, you can add value to the gold by being the company that always stands for purity or ethical treatment of miners... etc. Consumers would then be willing to pay more because they have full trust that your brand of gold will be completely legitimate and pure. The commodities will just battle on price.
ReplyDeleteInteresting read, I'm looking forward to taking Marketing classes.
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