Question

Topic: Branding

Branding For Small Companies

Posted by tahir.ahamad on 2/7/2010 at 4:19 AM ET 75 Points
We are into manufacturing & marketing of Packaged Whole Wheat Flour. Our Main Customers are Housewives & women above 30 years age. Our product is not unique , its quality is more or less the same as other competitors product. Our Packaging Design is better than others. We dont want to compete on the basis of price as it would make our brand secondary to the high price competitors. Now how can i make our brand work . our main aim is not profit or volumes but to build brand that too with marginal profits. What should be our pricing model & promotional Schemes ?( Keeping in mind that this business runs on a marginal margins of 2%) . How can i pass the pricing benefits to the distributor or Trade mans & not to the consumer. For eg. if i sell for low price to the distributors or wholesalers then they too would sell easily for less to the retailer & so the retailer too would work on low pricing model , again making our product secondary to the high price options in market. generally in case of our product low price to customer means inferior quality product? Please help
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RESPONSES

  • Posted by Chris Blackman on 2/7/2010 at 8:49 AM Accepted
    The problem is you are really in a commodity market and you are more or less dealing with your product as a commodity.

    To build margin you need to get out of that commodity positioning and to do that you must create some differentiation.

    Flour is all pretty much the same, isn't it? What can you do to make your flour seem better or different? What are the key attributes of flour that consumers are looking for when they ascribe loyalty to one brand or another?

    For example, flour with a light, fluffy texture and no lumps sounds good. Could you sift your flour one more time than a competitor? If so you could say (for example) "triple-sifted for a lighter, fluffier texture"...

    If you can make the quality seem better, you can justify a higher price (since the consumer associates price with quality).

    Here are some more ides: "We sifted it an extra time so you don't have to" or "Save time with our triple-sifted flour and get better results. You family will love you for it..."

    I think you will end up in a discount death spiral if you attempt to grow share by increasing margin to distributors. A better way is to provide bonuses to distributors for volume growth - keep the price the same, but give them a bonus for shifting more cases/boxes/outers/sacks or whatever,. paid ninety days afterwards if they have maintained volume growth. But change the product and make new claims on the packaging first.

    Hope that helps.


    ChrisB
  • Posted by Jay Hamilton-Roth on 2/7/2010 at 9:36 AM Member
    Chris has provided some wonderful advice. Another suggestion, can you vacuum seal your package to "lock in freshness"?
  • Posted by tahir.ahamad on 2/7/2010 at 12:19 PM Author
    Thanks ASVP/ChrisB & Jay Hamilton-Roth for your valuable suggestions. for vacum seal packaging we already have that and so do other brands. This whole wheat flour is used for making Indian Flat Bread ( Chappatis) & during the process of making that the flour & other ingredient are sifted at home. the sifting thing wont work in india as sifted flour in india means All purpose or refined flour but in our case its Whole Wheat Stone Ground Flour with 100% Bran in it. Infact We have made a unique claim on our packaging i.e "Stone Ground & 100% Traditional Flour" but still due our tight budget for advertising other multinational brands are above us. quality of product is same as of others as whole wheat atta is just crushed & ground 100% wheat & nothing else. Quality of wheat that we purchase is same as of other brands. Main thing i would like to know is why a customer would shift to our brand . If i give some price benefits to the customer , will i ever be able to increase my price in future ? regarding the bonus to the distributors would it work ?? explain the bonus option in detail if you can
  • Posted by ranjanpaul on 2/7/2010 at 1:03 PM Member
    One way of getting out of the commodity trap is to own an attribute that is not necessarily product related but something that is it tied to an emotional string (pride of the nation).

    I agree with Chris about the pricing. Generally the trade would use the extra money for price discounts and to reach the eligibility to receive extra discounts. Alternatively, you could provide non cash incentives - joint advertisement at the retail level where you promote the store or run brand experience programs where the channel gets visibility etc.

    Ranjan




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