Because the brand concept evolved in the consumer goods markets it is no reason to reject it in business-to-business technology markets. But neither can it be used as is. In this article, we understand the branding gap, draw lessons, and understand the differences, from an industry that creates enduring brands – the FMCG businesses.
A great deal of our knowledge about branding and brand strategies comes from the accumulated experience of consumer-packaged-goods companies (FMCG) such as Unilever, Procter & Gamble and Nestlé. They practically invented brand management and have created a wealth of enduring and highly profitable brands. We’ve seen in Part I how for a large part of the high-technology businesses identity is seen as a logo or trademark and branding, where does that thinking come from and why. That is the major gap in how enduring the technology is in the market-place.
High-tech markets are often more segmented, focused, and granular. Marketing high-tech products and services, especially to the enterprise, costs less than marketing consumer packaged goods. An individual’s decision to buy a certain brand of soap may be more emotional than that of a company’s decision to go with a certain line of networking equipment, but the line between a high-tech product and a consumer product is becoming increasingly fuzzy. Parallel motives exist even in business-to-business high-tech purchases. Therefore there is a great deal to learn from the FMCG business on bridging the technology branding gap.
Lessons from FMCG branding
While the High-Technology industry is crowded and thrives on discontinuous change, marketing hardly ever focuses on benefits. The FMCG industry (as a surrogate for other industries with mature marketing practices) on the other hand has a much slower rate of change but articulates great continuity in branding! They very successfully make a promise of value is critical for a company to differentiate itself from its competitors and stake a solid claim in its intended market sometimes for decades.
But if FMCG industries are great in branding then why don’t tech companies just run with it? Why doesn’t the high-technology industry leverage FMCG (say) marketing? In the first place, each is defined by the contours of its industry. The channels are not the same. The customer is not the same. The buying decision is not exactly the same. Understanding the differences allows us to highlight how to fill the branding gap in high-technology. Here are some high-technology branding aspects and how they are different from their FMCG counterparts.
Promise of Value
A fast pace of change renders all technology product brands obsolete quickly. Customer criteria and expectations change rapidly. The overall expectation of experience that a customer has with the brand that is it’s purchase-use- feedback-repurchase is the something that the FMCG business likes to tightly control even though the product travels through long-chain channels for delivery and renewal. On the other hand technology businesses have fewer degrees of separation from the actual consumer to where the product originates but the high-tech businesses seldom actually completely articulate their promise of value which is core to building a brand.
Product Longevity
In the FMCG industry, technology is not fast changing and there is a greater emphasis on emotional messaging and building a connection with the consumer. The relationship between a brand and its consumer forms the basis of loyalty and companies build a brand with a horizon that is years if not many decades. In high-tech businesses, not many brands attempt to establish that connection with the consumer primarily because even the best B2B product life cycle is seen as 3-4 yrs.
Communication Asks
The purpose of branding is different in both. FMCG branding builds a communication cycle to build recall or induce purchase. FMCG brands focus on the ‘touch’ points where the consumer will experience it to induce an interaction. For high-tech businesses, a large part of their business may be with B2B customers, and advertising is a less important ingredient of the promotion mix than more cost-effective ways of approaching customers such as trade shows, the Internet, and user groups.
High-tech users look for solutions to problems — they are invariably looking to ease a pain point or make life easier and they often start by searching for an answer. In high-tech branding, therefore, it is utilized communications that reach customers at the exact moments and places where they seek to engage to solve problems.
Articulating Benefits
The most key lesson that FMCG brings to branding is the focus on benefits. Most high-tech branding talks about features and not benefits. There is a lot of engineering stuff narrated in high-tech branding whereas FMCG branding has been able to convert those features into a consumer benefit that in turn focuses on a single promise of value.
Perceived Risk
FMCG products typically carry relatively small perceived risk. Unit prices are low. Time to repurchase is short. Demand for user behaviour change is low. High-Tech products, on the other hand, have much steeper learning curves and most of the time a multi-year purchase lock-in. High-Tech branding message needs to address this risk and manage it through the adoption curve.
Purchase Cycles
FMCG purchase decisions are made quickly and most often by lone consumers based on few criteria and purchases often characterized by impulse buying. High-Tech purchase decisions are more B2B decisions and are made by groups or committees over long evaluation cycles based on many criteria followed by extended negotiations. The high-tech brand, therefore, should be used to set and influence decision-making criteria as well as defend pricing and terms.
Availability, Distribution & Time to Experience
FMCG products typically have deep vertical supply chains for delivery direct to consumer at the time of purchase. Consumer enjoys immediate gratification. In the technology business multiple vendor components ‘assemble’ the product experience. Delivery to the customer includes partners, resellers or multiple third parties such as integrators. Implementation and operation trail purchase by weeks or months. High-Tech branding, therefore, has a large role to play to assure buyers of user experience, risk avoidance, and return on investment.
Tech Branding Lessons from FMCG
High-Tech companies often focus too heavily on the product that they’re selling, rather than telling the story behind it. Technology decisions, especially B2B purchases, are expensive especially when they impact an entire organization. These costs are both direct and indirect (maintenance, training, etc). As against FMCG where risk is low, gratification is immediate and cost of purchase is simple. To induce buyers to buy a high-tech brand must sell a vision, not just a product. A customers’ emotional response to high-tech branding has far more influence in their purchasing decision, even a B2B product, than the actual product itself. High-Tech branding requires continual reinvestment to ensure users engage with the product and develop a strong loyalty to the brand. High-Technology products reach a threshold of functional breadth and depth quickly which then delivers diminishing marginal returns to customers. Only companies which have developed a brand preference, over more temporary ‘product’ preference, insulate themselves from commoditization and set themselves apart for continued growth.
Rakesh Shukla, TWB_
Entrepreneur, TEDx speaker, Philanthropist, Rakesh Shukla is a 1996 MBA graduate and 1993 BTech. Rakesh Shukla is the Founder & CEO of TWB_ which is the partner for technology & business content for Fortune 500 leaders worldwide. A motivational speaker he speaks on creating success from professional and personal failure. He divides time between his 2 homes in Bangalore and is called the ‘dog-father’ for being papa to the 750 rescued dogs that live with him at the VOSD Dog Sanctuary. Rakesh has featured in 100+ interviews on the BBC, CNN, Al-Jazeera, CNN-IBN, NDTV, India’s national dailies, and at TEDx talks.
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