Wednesday, 14 July 2021

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Scarcity is the anchor on which the subject of Economics is based. If what people want is scarce that will fetch a price. What price it will fetch will depend on how much scarce it is compared to how much of it people want. In the language of economists price is the function of supply and demand. Looking at it from the point of view of business, it is scarcity which creates value. The scarcer the product the greater is the value. The caveat is that it is a product that people need.

What happens when you produce a product which people need, and because you have limited capacity to produce, it fetches a good price? Obviously lured by the price, others will join the bandwagon to produce it, eventually making its scarcity nearly zero, and its price also near zero. The question that arises is how can there be scarcity of a product which you produce, if everyone in the world can join the bandwagon to produce it as it fetches a price due to its scarcity? What is the secret of producing what everyone can produce and still give a sense of scarcity even if others join as producers?

This question invites us to the world of marketing, the world of brands. That is, every product which
(a)   you innovated,
(b)   around which you created features or sentiments of features
(c)    which customers like and
(d)   other producers cannot imitate, for the present,
is a brand. 

Every product is potentially a commodity. At what stage the producer differentiates it from other producers’ products depends on his innovative capabilities, market savvy approach and hard research and product quality. The next stage is branding. Brand is differentiation in product, creating an aura around the product or the organization, creating strong loyalty amongst customers etc. Branding is what creates the barrier for others from entering the specific market and maintaining and/or improving the scarcity condition. But the brands can wear out. People’s loyalty to brand is not etched in stone. It is perpetual war for loyalty.
How marketers face this challenge is to take the relationship between the product and customers to next level – the level of emotions. Saatchi & Saatchi (see their website) call these relationships Lovemarks. “Lovemarks thinking is the unique way we look at the relationships people have with products, services and entities. Lovemarks are the future beyond brands because they inspire Loyalty Beyond Reason”. Excel Expert Help

The tangible ingredients of the product such as quality, utility, delivery etc. are important; with Lovemarks they are overshadowed by the new intangibles. “At the core of every Lovemark is Respect. No Respect? It’s not a Lovemark. It’s as simple as that”. These are laudable mission, indeed. But, how do we create Lovemarks. This has been very neatly distilled into some principles by Morgen Witzel, in his interesting book Tata – The Evolution of a Corporate Brand. Witzel’s is the story of how a one-hundred-fort-years emotional relationship is built by one of India’s largest multinational conglomerate, the salt to automobile and hospitality to software group, Tata. Witzel says, “A corporate brand is not what you say it is. It is what you are. If you want your brand to have the values of virtue and trustworthiness, then be virtuous and trustworthy and demonstrate it in your actions. If you want your brand to signify quality and value for money, then make and sell quality products that give value for money, then make and sell quality products that give value for money. Be what you want your brand to be. That…is the final and enduring lesson that every business can take from the Tata experience.” Lovemarks need not be a woolly idea like loyalty beyond reason; it can be real and definite if the organization can walk the talk.. Excel Expert for Hire

Why Self-Destruct to Re-Imagine
V.K.Talithaya
vktalithaya@managementmasala.com
    
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On 7/14/2021

1 comment:

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