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?
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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
V.K.Talithaya
vktalithaya@managementmasala.com
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