Editorial: Out of the Clutter

By Len Monheit

I left this past week’s SupplySide West event literally overflowing with impressions and thoughts (many of which I’ll share in my next column this coming Friday – after I sort through the clutter of materials, notes, impressions and conversations from that intense three day period). In this column though, I (perhaps appropriately) hoped to focus on crowding, or to put it another way, ways in which companies in the marketplace differentiate themselves or seek to stand out. It would be impossible to deal with all the examples, patterns and pitfalls, so bear with me as I run through some top of mind examples, both from direct show activities themselves, as well as the programs the show activities are intended to define or launch.

To brand or not to brand?

Companies have long-recognized that effectively building a brand is a way to differentiate a product from the commodities in the marketplace. The challenge is building and defining the value associated with that brand and then communicating that to your target audience. Choosing the audience is sometimes another challenge, with an incorrect choice leading to a totally wasted investment and the squandering of valuable time to market traction. On the show floor, we saw numerous examples of ingredient brands, some directed solely at trade, others a mix of trade and consumers, some totally consumer driven, and at least one brand redesigned and re-targeted at a trade audience, after its failure as a consumer-focused brand.

Lessons learned – choose your brand identity and value carefully. Likewise, make sure your value resonates with the intended audience. Identify clearly your core competencies, build these into an approach that applies value to everything you do, including brand-building – if you determine in fact, that you have the investment stomach for it.

On the SupplySide show floor, I observed new branded services, branded ingredient firsts from companies who had never ‘brand invested’, brand clutter as names in certain categories seemed almost slight variations of each other, and a few companies investing in corporate branding, in some cases as the pull-through for specific ingredient brands, in others as an effort to umbrella the entire product offering.

There’s really no ‘right’ answer to this issue. It depends on so many circumstances. Companies certainly need to make certain though, that they’re asking all the right questions – of themselves, their clients and of the marketplace.

Do vendor presentations work?

Companies use a variety of strategies to get out from the clutter, and at a trade show, sponsorships and vendor-sponsored or directed presentation are often employed. Frequently promoted in show guides and pre-show publications, these events can certainly be a hit:miss’ proposition. At this past week’s show for instance, one can argue that all of those with scheduled presentations stood out from the crowd to a certain extent. What can also be argued is that for some companies, the value was much stronger than others. Attendance at these sessions ranged from ten to sixty attendees. If ten potential clients (one or two are likely competitors) can justify the event cost, then you’re ahead of the game. If not, you’re still caught in the clutter.

What’s UP with IP?

Some companies have considered an investment in intellectual property (IP) to be part of a differentiation strategy. For this to be effective though, these companies must also be willing to back up their investment with aggressive tactics and deep pockets to prevent abuse of their IP by unscrupulous competitors. Sometimes, the value chain itself doesn’t adequately reward this investment and commitment, as buyers purchase low cost ‘alternatives’ at a fraction of the cost. Quite frequently, those companies that make the investment in IP have only themselves to blame as they either don’t protect their initial investment, or don’t adequately communicate what their IP position really is – its unique value to the marketplace compared to other competing products. In other cases, a buyer’s short term approach (ie. Cost-savings) potentially handicaps an entire category. Until we get this aspect right, (and transparency is part of the solution), companies are going to be extremely loath to continue to invest in IP. That would be bad.

Global Marketplace over-populated?

More than ever before, we operate in a global marketplace where competition can come from anywhere, and tracing real product origins are often impossible. At the same time, we are expected to operate in an environment of increasing certainty, both in our understanding of the products we buy, but also of the suppliers we do business with. Many buyers are reducing the number of vendors they do business with, in an attempt to better focus on a core group of suppliers and deepen these relationships. Operating counter to this, is the desire, if not need, to ensure that any new product opportunity can be properly evaluated, or for any cost-cutting measure to be considered.

Superimposed on this environment is the emergence of new tiers of ingredient suppliers from around the world, offering sources of commodity ingredients, but also, with various degrees of sophistication, trying their hands at branding, patenting and other strategies to gain some market traction. It all gives rise to a confusing, cluttered marketplace that is certainly not getting any simpler to operate within.

Getting out from the clutter, either as a seller, or as a buyer, has never been more difficult, but also never more valuable. Some are succeeding with poise and skill, others by sheer persistence, and their success was evident at last week’s show.

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