Posts Tagged ‘commodity’


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 “Innovation is the calling card of the future.”

If there is one name that has been revolutionary in the world of furniture for over 70 years, it is IKEA. Being the world’s largest furniture store, IKEA today enjoys the status and reputation of a cult in its domain. An acronym made up of the initials of Ingvar Kamprad (the founder), Elmtaryd (the farm where he grew up) and Agunnaryd (his village in south Sweden); IKEA has taken furniture making way beyond its basic and plain existence. It has turned it in to a unique process of innovation, functionality and an ode to the modern lifestyle. Let us tell you how it all began.

Mr. Ingvar Kamprad, his vision and the emergence of a brand

Showing the signs of entrepreneurship right from the age of 5, Invgar Kamprad found IKEA at the tender age of 17. He began the venture with the reward money he had received from his father for his success at the school! Isn’t that just fantastic for a teenager when the rest of his friends would have been happy going out clubbing with that money?

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Initially, Ingvar’s aim was to sell goods by mail orders. Gradually, he began offering furniture produced by local manufacturers. He then started advertising about these furniture products in his brochure called IKEA News. Following the success and growth of the business, Ingvar came up with the first IKEA catalague in the year 1951 where the focus was entirely on furniture and home furnishing products. These IKEA catalogues today have become almost as iconic as their brand itself is.

IKEA catalogues proved to be a great idea for the brand. The business grew beautifully and by the year 1959, Ingvar Kamprad had 100 employees working for his company that he had started as a teenager.

The Turning Points

  • The arrival of IKEA stores :

By early 1950s, IKEA made a major change in its way of functioning. The culture of doing business by mail order was witnessing a claustrophobic competition. It was deteriorating the overall market experience for both the customers and the business owners. IKEA decided to exit this scene at the right time and decided to create IKEA stores – a permanent and directly accessible space for the customers where they could view the products before purchasing.  This overcame the flaws that business by mail order had.

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These stores turned IKEA in to an experience for its customers. Here, the customers got to see and touch the affordable and well-made goods in an actual room setting. This idea proved to be both sensational and successful.

  • FLAT PACKING – an innovative, incredible and ingenious move :

A small problem can give way to a big idea. A consumer who bought one of its wooden tables was finding it difficult to get it in to the car for the transportation. IKEA didn’t let it’s consumer’s issue go unnoticed and instead took revolutionary measures to solve it. They started making furniture which can be unassembled for the transportation purpose and can be assembled later on. Interestingly enough, it also involved the customer in the whole IKEA experience by letting him assemble his furniture on his own. Now, is that not just brilliant?

IKEA – The Furniture Phenomenon

Today, IKEA is more than 70 years old furnishing empire and is still going just as strong. Along with many other things, IKEA is the pioneer of self-serve furniture warehouses. The consumer  just has to decide his budget, select furniture, pack and carry it home. That simple! It has 345 stores across the world in 42 countries(and still counting). It has 150,000 co-workers working under it. Its turn-over has reached the total of 29.2 billion Euros. IKEA magazines have now also been converted in to mobile apps and guess the number of its downloads – it’s 9.7 million! It all sounds so surreal, doesn’t it? Well, hard earned success has its own charm. And, at this point, let us whisper this to you one more time – IKEA was all started by a 17 year old boy with his reward money!

A thing or two to learn from IKEA

What IKEA has offered to its fans/consumers is an intense brand experience. The way the IKEA stores, flat-packing and the self-serve furnishing warehouses have generated more of the consumer’s participation in IKEA ethos, it sums up as an outstanding example of brand immersing. Its casual and friendly connect with its buyers has created an absolutely relatable and enjoyable brand essence. No wonder the buyer gets convincingly hooked on to IKEA in the world filled with many other rivals.

ENSOism

There has always been many names out there who made furniture. But, not everybody could become ‘IKEA’. Why? Well, IKEA never lost its grip on its consistency. Be it its unified way of communication, reinventing itself at the right times or keeping the consumer’s convenience in the centre of everything – it has always maintained its brand perception. It has a knack of keeping its consumer engaged with IKEA by a marketing tool as small as the IKEA catalogues to its latest mobile phone apps. It has always been right on the track when it comes to generating a strong brand recall. Changing times did not matter at all! IKEA never missed out on adding value to the brand experience it offers. And, THAT what makes IKEA what it is today.

“What is good for our customers is also, in the long run, good for us.”
– Ingvar Kamprad

adidasImpossible is nothing, seriously!

Picture this. It is the year 1920. Adolf(Adi) Dassler is just another cobbler living in the town of Herzogenaurach, Germany.  This young boy, all of just 20, also has a passion for running and extreme sports. Lately, something has been hovering over his mind. It is the need that he has spotted in the sports market for better shoes. The shoes that can enhance a sportsman’s performance and can go beyond functionality. And guess how he decides to deal with this need? With whatever knowledge he has as a trained cobbler, plus his experience as a sportsman and that mixed with his passion to bring about the change – Adi himself starts making sports shoes in his mother’s laundry! Today, the world knows what started as an in-house venture as the global giant ‘Adidas’.

Many can make shoes. But it takes vision and passion to turn them in to ‘Adidas’.

Almost a century back, who would have thought that what Adi was making in his mother’s laundry was going to become a game changer?  He wasn’t just making shoes. He was creating a legend. How did that happen? How was he not your regular shoemaker? What did he do so differently than the others that Adidas grew in to a phenomenal brand?

Let’s have a look at what made Adidas, well, Adidas!

  • Spotting the need and addressing it :

Adi Dassler himself was an ardent sportsman. Along with many other entrepreneurs, he too had spotted the need for a better-performing shoes for the sportsmen. The difference between him and those other entrepreneurs was that Adi not only spotted the need but went that extra mile to address it by making an effort to create those ideal shoes by himself.

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  •  Determination to make it work :

Being a path maker is anything but easy. In Adi’s case it was even trickier as starting this sort of a business in Germany soon after the First World War was not a cakewalk. But it was his determination that made him rise above all the difficulties and continue with his endeavour.

  • Innovating and improvising :

As it was the dark era of post World War I, Adi didn’t have the privilege of availing the ideal material to make his dream shoes. Lack of resources, however, couldn’t bog this tough willed guy down. He tried making shoes out of whatever he could lay his hands on –  parachutes, army helmets etc! This outstanding creativity and never-say-die attitude kept his business going. It also indirectly refined Adi’s vision to develop the perfect running shoes.

  • Making it effective and result oriented :

As smart and focused as he was about his venture, Adi always kept himself in constant contact of many of the world’s best athletes. It made him understand their requirements and enabled him to perfect different shoes for a variety of sports. For example, In 1954, Adidas came out with shoes for the German football team. These shoes had screw-in studs, a first-time feature at that time. This feature made the German players get a strong grip during a match while running on the wet ground on a rainy day. It actually made the German team win against Hungary and these shoes came in limelight all over the world overnight.

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  •  Smart, fearless and unique ways of marketing:

Adi was always so confident and proud of his products that marketing them boldly and aggressively came quite naturally to him. By 1936, majority of the German athletes used to wear Adidas. This also made Adi realize that athletes themselves were the best advertisements for the products. In fact, Adidas marked the beginning of the concept of sports promotion and endorsement that exists today.

  • Expansion :

By the time Adi passed away in the year 1978, Adidas had 700 patents and other industrial property rights under its umbrella. It had also pushed boundaries of its reign by its global expansion in to new product lines like leisure and clothing sector, apparels, sports accessories etc.

A thing or two to learn from Adidas

What kept Adidas a consistent brand was the clarity of vision of the owner as well as the alignment of the product with his vision. The basic idea behind the product that the shoes should protect the athletes from injury and that they should last; created such a pioneering brand promise in those times that it changed the consumer’s perception forever. The credit of inventing something as revolutionary as brand endorsement also goes to Adidas.

ENSOism

When you have vision, vigour and the right product; all you need is that determined push to widen your reach. A wider reach that you so aptly deserve. Your product can be that one thing that refines the way the world lives. What follows after that is an eternal glory. Ask Adi if you don’t believe us!

“You need good thinkers around you. Without them, you will go broke.”
– Adolf Dassler

Brand vs Commodity

 

How about shining even brighter?

Evolution can often be optional. Like, in a business you can either choose to remain a commodity and can be quite a good one undoubtedly. Or, you can choose to turn it into a brand sometime down the line when you are ready for it.  One question that seem to puzzle a lot of people today is that, if they are doing fine remaining a commodity, do they really need to go that extra mile and turn themselves in to a brand? Yes, definitely – if you ask us. Let us tell you the why part of it.

 

Remaining a Commodity can cost you more than you realize!

Being a commodity may feel like living happily within your comfort zone and sailing through tested waters. But, it also means that you are still putting up with some hidden strains and drawbacks attached to it on an everyday basis. Like,

  • By being a commodity type of a business, you generally don’t have a say in the market simply because you don’t have the monopoly. It rips you off the power to negotiate or to have an upper hand.
  • Dealing with the current scene of inflation becomes even more difficult for you as you can’t just reduce or raise the price of your product due to a huge number of competitors lurking around. One slip from your side and they will snatch your business away.
  • India is typically and predominantly owned by unorganized retailers. Take the example of apparel shops, grocery stores, barber shops etc in your vicinity. An average Indian has the mentality of going to these around-the-corner outlets for his day to day requirements. But when it comes to valuing an experience, he will always fondly talk about the sophisticated services he gets at the salon which is a part of a chain across the nation, or the fashion label that makes him look special in an authentic way or the branded grocery store where quality is a sure shot. That time he chooses to praise the brands that he has experienced and not the commodity he has often opted for. So the point is, by continuing to be a commodity and an unorganized retailer, you are risking to remain faceless and not-so-valued in the consumer’s mind.

 

Perks of evolving in to a Brand

  • The coolest thing about evolving your commodity business in to a brand is that you earn a certain level of trust and personal equation with your consumer. And that gradually gets translated in to the consumer’s loyalty towards your brand/product.
  • Once you have earned the consumer’s loyalty, he readily pays the price that you set for your product or service. The possibility that he might get a similar product somewhere else for a lower price won’t alter his decision then. For instance, an admirer of the brand Apple will always find the ways to buy its products. He won’t really mind the fact that Apple products will cost him way more than the non-Apple products. What makes him stick to Apple irrespective of the high prices? It is his trust that Apple has won and the association that they have always lived up to.
  • Becoming a brand generates a recall about you in the consumer’s mind. Meaning, the consumer remembers you distinctly without mixing you up with the others from your segment. That can win quite an edge for you.
  • For example, let’s take an unorganized handicraft manufacturer on one hand and a brand like Fabindia on the other. Which one, out of these two, will you remember markedly? Which one do you recommend to others with confidence? It is clear that a brand enjoys more of your exclusive attention than a commodity.

 

So, is it actually the time for you to go for THE leap?

The switch from being a commodity to becoming a brand should be rightly timed.  When you know that your product is well in alignment with your vision and it has that USP which makes it stand out distinctly in your segment; it is time for you to rise above the rest by becoming a brand and thereby becoming a trailblazer. Dare to dream bigger and bring in the change that sets you apart. Now THAT calls for a new and exciting endeavor, doesn’t it? Fix a rendez-vous with ENSO and we will be more than glad to assist you through the process of becoming a brand.

Let’s make you the trailblazer, let’s make you the change-maker
and let’s do it together!