Wednesday, March 27, 2013

Pilsner Beer and Ipoh White Coffee ….what do they have in common?

Pilsner beer is said to have gotten its name by referencing to the city of Pilsen in the Czech Republic, where a special technique was developed for brewing beer. Ipoh White Coffee got its name from the famous town of Ipoh (in Malaysia) where it is famous for producing the traditional white coffee. Peking duck got is name from the way ducks were prepared, roasted and served in a unique way. These are just a few examples where a category has been created by using the name of a place as a new descriptor to an existing product category.  The list goes on for Edam cheese, New York Cheese cake, Selangor Pewter, Chinese silk, and others.

Some of this naming convention happened by choice, and others by accident. The question is, why do people do this? This is because the name of a specific place represents a set of unique associations that manifest the differentiating benefits of a new category formed. Not only that, the name of a place also brings along with it a sense of aura or mystique that creates curiosity. This is because a town or city encapsulates a rich set of associations such as its culture, resources, heritage and people that create its uniqueness. By using it as a descriptor to an existing category, it is able to transfer this set of unique associations to create a new category out of an existing one. New categories with relevant and new perceived benefits often create new excitement in the marketplace.

This is a concept that cognitive psychologists define as conceptual combination – where an adjective or sometimes a noun (e.g. descriptor such as colour, shape, size, etc) that is place in front of an existing noun (name of an object) will be able to change, partially or completely, its existing meaning. For example, “Sports” placed in front of “car” gives a deeper meaning to the word “car” that one is describing.  Similarly, in branding and new category development, conceptual combination is a powerful technique (if used correctly and carefully) to create new categories. New categories with relevant and new perceived benefits, often, create new excitement in the marketplace.

Taking this concept to branding, we can see an immense opportunity for brands to differentiate and stand out. So, for brands to find new extension opportunities or new line extensions, think about conceptual combination. Create a brand new market opportunity and capture the space by being a first mover with your brand. If managed well (after considering brand relevance and positioning), it will definitely rejuvenate your existing category and help you discover your very own “blue ocean”.

CASE IN POINT -  White Coffee – Old Town vs. Nescafe

Before the term White coffee was known in the market place, pre-packed coffee came with variation in sweetness, richness (intensity of caffeine) and creaminess. Then, a new entry made its presence into the market - Old Town White Coffee.

Old Town was a brand that was then, synonymously, associated to Ipoh, a town with great mining history in Malaysia. This is the Brand Story for Old Town. It has claimed that making white coffee involves a traditional process which they have mastered that was established many years ago. It portrayed that it had an authentic approach to roasting coffee to product its unique taste. As such, it somehow created a strong linkage to tradition and authenticity. The taste and preference for Old Town white coffee gain rapid popularity and many other brands introduced their version of White Coffee. However, the unique thing about white coffee (apart from its unique taste) is the emotional appeal that comes with the consumption of it – the feeling of nostalgia and the appreciation of heritage that goes along with its consumption. Many brands who introduced their version of white coffee missed this point! They introduced a product rather than a brand. They introduced a product that is only linked with its functional appeal – that is the taste and packaging. They missed out on the most important ingredient in white coffee, which is its nostalgic appeal.

This is where I think Nescafe did their homework right. Nescafe by itself is a contemporary brand – not one that is linked to heritage and nostalgia. In order to capture a piece of the market for white coffee, they need to infuse the element of nostalgic appeal to their product. They introduced their version of white coffee by naming it “Ipoh White Coffee”. Given that “Ipoh” is a town that is strongly associated to the origins of white coffee - thanks to the marketing communications by Old Town, Nescafe is able to invoke the nostalgic appeal of their new brand line extension. Thus, with its established channel and marketing muscle in place, I can see that they are gaining traction.

Dr Lau Kong Cheen is a Branding Authority and Branding Consultant. I believe that what he writes about branding also relates to our personal leadership. How do we position ourselves, and what are our distinctive styles and approaches, are major considerations when we establish our leadership presence. Even legacy has its branding. Our brand is a summation of our personality, identity, character, and actions. We are who we are, reinforced by what we do, and what we have done. Therefore, keep building your brand, wherever you are.


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