To Build or Not to Build: Why many businesses remain stuck in the commodity trap

Disclaimer: Any mention of companies in this article is based solely on personal experience. Others may have different experiences or interactions.

How important is building a brand versus simply selling a product? If you posed this question to businesses—legacy companies, new-age enterprises, or upcoming startups—the answer would be a unanimous one: “Very important.” However, if I were to conduct a qualitative analysis of the different communications bombarded at me throughout the day, I might beg to differ. Perhaps, just perhaps, the importance of brand building is misunderstood when it comes to communication.

Let me take a step back and explore how brands can be built today and the role communication plays in that process. A few years ago, an industry veteran told me that there are only two things that matter when building a brand: Consistency and Longevity. Under these heads, you can group Product, Placement, Promotion, and Price. But all of these ultimately fall under one overarching category—Experience. More specifically, Customer Experience.

If a business misses any of these Ps in the customer’s buying journey, it leaves the customer with a bad taste in their mouth—an impediment to building a brand. A great promotion with a poor product, or a great product and placement with poor promotion, or any combination that has a missing link, leads to a negative customer experience.

Returning to my original question, looking at the flood of communications I receive each day, are these businesses selling commodities or building brands? What happens if they focus only on selling commodities? What challenges arise for businesses in such a scenario?

Take, for example, a company ‘Brand A’. Over the years, I’ve seen their ads. I know they sell milk, coconuts, mangoes, and various fruits and vegetables. They claim their milk has the best cream for making ghee, and their tender coconuts have the most water. Olympians and minor celebrities have endorsed these products. I even bought from Brand A for a couple of weeks. Yet, as a consumer, I still don’t know what the brand stands for.

If tomorrow another company came along with better sourcing, a superior app, and more competitive pricing, I—and likely many others—would switch without hesitation. The issue is that Brand A has yet to create an emotional connection with its customers. In other words, I don’t feel bound to the brand. At this stage, Brand A feels more like a commodity trading company than a brand, and it should use the coming years to build a moat around its identity as a brand. The same logic applies to many other sectors—dental hygiene, perfumes and fragrances, logistics, fashion, lifestyle, consumer electronics, and beyond.

As a founder myself, I understand why many companies go down this route. Product- and price-focused communication gets the business off the ground quickly. It provides the much-needed growth curve when external investors are involved and keeps the business afloat. Product-focused content on digital platforms allows for measurable ROI, helps control Customer Acquisition Cost (CAC), and so on. On the other hand, brand building is like a long-term capital expenditure (CAPEX) that takes years to show results. The ROI in brand building is often intangible—it might help in a crisis, fuel exponential growth, or lead to brand advocacy—results that are less measurable than digital ROI.

It’s worth noting that some companies manage to strike a balance between both. They maintain always-on campaigns for products, innovations, features, and pricing while ensuring periodic, brand-led communication. The idea is that brand communication provides a cover for one to two quarters, while product/performance communication ensures steady business growth. Companies like Apple, Amazon, Myntra, and Samsung excel at balancing both worlds effectively.

If building a brand is the moat, what change in perspective can help businesses pivot? The answer lies in thinking long-term rather than short-term. Securing buy-in from key internal stakeholders—employees, heads of departments, investors, and shareholders—is crucial. A business aiming for acquisition may not need to think about brand-building, but for those looking to create a company that lasts a lifetime or plans to go public, it’s essential.

When you think long-term, you’re more likely to craft core communication that endures for years, maintain consistency in messaging, and focus on building trust and credibility, rather than just emphasizing price, features, or offers. You’ll also need to think about partnering with others who can join you on this journey to create consistent communication over time.

In today’s world, the relationship between businesses and their partners is often transactional, leading to communication that is also transactional or tactical, missing out on the opportunity to build a brand. Perhaps that’s the solution after all.

Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of exchange4media.com.