They said, to fully understand the implications of branding it is first important for those in the industry to fully grasp and understand the concept of what a brand is and what it truly means.
A brand is a combination of a name, words, symbol, or design that identifies a commodity and differentiates it from the competition. It serves as a way for consumers to quickly and easily identify one product from another and associate them with the quality attributes related to the aggregate brand name.
In general, it is widely accepted as fact, that the number one brand in a market can maintain a 10% price premium over the number two brand, and as much as a 40% premium price over a more generic brand.
Additionally, studies have shown that customers who are loyal to specific brands spend three to four times as much money on agriculture and food items than do customers who purchase items based on lowest price.
Fundamentally, however, it is crucially important that consumers have a positive experience with the product, so that they will associate the name or brand with a high-quality, satisfying product.
An association with poor or inconsistent quality can lead to the need for discounted prices and herein lies the problem with Vietnam agriculture commodities.
In short, branding a product adds value by differentiating the product, making it stand out from the other items on the market, and by conveying additional information to the consumer about the attributes of the product beyond appearance.
Poor Farmer Awareness
The fundamental problem facing Vietnam commodities is that the average holding is way too small for any individual farmer to make efforts towards branding and as such they are left being lumped in the ‘national brand’ image of Vietnam.
Vietnam agriculture as a ‘national brand’ is by and large either not recognizable by consumers around the globe, or if it is, suffers from a negative brand image of being of low quality most likely suffering from safety food issues related to excessive pesticide or other chemical abuse.
Only a relatively few products, such as Vinamilk dairy products, have been able to break away from the negative ‘national brand’ and distinguish itself as being of premium quality through effective branding.
It is more than fair to say that the farming community in Vietnam in general is still caught up on efforts to sell and does not have a sufficient awareness nor understanding of the relative merit of branding.
The Way Ahead
It is only a matter of time before the challenges are overcome. What are the ways to overcome this branding conundrum?
‘Cheap & best’ possibly only exists in the Vietnamese lexicon. The word needs to get out to the average smallholder farmer that both cannot coexist.
Vietnam agriculture needs to harness and take control of its own brand image by highlighting the superior quality of the ‘national brand’ and put it to work generating higher revenue and earnings in the highly competitive marketplace of today’s globalized world.