What is the difference between brand and commodity?

Updated: Dec 5, 2018

In a recent YouTube video, Seth Godin said that the difference between brand and commodity is that people have expectations from a brand but not from a commodity.

This is a great way to understand the intangible thing we call brand. People expect a Victoria's Secret shop to be sexy, feminine and "seductive", but they have no expectations from a regular lingerie store.

When the expectations are met or exceeded the brand gets more positive sentiment, the customer's loyalty to the brand grows, which leads to higher brand equity.

Understanding customer expectations is very important for business success. Richard Branson says you need to set reasonable expectations and then exceed them. But it's not so easy knowing what the customer expectations are.

In my speaking engagements I talk about expectations and the brand's "why". Two highly important concepts in branding that are usually hard to understand. "Why" is such a strong word in marketing and commerce. In the current world we live in, when there is so much of the same, when pretty much anyone can have the latest tech gadget and feel important even if they still in highschool, the word "why" is more important than ever. If in the past consumers bought because they needed a product, now consumers buy because they want to have it.

This goes back to the difference between a brand and a commodity. Think about it this way: an apple is a commodity, you can buy an apple anywhere, at the mom & pop's shop on the corner, at Vons, Ralph's and so on. You decide to buy an apple based on price. Apple, on the other hand is a brand. You decide to buy an Apple device not based on price, but despite the price. Think why is that...

People have expectations from an Apple device, and the most important expectations are how it makes them feel, or how it will make others see them.

What is the best way to know your customers expectations? ask them.

Ask them why they buy or use your service. Call customers, email them a survey, choose whatever way you want, and ask questions such as Why do you buy this product? How does it make you feel? Why do you use this brand's service and not the competition's?

The more questions and customers you'll ask, the more knowledge you'll get. The deeper you'll dig, the deeper and more important feelings for "why" will surface.

Now that you know why they buy and what are their expectations from your brand, you know how you can answer their needs, you know how to meet expectations and better yet, exceed them. With this information in hand you can target your marketing efforts much better and maximize your marketing budget.

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