Branding: The Competitive Edge in a "Flattening World"

By Ed Delia, Delia Associates

If you own or work for a packaging business, you know only too well what author Thomas Friedman is talking about in his book entitled The World is Flat. You know the competitive landscape no longer has a horizon. You can no longer enjoy the "friendly competition" of similar-sized or like-minded firms competing with you regionally or nationally.

In fact, many packaging companies dominated domestic markets simply because global competitors couldn't get here. But technology has hit full stride. While five years ago, global competition may have seemed like a nagging fly that wouldn't go away, today, it's a reality.

With global connectivity a part of everyday life, and online collaboration taking hold, even the smallest company or individual can compete for business virtually anywhere in the world. And we will continue to see global competitors delivering high-quality, low-cost products to our front door, and we will see more services being sent offshore.

In his article titled "Globalization and the Death of the Mid-sized Company," Leamon A. Crooms III cites the "Cold Hard Facts":

Cold Hard Fact #1 - Global competitors play by different rules set in their own geographical regions. So not only do many of them have lower labor costs, but they also have fewer government controls, giving them an additional cost advantage.

Cold Hard Fact #2 - In the future you will have less time to react to your competitors. Geographic distribution makes it harder to keep your eye on the global competitor. If they are test marketing a new product, then you may never know until it shows up in your back yard.

Cold Hard Fact #3 - They know more about you than you know about them. Generally, American mid- size businesses are far less familiar with international markets and cultures than international mid-size companies are with the US.

Cold Hard Fact #4 - Global competition will turn up the heat domestically. As domestic companies in the mid-market adapt to global competitors the domestic companies will become increasingly more competitive in their local markets.

So what do you do to protect your turf and keep your product line from becoming commoditized?
My experience has been that companies simply have to change their value propositions. They have to redefine what they stand for and how they deliver unique value. In short, they have to reinvent their brands. Even single practitioners stand to gain or lose, depending on whether they embrace or turn their backs on the "flattening" of our world. By thinking globally about your business and about your brand you can do more than survive globalization. You can thrive in it.

Here's what's been working for our clients.

Stand for one thing. Stand for one thing, make it unique, make it simple, and you make it easier not only for regional prospects to find you, but global ones as well. If you're struggling to define your unique value on a regional, national or industry-specific basis, how can you possibly do so globally?

Shift from order-taker to solutions provider. Packaging companies can no longer sit back and expect the phone to ring with the next order. Build your brand around solutions, taking a proactive stance. Don't wait for the market to drive you. Effectively competing on the global stage means you drive the market.

Expand your view to one that is global. When you embrace globalization, you quickly realize that it's less of a threat and more of an opportunity. Think of your business brand not in terms of what the region or industry might think of you, but what you want the WORLD to think of you. Start looking at overseas competition. See what they're doing from a marketing standpoint. Learn and watch them, because they are certainly watching you.

Competition is competition. It doesn't matter if it's down the street or on another continent. Size up your overseas competition in the same manner you would size up your domestic competition. Remember, don't just look at what they're doing wrong. Look at what they're doing right. Only then can you put your brand in a position to best them.

With challenge and adversity comes opportunity. Embrace globalization instead of hiding or dismissing it, and you may do more than flourish. You may take a leadership position in this new competitive environment.

What Purchasing Agents Are Learning These Days
And How to Position Yourself (and Your Brand) Accordingly

By Ed Delia, Delia Associates

Whether you sell to purchasing agents or directly to top executives, this article will shed some light on the buyer’s side of the fence, and how you can position your brand to defend against the most stringent negotiators.

I confess. Before I set out to write this article, I was guilty of buying in to the same stereotype that many sales and marketing people have of purchasing agents: they are heartless, evil people, placed on this world to make the lives of sellers an absolute hell.

I was wrong. As I started to peel away the commonly held misconceptions, I realized that the purchasing agents are not bad people. They’re simply serving a different function than sales and marketing. The exact opposite function.

What is the role of the purchasing agent? To increase a company’s profitability through efficient and effective purchasing of goods and services. To get the best possible products and services at the best possible price. After all, there are two ways to increase profits in business. One is to make more money. The other is to spend less.
So have a little respect. Any good purchasing agent will smell out a professional seller that comes to the table with pre-conceived disdain for his or her role as a professional buyer. And they will exercise their power. They will make you sweat. Because a good purchasing agent is well trained. And shame on you for coming to the table with the wrong mindset in the first place.

At the suggestion of Dan Shanok, a good friend and sales consultant, I took a close look at not just the role of purchasing agents, but at what they are reading and studying these days. After some reflection, it should come to no surprise that the most commonly emphasized subject in the modern purchasing agent’s curriculum is the time honored function of any business transaction… negotiating.

Here’s a telling excerpt from “Hold on to these Negotiation Truths” by Joe Auer:

“Never tell a vendor:
How much you’re willing to spend or what your budget is
It’s a strategic partner
You have a deadline for the project
You love its product
Your profit margins
Who its competitors are
Who won the bid
It’s the only vendor being considered, even if it is.
You need its product
The bids you received from other vendors.
That you prefer its product over competitors’ products
Anything that could give it leverage during the final decision-making process.
Exactly how much you plan to buy
You’re new to negotiations.
Its price is reasonable
It has “locked in your business” even after the deal is signed.”

If you’re the seller, you’re looking to win the project or contract at a profitable margin. The buyer is looking for the best quality at the best price. They don’t necessarily want you to work at low or no margin pricing. They are just doing their job, which is to negotiate a good deal.

I often hear marketing and sales professionals in the packaging business complain about the lack of “creativity” among purchasing agents. News Flash: They are not creative people, nor are they functioning in a particularly creative role. They are not just like you, nor do they necessarily see the business world through your eyes. They are expert negotiators, and should be treated as such.

It is often in the negotiation phases of a business deal that many novice sellers run into trouble. They start thinking, “Maybe I can do it for that price if we cut corners somewhere. Maybe I’ll give ground on this sale and make up for it in volume. That’s a very dangerous game. It’s better to get creative with your brand than to get too creative with your deliverable. Because your Brand is Your Armor. It is the intangible that the purchasing agent can’t factor in to his or her analytical process of vendor comparison.

At the end of the day, the buyer is trying to make a decision, trying to fit you into the grid of compatible suppliers in an attempt to compare apples to apples. This is hard to do if your brand looks more like an orange. Because an orange sitting prominently atop a barrel of apples simply doesn’t quite fit.

“But, that will put us out of the running,” you may be inclined to say. “We’ll lose out on the opportunity altogether if we don’t play by their rules.” I would argue that this may be the case, but only on the rarest of occasions. The goal of branding is to position your product, service or firm as the undisputed stand out. To represent a unique option to the buyer, one that the competition can’t possibly touch. It is your X factor. Because once that X factor is on the table, how does the buyer know if he or she is missing out on a chance to work with a remarkable provider that offers tremendous value?

By positioning your brand as the lone wolf instead of another member of the pack, you may very well give the buyer a moment of pause, or clarity. It is in that moment that a purchasing decision maker will see you for all that you are that is uniquely special, and all that the two of you might do together that’s equally special. The lone wolf commands immediate attention and respect. The lone wolf cannot be categorized, or duplicated, or compared. And while I’ve never encountered a lone wolf up close in the wilderness, I can only imagine that it would be a tough negotiation.

George Ross, one of Donald Trump’s key executives, once said: “Never negotiate a deal on a cell phone.” Why? Because when a buyer is in negotiation mode, their strongest resource is data. Spreadsheets and comparative studies, historical pricing, industry standards and any other information that can be used as leverage. It’s hard to sift through data when you’re doing 75 mph down the Parkway, talking on a cell phone, and already five minutes late to your destination.

As the seller, you too must come up with your own arsenal. But instead of being limited only to data, you can use brand power to emphasize value. And there are many ways to demonstrate brand value:
Critical value. If you needed life-saving surgery, and there wasn’t a moment to spare, would you ask for a second opinion?

Remarkable value. If you had a chance to gain a true advantage over the industry leaders, would you wait for the competition to make the first move?

Pioneering value. If you could be the first to market with a new product or service, and gain all the accolades that come with being the original, would you hold off?

Revenue-generating value. If you realized an opportunity to increase profit margins 10% by acting today, would you wait a few months to decide?

When a buyer tries to paint you red like the other apples, it’s your job to effectively explain how you are different – different in a way that has undisputed value. So have some respect for the role of the negotiator on the other side of the table. Play your brand card for all its worth. And play to win. Good luck!

Moving Up the Perception Pyramid in Today’s Packaging Business

By Ed Delia, president of Delia Associates

You don’t have to be a lifelong student of the packaging industry to know that suppliers of products and services fall into definite categories in the minds of today’s buyers. Based on perception more than reality, buyers see each industry supplier differently. Each has a role in the buyer’s mind, and each is seen at a different level in terms of perceived value.

From a marketing point of view, the big question is how to change those perceptions and climb from one level to the next within the industry. But before that question can be addressed, someone has to tackle the task of defining each supplier level.

So from bottom to top, here’s how I see the “Packaging Pyramid.” Of course, everyone attempting this breakdown would end up with a slightly different number of categories, and would assign certain common attributes to players in more than one category. But more or less, most of my colleagues in the packaging industry believe I’ve structured the pyramid accurately: from “Commodity Supplier” at the low end to “Strategic Partner” at the pinnacle.

Commodity Supplier: A commodity supplier is one that can readily source a certain type of packaging container or component, based on a customer-driven request. They’re all about price and efficiency, and wait on the demands of the marketplace to strike. To put it simply, a commodity supplier can get you what you want, when you want it, and at really good pricing. Buyers that seek out commodity suppliers are usually looking for a “deal.” They’re after a relatively generic packaging solution, at the best possible price. While quality is somewhat important, as long as the containers and components are not severely dysfunctional, they are considered acceptable.

Trusted Supplier:

A trusted supplier is one that has built something of a reputation for consistently meeting commitments. This supplier lives up to its promise, and does what it says it is going to do -- maintaining a consistently high standard of quality. This supplier is the one buyers turn to in a pinch, because they trust the supplier to “deliver the goods.”

Valued Supplier: A valued supplier is one that provides packaging that has direct relevance to the success of the buyer’s brand. Buyers perceive the valued supplier as bringing a little something extra to the table that will help establish a true competitive edge in the mind of the consumer. This supplier is often valued for a clear understanding of each buyer’s brand attributes, and has a sense of selling through to the end-user. This being the case, a valued supplier will stay on top of potential opportunities in the marketplace and be more proactive and vocal about product improvements.

Preferred Supplier: A preferred supplier is one that lives and breathes continuous improvement. This supplier is always looking for ways to enhance product design and performance. From an operations standpoint, this supplier is directly linked to the everyday business of each buyer. Preferred suppliers are the clear top choice for a packaging component or container, or in many cases, multiple product lines. There is a demonstrated excellence in operations, design, manufacturing and a depth of resources capable of providing technical support and troubleshooting serious problems.

Innovative Supplier: An innovative supplier is idea driven, actually playing a hand in driving the demands of the market. There is a continuous flow of new thinking that has direct relevance to both the needs of their buyers and to the end consumer. This supplier not only has the big idea approach to the business, but the resources and know-how required to take a big idea into commercial production. This leads to the perception of being a source of knowledge, as well as a quality supplier of product.

Partner: A partner is a supplier that has earned the trust of buyers to the point where there is an open sharing of information. This supplier becomes a co-creator, combining its R&D team with the buyer’s, and becoming a vital link in the buyer’s supply chain. This supplier is not at all considered an outside vendor, but rather an integral part of the buyer’s team. The lines between supplier and buyer are completely blurred. This supplier is not the clear choice of the buyer, but the one and only choice for a certain type, or types, of packaging.

Strategic Partner: The term “strategic partner” is overused and under-delivered in this industry, and in many others. True strategic partners are truly a rarity. In fact, there are only a handful that meet the following criteria. A strategic partner is a supplier that actually joint-ventures on concepts with buyers. There is a complete sharing of resources that extends beyond conceptual development. There is, in fact, sharing in the success or failure of the consumer product. Although rare now, this type of supplier may emerge at the top of the pyramid more often in the future. This is because buyers are turning to their supply chain partner for greater assistance in meeting consumer demands.

How to move up the pyramid?

If you are a packaging industry supplier, no matter what your position on this or any other pyramid defining perceived performance, maintaining the status quo is not a real option. Move up the pyramid and prosper. Stay put and be blown away by the next wave of competitors that are already nipping at your heals. All talk of perception aside, the reality of our world is that to simply keep your position within the industry, you have to adapt to changes and make improvements.

But most industry suppliers aspire to more than survival, and most want to move to the next level. Many of them, however, believe that they are so permanently type cast, that it will cost a fortune to advance. I say, “not so.”

Consider the size of the packaging industry. The fact that it is relatively small is both good and bad. It’s bad because there seems to be a bit of “everybody knows us” syndrome going around. It’s good because it doesn’t take as much effort to change what they know you for. It’s just a perception shift, and it can be accomplished in three easy steps.

Moving Up the Pyramid

Step 1 - Communicate
The first step in working your way up the perception pyramid is to communicate your intention to become more of a resource. State what you are going to do, what your new capacity is going to be, what new services you now offer.

Step 2 – Keep your promise
The next is to make it real. Simply live up to your promises.

Step 3 – Reinforce it
The final step is to leverage the new reality of your company’s performance capability into a new perception of your company’s place within the industry. Now that you’ve shown that you can meet your commitments at a higher level, makes sure “everybody” knows it.

Of course, the process requires certain investments. But this is a highly competitive business. To stay in the game, you have to adopt an advance-or-die attitude. You have to invest in process improvements. You have to invest in top talent that has already helped other companies get where you want to be. And, most important, you have to make certain the world of packaging knows about it.

None of this requires a massive investment. It requires the desire to change perceptions and a willingness to carefully invest in affecting those changes, one step at a time.

About the Author:

Ed Delia is president of Delia Associates, a Whitehouse, NJ-based marketing firm that helps packaging companies develop and deliver a unique brand identity to achieve market leadership. The company was founded by Michael A. Delia in 1964. Ed Delia was named president in 1997. The company has serviced numerous packaging firms in its 40+ year history, in virtually every category of the business. Ed Delia is also the author of Brand Matters, a monthly e-newsletter featuring current commentary on brand-related topics. He is a frequent speaker on the subject, and has delivered numerous talks on branding, creative thinking, and technology-based marketing communications.

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