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Use of Branding Strategies in Agribusiness
Commodities: A Literature Review Work and
Research Propositions
Ricardo Osorio de Oliveirai
Eduardo Eugênio Spersii
i
ESPM, Masters student in the Masters Program in International Management,
ricardo@quironcomunicacao.com.br , Contact author.
Tel/ Fax: 55 11 3722 6448
Rua Américo Boaventura, 63, São Paulo – SP, CEP 02020-070.
ii
ESPM, Professor in the Masters Program in International Management,
espers@espm.br ,
Tel/ Fax: 55 11 5085 4500
Rua Álvaro Alvim, 123, São Paulo – SP, CEP 04018-010.
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Use of Branding Strategies in Agribusiness Commodities: A Literature
Review Work and Research Propositions
ABSTRACT
Concerns about consumer oriented production systems have become important in the
agribusiness sector (HANF, KUHL, 2005). A change regarding the need for differentiation
has occurred in the perception of companies, producers, distribution channels and other
players involved in the production of agribusiness commodities. There is a discussion on how
to achieve it. The use of branding strategies (understood as the processes involved in creating
and promoting strong brands) is a way to obtain differentiation. The creation and promotion
of strong brands for Brazilian agribusiness commodities is an important aspect for the
strategies of Brazilian multinational companies entering the global market.
is an important aspect for the first Brazilian multinational companies strategies. This paper
intends to suggest propositions regarding the use of branding strategies in agribusiness
commodities such as: Branding Alliance or Co-branding, Branding Ecosystem and Ingredient
Branding. Based on a literature review the article suggests some possible uses of these
strategies within the realm of Brazilian agribusiness. Finally, some future research
propositions are presented.
Key-Words: Branding strategies, Agribusiness Commodities, Branding Ecosystems,
Branding Alliances, Agribusiness.
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Use of Branding Strategies in Agribusiness Commodities: A Literature
Review Work and Research Propositions
EXECUTIVE SUMMARY
The concerning about using consumer-oriented production systems has been a constant in
many areas of economic activity. Some authors point such orientation as a potential
competitive advantage and a major force in shaping organizations marketing activities
(HANF; KÜHL, 2005).
Even segments like agribusiness, which historically did not valued the search for
differentiation, are now in the process of developing strategies aimed at achieving a
prominent position in consumer preference. By introducing or highlighting attributes
desirable to consumers, a higher fidelity can be created, thus facilitating the entry of the
company and its products in niche markets that are both more profitable and more attractive
(SAES; SPERS, 2006). The use o branding strategies is emerging as a response to this
challenge.
The objective of this work is to introduce the main branding strategies that may be used in
agricultural commodities, and by reviewing the available literature on the subject, present
critically what has been researched on the subject. It is also intend to suggest some possible
uses of these strategies within the reality of Brazilian agribusiness, and present some
examples of such strategies that were already implemented. Topics for future research are
suggested as well. Finally, some research propositions are presented.
The following branding strategies are reviewed in this paper: Branding Alliance or Cobranding, Branding Ecosystem and Ingredient Branding. After this initial conceptual revision,
some considerations about the use of such strategies in the reality of Agro Industrial Systems
(AIS‟s) are presented. Special attention is paid to the issue of brand knowledge and trust as
branding strategy in AISs.
The research propositions presented are:
RP 1: Vertical coordination, when present in Brazilian AFSs, act as stimulating factor
for the implementation of branding strategies.
RP 2: Attributes of confidence, when actually perceived by consumers, encourage the
implementation of branding strategies.
RP 3: The concept of Brand Ecosystems can be used in the realm Brazilian Agribusiness
commodities, using both product, national, ingredients, production processes and
certification brands.
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INTRODUCTION
The concerning about using consumer-oriented production systems has been a constant in
many areas of economic activity (JAWORSKI; KOLI, 1993). Some authors point such
orientation as a potential competitive advantage and a major force in shaping organizations
marketing activities (HANF; KÜHL, 2005).
Even segments like the ones producing agribusiness commodities, which historically did not
had many incentives to pursue the search for differentiation, may develop branding strategies,
which could, potentially, grant a prominent position in consumer preference. According to
Saes and Spers (2006) differentiation could be understood as a strategy used by organizations
to achieve the leadership in their respective fields of actuation, and involves the adding of a
quality attribute to their services or goods. By introducing or highlighting attributes desirable
to consumers, a higher fidelity can be created, thus facilitating the entry of the company and
its products in niche markets that are both more profitable and more attractive (SAES;
SPERS, 2006). The use o branding strategies is emerging as a response to this challenge.
And this search for differentiation becomes more important as we are facing a situation of steadily
rising of international prices for agricultural commodities. United Nations reports a continuous
uptrend in the prices of these goods since the middle of the first decade of the nineteenth
century, and point to a continuing scenario of rising prices (United Nations, 2008). Brazil can be
considered a major player in the international market of this type of product, occupying a
prominent position in the global ranking of producer countries. According to an outlook of the
Organisation for Economic Co-operation and Development (OECD), the nations known as
'developing countries' (including Brazil) should lead to both consumption and production of most
agricultural commodities by the year 2017 (OECD, 2008).
To the Brazilian agribusiness sector, due to this scenario of a potential greater appreciation of
commodities is changing the perception of companies, producers, distribution channels and other
players involved in the production of agricultural commodities, regarding the need to search for
differentiation. In such environment, branding strategies emerge as a plausible response to this
need, and are acquiring greater importance given the recent process of internationalization of
Brazilian agribusiness sector. As an example of branding initiatives for Brazilian agricultural
commodities, one can quote the large Brazilian agribusiness groups, such as Sadia, Perdigão and
Aurora, who were able to build strong brands for products originally classified as commodities.
Another good example is the label proposed by the Association of Swine Breeders of São Paulo
State (APCS), which assures the environmental, social and intrinsic quality of the Pork produced
according to the label standards.
The creation and promotion of brands for the domestic agricultural commodities can be
understood as an important step in the process of emergence of the first Brazilian multinational
companies. The above mentioned companies Sadia and Perdigao merged recently, and are now
one of the largest global players in the food sector, strengthening the Brazilian position as a power
in agribusiness (BR FOODS, 2011). As result of this merge, BRF Foods Brazil is the fourth
largest exporter in Brazil, world's largest exporter of poultry and largest company (in market
value) in the global market of animal protein, and is also one of the leading Brazilian companies
in the milk business. BR Foods is a global corporation that offers its products in more than 110
countries (BR FOODS, 2011), and that possesses valuable brands that are an important part of the
company assets.
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Build strong brands would be a logical next step for Brazilian agribusiness. It could be a useful
way to escape standard market prices for commodities, creating value, providing income for all
links involved in the production chain. And in this new international realm of consumers seeking
for quality, origin certification, confidence attributes, and for more „organic‟ and „green‟
production standards, there are huge possibilities for creation of Brazilian brands that meet this
kind of demand. Brazilian geographical location, its natural resources, and technical expertise in
the production of agribusiness commodities, allows the country to adopt production methods that
copes with environmental and social responsibility issues, opening an opportunity for adding and
creating competitive value to many domestic products (SAES; Spers, 2006; SAES; Spers;
SOUZA, 2004 ).
Branding, understood as the process of creating and nurturing brands, have been gaining
importance over the past decades in the food industry (KAUFMAN, HANDY, MCLAUGHLIN,
PARK, GREEN'S, 2000). The use of branding strategies can be reflected in market value of food
products brands. In recent years several food brands went into the list of 100 most valuable global
brands (INTERBRAND, 2010). In a market where the offering similar products is a reality,
consumer can find difficulties to select the best possible deal. Known and trustworthy brands may
act as an element of competitive advantage for organizations, and a valuable tool in the process of
decision making. By identifying known brands and reliable products, with which he identifies
himself, the consumer shall be able to find the best purchase (HANF; KUHL, 2005).
The aim of this paper is to present the main branding strategies that may be used in agricultural
commodities, and by reviewing the available literature on the subject, to present what has been
researched on this field in order to make the reader aware of research prospects currently in
vogue. We also intend to suggest some possible uses of these strategies within the reality of
Brazilian agribusiness, as suggestions of topics for future research. Finally, some research
propositions are presented
The article is divided into four sections. In the first section we introduce some concepts of
branding, namely: Branding Alliance or Co-Branding, Branding Ecosystem and Ingredient
Branding. The second section is a discussion on the use of these strategies in the context of
agricultural commodities, in the third part, a brief discussion on possible uses of these same
strategies within the reality of Brazilian agribusiness, with the presentation of three research
propositions, and then the final considerations
LITERATURE REVIEW
BRANDING CONCEPTS
According to Beierlein and Woolverton (1991) brands are signs of information about a
product, a product group, or a company, that distinguishes the product or the company from
its competitors. Branding can be understood as a set of strategies and marketing activities
involved in creating and managing brands in the market. The benefits of branding include
increased market segmentation, increased customer loyalty, increased repurchase probability,
facilitation of new products introduction and improves the company's marketing image
(BEIERLEIN; WOOLVERTON, 1991).
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Brand is the most valuable intangible asset of a company, and serves as a powerful
differentiator for the business and as a tool for decision making for the consumer. Branding
initiatives confer individuality and differentiate one brand from the others, helping to enable
consumers to recognize in a particular brand, promises kept. Such actions serve to build
loyalty through trust, and result in continued demand and profitability (REICHHELD, 2001,
2006).
The concept „brand‟ covers a multitude of brand values. If brands served initially only to
differentiate a product from its competitors (considering that the first brands were developed
by industrial companies for over a century ago as a way of minimizing the control of sales of
their products by retailers (BIEL, 1992)), they started to act today as an important factor in
helping the consumer to make a purchase decision. Keller (2006) states that for consumers,
brands can simplify choices, promise a particular level of quality, reduce the risks associated
with buying and / or provide confidence about the product in question
Different approaches can be used to build a brand. Branding strategies may involve, for
example, the conjunction of two distinct brands in one product, the creation and / or use of a
set of brands in a product or production process (eg in the case of organic products or
designation of origin) or the addition of ingredients that have well established trademarks.
As an example of the use of branding strategies in agribusiness, we may mention the stamp
'Pampa Gaúcho', created by a nonprofit organization that brings together producers, industry,
retail and other agents of the productive chain of beef cattle. This organization has as its main
goal the preservation and protection of geographical indication of meat, leather and its
derivatives, produced in the southern region of Brazil known as „Pampa Gaúcho da
Campanha Meridional‟ (APROPAMPA, 2011).
These types of approaches will be particularly useful for a discussion on how and when to use
these strategies in the context of Brazilian agribusiness, and will therefore be briefly presented
below.
Branding Alliance or Co-Branding
The alliance between brands or Brand Alliance or Co-Branding, where two brands are
brought together in marketing actions aimed at selling a single product or service, may be
considered a trend (McCARTHY; NORRIS, 1999). According to Simonin and Ruth (1998)
this approach seeks to “cooperation between two or more marketable items that in one way or
another connect representations of several brands in the marketplace”. These authors say their
results show that the attitudes of consumers toward a particular product or an alliance of
brands, influences both their attitudes toward the product resulting from the alliance of
brands, but also for each one of these brands in particular. In the same way, Hultman (2002)
states that “Co-branding in its purest form has at its core the exchange of values or attributes
(on a reputational level) between brands, to create a new reality whereby both brands are
perceived to be better as a result of the initiative”
According to McCarthy and Norris (1999), studies have shown that an alliance between two
or more brands may induce a drastic shift in consumers' perceptions of quality, price, taste,
performance and on the possibility of purchase and repurchase.
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As an example of Brand Alliance in the Brazilian agribusiness, we have the naturally colored
cotton, developed by the Brazilian Agricultural Research Corporation (EMBRAPA).
According to Carvalho (2005), the genetic improvement works carried out by EMBRAPA
since the beginning of the 90‟s selected cultivars of colored cotton, as the BRS 200, that gas
light brown coloration. The demand for clothing made from this type of cotton is primarily by
people allergic to dyes and for use by infants, but the environmental appeal of this type of
product also plays a role. The colored cotton is environmentally friendly because it eliminates
the stages of preparation for industrial dyeing, which processes uses chemicals that, if
misused, can cause damage to health and to the environment. By waiving these stages, this
cotton also helps to reduce the costs for the industry with the acquisition of cloth, and reduces
the spending on water and energy and the amount of effluent to be treated as well. The dyes
used in dyeing fabrics are harmful and often carcinogenic. The dyeing process is highly
polluting because it generates waste with high concentrations of salts, kelp, among other
substances, and the bleaching process generates residues with humectants, salts, caustic soda,
peroxide and neutralizers. In a regular industry, despite the treatment of effluents, about 15%
of waste is released and can pollute the ecosystem. EMBRAPA develops projects with
companies interested in using Brand Alliance strategies that combine commercial trademark
products with EMBRAPA brand. Usually the products are licensed to use the words 'product
developed with EMBRAPA technology‟ on their commercial labels and packages.
Brand Ecosystem
A very useful concept to the reality of agribusiness is idea of Brand Ecosystem (PINAR;
TRAPP, 2008). Since that for the majority of agricultural commodities are produced by
complexes Agroindustrial Systems (AISs), to build trust attributes is a simultaneously
challenge to the various links constituents of AISs, and therefore demand the deployment of a
system of vertical control of the process (HANF; KUHL, 2005). Brand Ecosystem
encompasses all activities during all stages of a product value chain, from the original supplier
to final consumer - considering the concept of value chain proposed by Porter (1985).
This ecosystem of brands, consisting of all the brands involved in the process, would
help to build a strong final brand, which could be then able to provide the desired competitive
marketing advantage. This view strengthens the need to establish systems of vertical
integration and coordination for the AISs (HANF; KUHL, 2005), as the conjoint action of
strong brands operating in the subsequent steps of the production chain, can strengthen the
final brand enhancing consumer perception of intangible attributes (such as food safety,
traceability, and other attributes of confidence) related to the product. This view is based on
the holistic concept of marketing framework proposed by Kotler and Keller (2006) which
considers the interactions between all relevant stakeholders (consumers, firms and
employees), and all the activities based on value creation (value exploration, value creation
and provision of value) that are involved in creating, maintaining and renewing the value
perceived by consumers.
A Brand Ecosystem of marks is defined as a set of different activities that contribute to
building a strong brand that encompasses all stages of value creation, from the design of the
initial product conception to the final consume experience by the target consumers, and that
contributes to provide to the brand a competitive advantage (PINAR; TRAPP, 2008). Figure 1
illustrates a generic Brand Ecosystem that highlights the network of actors involved in value
creation, designed as a mean to deliver the value desired by consumers in the short and long
term (PINAR; TRAPP, 2008).
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Figure 1: A generic Brand Ecosystem.
(PINAR; TRAPP, 2008)
When a brand is created to ensure the effective delivery of value promised to consumers, all
the process of brand design must start with consumers themselves: the whole system must be
developed to meet consumer expectations and assure that the brand effectively "deliver" the
desired consumption experience. All activities involved in the system should be geared to
meet these desires and help to reinforce the desired brand image and consumer experience
(PINAR; TRAPP, 2008).
Ingredient Branding
Ingredient Branding is the practice of promoting product awareness through the use of the key
attributes of an ingredient or component with a well known brand product in a second product
(KELLER, 2003; McCARTHY NORRIS, 1999; VAIDYANATHAN, AGGARWAL, 2000).
The basic motivation for using the ingredient branding strategy is to increase host brand
differentiation in relation to its competitors, through the incorporation of the attributes of the
ingredient brand. In this case, an ingredient brand can act as a source of differentiation for the
brand, even when consumers do not understand or realize how this ingredient works (Aaker,
2003), and yet enhance the competitiveness of the host brand.
Opportunities for the use of Ingredient Branding arise every time an ingredient has the ability
to add value, either functional or emotional, to the host brand. To add functional value means
the ability to obtain a perceived better performance of the host brand, which could be
attributed to the well know branded ingredient added to the product. On the other hand,
additional emotional value refers to the ability to give a greater connection of consumers with
the host brand. An ingredient with a brand recognized and valued by consumer can transfer
this positive feeling to the final product and thus contributes to a greater proximity of these
consumers with the final product (PINAR; TRAPP, 2008)
From marketing perspective, to decide whether or not it is appropriate to use the Ingredient
Branding approach, the following questions should be answered: the added ingredient affects
positively (functionally or emotionally) the consumption experience? The ingredient solves
consumer's functional or psychological problems? The ingredient brand will add intangible
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value to the host brand? Consumers will perceive a relative advantage in comparison with
competing products as a result of the addition of the branded ingredient (PINAR; TRAPP,
2008)?
Positive effects of Ingredient Branding strategy have already been observed in different
studies. When a known brand is used to launch a new product, consumers tend to carry their
previous relationship with that brand to this new brand (VAIDYANATHAN, AGGARWAL,
2000). Thus, the transfer of a positive brand value helps to effectively promote the new
product (or even an old product), facilitating the access to distribution channels and allowing
to achieve higher profit margins (McCARTHY; NORRIS, 1999).
From a strategic perspective, Ingredient Branding offers a quality signalization that can both
attract consumer‟s attention, as increase their awareness about the products involved, be they
the host or the ingredient brand. Thus the chances of successful introduction of new products
or line extensions (whether alone or in combination) increases considerably. The probability
of cannibalizing the company's own products are also reduced. (VAIDYANATHAN,
AGGARWAL, 2000). A branded ingredient can be particularly effective in transfering
attributes related to quality.
Examples of Ingredient Branding in agribusiness are the fermented dairy beverages that
advertise the strain and type of microorganisms that enrich the product. Each company has its
patented variety or strain of Lactobacillus spp., and advertise it to the customers with the
status of a company's trademark. The best known example is the Yakult Fermented Milk and
its Lactobacillus casei Shirota.
There is also the possibility of negative effects due to the use of Ingredient Branding
strategies. Cases such as the contamination of Pet Food (ZAMISKA, 2007) and a E. coli
outbreak caused by contaminated Dole brand spinach (ZHANG, 2007) serve as examples of
the negative effects that may be caused by the use of this strategy.
Table 1 presents a summary of the branding concepts mentioned in this article.
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Table 1 – Summary of the branding concepts
Concept
Description
References
Brand
Signs of information
about a product, a group
of products, or a
company, that set them
apart from their
competitors.
(BEIERLEIN;
WOOLVERTON, 1991)
Branding
Set of strategies and
marketing activities
involved in creating and
managing brands in the
market.
(BEIERLEIN;
WOOLVERTON, 1991)
Brand Alliance or CoBranding
Exchange of values and
attributes (in a
reputational level)
between brands, to create
a new reality in which
both brands are perceived
as better as a result of this
initiative.
(HULTMAN, 2002)
Brand Ecosystem
Encompasses all
activities developed
trough all stages of a
product value chain, from
the original supplier to
final consumer.
(PINAR; TRAPP, 2008)
Ingredient Branding
Practice of promoting
product awareness
through the use of the key
attributes of an ingredient
or component known
brand product in a second
product with a different
brand.
(KELLER, 2003;
MCCARTHY; NORRIS,
1999;
VAIDYANATHAN;
AGGARWAL, 2000)
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BRANDING FOR AGRICULTURAL COMMODITIES
As already presented, food products are experiencing an intensive process of Branding.
Empirical observations found that the marketing share of branded food products increased
from 7 to 19% in the U.S. market in the period between 1987 and 1997. Minimally processed
vegetables (salad ingredients, or ready to eat salads) has increased from 1% to 15%
(KAUFMAN, HANDY, MCLAUGHLIN, PARK, GREEN'S, 2000).
This process created some difficulties regarding the establishment of policies for agribusiness
companies. Problems related to brand management are a novelty for these organizations,
which are more accustomed to deal with issues related to supply chain management and food
security concerns, issue than with the dynamics of the food industry and competition inherent
in it (BAKER , BALTZAR; MØLLER, 2006).
Branding strategies gain importance in markets flooded with similar products as happens to
the agricultural commodities. Consumers find difficulty to select the best deal possible.
Known and trustworthy brands can be a valuable tool in decision-making buying process. The
identification of reliable products mediated by well known brands signalize to consumers a
bargain purchase (HANF; KUHL, 2005).
In agribusiness commodities some peculiarities can be perceived. Although consumers of
food, fiber and bioenergy are potentially less sensitive to such connections with brands given
to the high degree of similarity of such products, and therefore the process of establishing
brand identity have to be made within particular parameters, new consumer demands are
transforming this framework. Confidence attributes are becoming more and more important,
and issues that had received little attention so far as origin (products from specific and
certified regions such as cheese, wine, etc.), standards of production (like organic production,
animal welfare, among other factors), traceability and food safety are receiving unprecedented
attention. Episodes such as the outbreaks of mad cow disease, salmonella contaminations and
other diseases related to food consumption, as well as factors related to environmental
concerns, have driven this trend of behavior (TRAUGER, et al., 2010; ALI, et. al. 2010;
SANLIER, et. al. 2010; CANAVARO, et al., 2010;-SOUZA MONTEIRO, et. al. 2010;
MUSA, et. al. 2010 ). In the following section some peculiarities inherent to the use of
branding strategies within the context of agricultural commodities will be discussed.
Branding for Agroindustrial Systems (AISs)
The inherent complexity of AISs, where several actors play fundamental activities that impact
on final product quality, implies in a framework with huge difficulties in the managing
process. The trademark holder assumes huge responsibility before consumers regarding
quality and food safety, but in traditional production processes he possesses little control over
the previous links of the production chain.
Consumers are becoming increasingly concerned with attributes that are based on either
metaphysical qualities (organics, animal welfare, traceability and certification of origin) or in
trust issues (free of health risks and health benefits) (HANF, 2000). Create brands that
effectively deliver consumer's needs are a sine qua non condition for market competitiveness.
The adoption of branding strategies presuppose the implementation of vertical coordination
policies for the hole production chain, in order to ensure the delivery of all brand promises.
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The Supply Chain Networks concept acquires an utmost importance. Hanf and Kühl (2005)
reinforce the need for vertical integration, which must be done in conjunction with a vertical
cooperation. In other words, that means that the all actors involved in the production chain
must be co-partakers of the processes related to quality control and certification, in order to
assure that the promised attributes are actually delivered.
That implies in the development of trust relationships with all actors involved in the
production process. Since the trademark holder is ultimately responsible for food safety and
quality of products offered, he must seek to establish long term relationships between all
partners along the supply chain network, in order to discourage opportunistic behavior that
compromise the quality of the final product (CLARO, ZYLBERSZTAJN, OMTA, 2004).
The concept of Brand Ecosystem is particularly suited to assist in the creation of value within
the structural conditions of the AISs. A fair example is the Tall Grass Beef Company of
Kansas, USA. The brand created by this company has great appeal to consumers concerned
about health issues (BABWIN, 2006).
To ensure a high quality steak for its customers, the company acquired a prized Red Angus (a
breed that is proven capable of producing beef with high softness and low levels of
cholesterol) sire to inseminate all their heifers. All animals are raised on pasture without the
use of hormones or growth promoters, or other chemicals. Therefore, the company is able to
ensure that their meat has low levels of cholesterol, is rich in omega 3 fatty acids and rich in
vitamin E. Consumers demand for this type of healthy meat drove the entire Tall Grass Beef
Company Brand Ecosystem to develop a differentiated brand of steaks - a product that was
usually taken as a commodity.
This example illustrates how one company was able to use a Brand Ecosystem, where all the
processes and ingredients combine to create a brand and a consume experience. The company
used the same awarded sire to inseminate all heifers, created all the animals in an exclusively
grazing diet, in order to maintain a consistent high quality throughout the whole production
process. More than that, all production is sold in high-end restaurants, which are consistent
with the brand image.
All activities along the production chain and in the marketing of the final product were the
ultimate result of a Brand Ecosystem designed to deliver both the desired brand image as the
expected consumption experience. The entire chain of value creation were focused on the on
the brand and into deliver a consumer experience, that combines an exceptional taste with a
healthy meat to a very demanding consumer (PINAR; TRAPP, 2008).
Brand Knowledge and Trust as Branding Strategy in AISs.
Traditionally, agricultural commodities were produced by farmers and then processed into
finished products by the food industry. The traditional emphasis was on quantity produced.
Nevertheless, the food production chain is gaining complexity, what helps to create a
competitive environment. The production orientation has changed from quantity to quality.
And since that quality is now defined in terms of consumer‟s demands, the entire supply chain
network orientation changed in order to ensure food security and deliver ready to use
products.
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After Bovine Spongiform Encephalopathy and Foot-and-Mouth (FMD) outbreaks in Europe,
consumers and governments begin to the demand a greater transparency in all food production
related processes. AISs are under pressure to restructure their production methods in order to
ensure traceability and to cope with the new consumers demands for confidence and food
safety related attributes (HANF; KUHL, 2005).
Thus, food products start to be considered more that plain commodities, but as more complex
goods with intangibles attributes being an important component in consumer‟s value
perception. From the 90's, the discussion about trust attributes became more popular and
began to receive greater attention from researchers (ANDERSEN, 1994). Trust attributes
involves characteristics of products and services that can‟t be detected in ordinary conditions
by the buyer before or after the purchase decision has been taken.
The crises and mistrust about the quality and safety of the products above mentioned,
heightened consumer concerns regarding the purchase, consumption experience and
confidence attributes of food products. Aware of their inability to assess this attributes at first
hand in the products they consume, consumer started to worry about issues like either
metaphysical and risk related attributes.
Hanf and Kühl (2005) propose that trust attributes of food products can be divided into
metaphysical attributes and attributes related to the risk. The metaphysical attributes are
generally related to the production process, and include features such as whether the product
is organic or not, if its respected animal welfare, if its has controlled and / or differentiated
origin and whether it is from a particular region. On the other hand, the risk related attributes
are usually related to the product itself, and include traits such as "free from salmonella, "or
"no cholesterol" (HANF; KUHL, 2005).
According to these same authors, the consumer‟s quality comprehension is a construct with
multiple dimensions. Therefore, systems of quality control must take into account three
dimensions: 1) Guidance for the consumer, i.e. the quality attributes must be recognized as
such by consumers, 2) Guidance for the process, i.e. the production system as a whole must
be explicit: form farm to fork, and 3) The practicality of using the products.
This represents a change in the patterns for what can be understood as quality control, with
more consumers concerned about issues like those mentioned above. Give information about
traceability and have a transparent production chain becomes a competitive necessity (HANF;
KUHL, 2005).
Within this context, the use of the Brand Ecosystem concept gains a new dimension. The
increased trend of consumption for organic products free of pesticides and contaminants
opens huge opportunities for companies that adopt the concept of Brand Ecosystem to gain
strong competitive advantage. Given the need for control over all stages of production that are
involved in the effective delivery the promises made by brands that adopt this type of
strategy, only an approach to value creation that has as its ultimate goal to provide a satisfying
consumer experience can be successful (PINAR; TRAPP, 2008).
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RESEARCH PROPOSITIONS ABOUT THE USE OF BRANDING
STRATEGIES IN BRAZILIAN AGRIBUSINESS
A challenge for the AISs of Brazilian Agribusiness is to offer differentiated value, and include
our products in the alternatives offered to global consumers through the enhancement of
intangible assets related to our production system (NEVES, 2007). In other words, highlight
our unique natural conditions, which can and should be translated into a production system
capable of handling the actual demands for products that cope with environmental
sustainability and social justice.
So, we present the following research propositions:
RP 1: Vertical coordination, when present in Brazilian AISs, act as stimulating factor
for the implementation of branding strategies.
The emphasis of coordination in the AISs was in process optimization, in order to increase the
net profitability of the whole chain, since the price factor has always been determined by
international commodities prices. The new emphasis on quality and food safety that permeates
the current market, and the possibility of creating value by offering differentiated products,
via the adoption of confidence attributes, opened a new dimension to the coordination of
AISs. A new consumer-oriented mentality is in being spread throughout the country. And it
brings along the need for vertical coordination and cooperation within the production chains
of AISs, and it includes the establishment of trust based long-term relationships between the
actors involved.
RP 2: Attributes of confidence, when actually perceived by consumers, encourage the
implementation of branding strategies.
New studies are needed to identify which attributes are perceived and valued by consumers as
confidence attributes. That is a must, in order to assure that branding strategies, and the
subsequent management of the AISs, could be developed and implemented consistently to
effectively deliver the desired value.
In the same context, another topic for future research is the identification of optimal
controllers for each AISs, and also which management methods and ideal pattern of
relationship between the actors involved are most appropriate for each case.
RP 3: The concept of Brand Ecosystems can be used in the realm Brazilian Agribusiness
commodities, using both product, national, ingredients, production processes and
certification brands.
The Brand Ecosystem concept we presented earlier seems to be designed for use within the
realm of Brazilian Agribusiness commodities. For the reasons above mentioned, only the
effective commitment of all the brands involved in the production process, and their conjoint
action to build a strong brand for the final product, would be able to provide the desired
competitive market advantage, and result in the effective delivery of the desired consume
experience. The final product brand and the necessity to create and maintaining its perceived
value to consumers, can act as a unifier factor for whole AIS and enforce the designation of
an appropriate coordinator to the productive chain. The recent trend to retailers to launch their
15
own brands has been acted as a strong motivator to this whole movement. Bit further efforts
should be directed to a better understanding of the factors involved in implementing this
concept in Brazilian Agribusiness.
An interesting alternative to Brazilian Agribusiness may be the brand alliance strategies, using
country-of-origin as one of the brands. The tropical fruits system, for example, could benefit
from the creation of a “Brazilian fruit” brand. Such a brand could unite different AISs
involved in fruit business, and help to create, enhance and maintain the competitive identity of
the sector globally. But further theoretical studies are needed to validate this hypothesis.
In the case of ingredient branding strategies, one possibility is the "green cattle" or "grass
cattle”. Based upon the recent concerns about food safety, animals raised exclusively on
pasture acquired a different value for consumers. No animal byproducts in feed, no BSE.
Some attempts were already made to create “grass cattle” brands, but the initiatives so far
were undertaken by suppliers of nutritional supplements alone. New attempts should be done,
and preferably, they should use brand alliance strategies, creating a “Brazilian Beef” brand
that represents the Brazilian Beef Industry as one whole, and that embodies the attributes of a
natural production process, traceability and both social and environmental responsibilities.
Branding strategies can greatly contribute to the differentiation of Brazilian Agribusiness
commodities, and help to create value in all stages of AFSs involved in its production. We
hope that further research efforts directed to this field, and could help to achieve a better
understanding of its mechanisms and ways of utilization.
FINAL CONSIDERATIONS
The following research questions arise within the context of this review: The concept of
Brand Ecosystem can be applied in the reality of Brazilian agricultural commodities? It can be
used to increase the awareness of consumers about the attributes of trust involved in the
consumption of such products? To what extent consumers behavior can be changed by the use
of branding strategies that combines a set of brands (e.g., country-of-origin, different types of
certification, guarantees of origin, source and manufacturing process / production, among
others) in the formation of the product final value? Could such strategies be suitable to the
reality of international consumption of Brazilian agricultural commodities? The summation of
different brands within the constituent steps of the AIS‟s is actually perceived by consumers
as advantageous?
Some questions to be answered are: What attributes are likely to benefit from this type of
strategy? For what kind of commodities such strategy is most appropriate? What kind of
combination of attributes is more advantageous?
This is an exploratory work. Further studies to empirically test the research propositions are
needed.
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