Podcast Transcript: Brand your way to success
Some entrepreneurs think branding is a waste of time and money. Others think it's crucial. But let me ask you this: How would you market a product that looks, and is, exactly like your competitor's?
In today's show, the second in our branding series, we're looking at how a solid value proposition can fundamentally change your business. I'll speak to a Canadian company that sells a clear liquid petrochemical, the same petrochemical hundreds of other competitors are selling to customers around the world. The difference with this company, and it's Canadian by the way, is that it can sell its product for more than its competitors can, and they have buyers coming to them. So how did they do it?
I'm Michael Mancini, Editor-in-Chief of CanadExport, the magazine of the Canadian Trade Commissioner Service for entrepreneurs who want to trade, invest and prosper in the global marketplace. Look for our magazine at canadexport.gc.ca.
Michael Mancini: Now I'd like to welcome John Floren, Vice President of Marketing for Vancouver-based Methanex. Thanks for speaking with me today, John.
John Floren: No problem.
Michael Mancini: Now in part one of our branding series I spoke to Andrea Mandel-Campbell, author of "Why Mexicans Don't Drink Molson" about the importance of branding. Now she contends that Canadian companies aren't doing enough to brand and market themselves to stay competitive. But she cites your company, Methanex, as an example of a Canadian company that really has been successful at building its brand. I'd really like to hear your perspective. Tell me first, if you will, John, what is the Methanex brand, if you could describe it.
John Floren: The real tenet of the Methanex brand is what we call reliability of supply. So we're the global leader in methanol supply and production and what we brand our company on is that when you deal with Methanex you're going to get a product of top quality, the one you wanted, on the specs that you've ordered it on at the time you want it. And in the methanol business that's quite a differentiator because it is a commodity—type product and not everybody is able to deliver on time, on spec 100% of the time.
Michael Mancini: So you're selling much more than just a clear liquid called methanol?
John Floren: Absolutely. I mean we sell a total package and our brand is not only of reliability but it' s things like responsible care where we spend a lot of time on things like health and safety, around safe handling of the product, around helping our customers and even our partners in improving their records with regards to operating their plants, operating their ships, operating their terminals in the most effective manner. As well, the brand for us is around leadership where we tend to want to lead in all areas of the methanol industry and that's from things like price leadership, market leadership, leadership in developing new markets for our product whether that' s in the energy sector or things like biodiesel. We certainly want to be perceived as the global leader for all applications of methanol.
Michael Mancini: Now tell me, you mentioned responsible care. Can you tell me a little bit more about what responsible care is?
John Floren: We use the term responsible care. It's something that's come out of the Canadian Chemical Producers Association and it's really around how you handle your product in the marketplace, but also how you do things internally. So everything from health and safety to the life cycle of the product to how you manage your plant, how you manage your employees. It's kind of sometimes referred to as corporate social responsibility. We brand it as responsible care and really doing no harm to the environment or people or to any of the stakeholders that are involved in the Methanex experience.
Michael Mancini: Now why did Methanex choose to brand itself that way?
John Floren: Well, in the chemical industry, you know, it does many times get a bad label for not acting responsibly and there have been many instances where chemicals have been viewed as bad and we try to change that paradigm in saying that chemicals are an essential part of everybody' s life and in fact since chemicals have been around, people's lives have improved substantially. And we think that as we continue to evolve the business and get into markets that aren't let's say as experienced in health and safety as western companies, we try to reach out and share all of our information, all of our experiences and all of our knowledge about how to handle the product in a safe and effective way with all of our partners, competitors and customers so that we can make sure that the methanol product, which is really the only product we handle, maintains a good reputation and is not viewed as a bad product in many people' s eyes.
Michael Mancini: Take me through a shipment for example of methanol to a market. What is it that you do that might be different from how some other company might do it?
John Floren: Sure. That's a very good question. So from the time the gas, natural gas, which is our raw material, enters our plants till the time the methanol leaves our plants, we have a complete health and safety point of view on changing that gas into methanol which is done at a very high temperature process and then you' re dealing with a product that, you know, is a poison so it has to be managed in a certain way.
So the big challenge for us after it's manufactured is that the times it's transferred between the plant to ships, so from a terminal to a pipe to the ship, and then when that ship arrives at a terminal, then back into another terminal, and then when it arrives at a customer in the form of a barge to truck or rail car, there are lots of points of connection where if you' re not really focused on how to safely handle methanol, things can go wrong. So we not only do that internally but we share those kinds of points of what we call high risk with our competitors and with our customers as to how you need to handle the product in a safe and effective manner.
Michael Mancini: So really, building trust is a central component of the Methanex brand?
John Floren: Absolutely. Trust globally is the number one thing that you come up against and if people trust you and understand that you're trying to benefit them and share your experiences and share your value, then over time that trust is given back to you in the form of long-term business relationships.
Michael Mancini: And that's exactly where I' d like to go. What's different about your business now that you have your branding strategy in place? What effect has branding and marketing had on your business?
John Floren: Well, two things. I think on the supply side as countries are looking to monetize their natural gas, there are many different ways they can do that, whether it's petrochemicals or LNG (liquified natural gas) or electricity generation. They're looking to partner with leaders, and when people think about making methanol they're thinking about Methanex, so there are many instances where countries that are thinking about taking their gas reserves and making methanol, they contact us first. So our brand is well known, that we're the clear leaders and that we have this way of not only sharing our responsible care practices but aligning with countries where we deal so that it's a win-win proposition. Our reputation allows us to maybe be considered for many projects that maybe we wouldn't even have thought of as potential. So we get a lot of opportunities through our brand.
Second of all, with our customers, I think, you know, we like to align ourselves with leaders and the customers we deal with that are leaders in their industry like to align themselves with the leaders in the methanol industry, so it' s allowed us to really, I don't want to say choose our customers, but in some way it is, allows us to align with the key leaders in their industries and grow our businesses together in again a win-win proposition.
Michael Mancini: Now if you can take me back, I'm curious to know how Methanex actually built its brand. How did your company do it?
John Floren: I think it started in the early to mid-1990s when we saw this industry as being very regional, very disparate and many different players, and there was really no clear leader in the industry, and what we thought was a good strategy is can we take this commodity that's kind of had many, many players around the world and carve out a clear leadership position for the company. And that was done through a series of acquisitions and consolidations.
As we got that market position as a leader, we tried to figure out what were things that customers really valued and, you know, there are many things they valued but when it boiled down they wanted to have a supplier that was reliable, that could deal globally with all of their different plants with a product that was reliable and on spec. They wanted to have somebody that was a clear market leader that could help them understand the global methanol market and they wanted to have somebody that really had the same values as their company as they were globalizing their companies. So we were probably a little ahead of the curve as far as thinking about this business globally before many of our customers and their derivatives were also being viewed as global products.
Michael Mancini: Well, let's talk a little bit about your global operations. Do you have to change your approach country by country, especially when it comes to the way you market and brand your product?
John Floren: We do have a different approach on a country or region by region. We have local people running our local businesses around the world. But what we find is the same themes come through. Maybe they're spoken of differently or they're interpreted differently, but things like... I mentioned reliability around quality, around responsible care, around market leadership. We find those things are pretty standard from country to country, region to region. I have to say Methanex is not a company for everybody. If you're a customer or an entity that wants to buy strictly on price, we're probably not the type of company you want to deal with, but if you want the total package where you're looking for reliable supply, on time, where you don't have to think about it, we're certainly the clear leader in that way.
So as we go around the globe, and we recently opened an office in Dubai and have a very large presence in China , we're finding that the way of doing business is slightly different but the values and what people are looking for are very similar.
Michael Mancini: Can you take me into the differences in how you operate for example in Dubai and in China ? What would be some of the differences?
John Floren: Well, in China I think things are more fluid. It's a developing market so you need to be a lot more flexible and the companies there are a lot more flexible. In Dubai, you know, it's really the centre of the Middle East and there are lots of natural gas reserves in Dubai and they' re looking to monetize that gas, but I think the change there for them is they used to want to take their gas, make it into something and export it, and now with the emerging population growth in the region they're really looking to look for downstream derivatives of methanol and other petrochemical products.
In China , it's more about being a reliable quality supplier. So the Chinese are used to many different qualities of product. There's a lot of methanol being made in China at many different specifications and some of the specifications are acceptable for certain applications but not acceptable for others. So our solution there is not only quality and reliability, but it's also solutions around logistics, supply chain and how you get the product to the end user on time in a very reliable and effective manner, which is still developing in China. The logistics infrastructure there is not let' s say as sophisticated as what you'd see in western countries.
Michael Mancini: How much of your time and your resources are you actively spending on developing your global brand?
John Floren: Well, everything we do is about branding. We call it the Methanex experience. Everything we talk to our customers and our potential customers about, what the differentiation is by dealing with Methanex. It is a commodity, we understand that. The molecule is somewhat interchangeable, but how you get that molecule to the customer is quite different, and we spend a lot of time on what we call value propositions, understanding customer needs, understanding what differentiates them in their business, and seeing if there' s a role for us in that business.
We spend a lot of time in understanding markets, understanding the supply/demand, understanding the various competitors' value propositions and really differentiating ourselves with those customers that are willing to pay for the differentiation.
Michael Mancini: Now on a final note, how do you see your company's branding and marketing strategy evolve over the next five to 10 years? What are some of the challenges you expect to be confronted with?
John Floren: I think our biggest challenge, as methanol becomes more in the energy market we're going to become more and more one on one with the consumer. I think up to now, you know, I could consider our business as being 50 large customers that are very adept and very knowledgeable about dealing with methanol. As it becomes an energy product, whether that be fuel blending or dimethyl ether or biodiesel or methanol to power, we're going to actually be dealing with consumers. When you're dealing with consumers your message, your communication strategy, how many times you have to communicate becomes a really different paradigm and we're going to have to think about how we choose to deal with that as Methanex or through an association, an industry association, and really it's a different set of customers than what we're used to.
As well, I think we're going to be coming into more and more different geographies with our regular customers. Most of our derivative customers have operations in China or Asia and are moving their operations to China and Asia . So I think we're going to have to become more and more adept at dealing in the Asian cultures. The company's footprint for methanol has really been in western Europe and North America, but I'd say over the next 10 to 20 years most of our business is going to be shifting to Asia, so we're going to need to have a different set of leaders, a different set of perspectives and a different set of how we do business based on how the derivatives are shifting to Asia and how the methanol market is shifting there.
Michael Mancini: Great. Thanks for taking the time today, John.
John Floren: Okay. Thank you very much.
Michael Mancini: I have been speaking with John Floren, Vice President of Marketing with Methanex. He was speaking to me from Dubai in the United Arab Emirates .
Now you'll recall at the beginning of the show I asked how you would sell a product that is identical to what your competitors are selling. I guess the answer, in this case, is you aren't selling the product, methanol, you're selling the service, you're selling reliability, and you're building a brand along the way.
Well, that's all for this podcast edition of CanadExport.
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I'm Michael Mancini, signing off for now.
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