The right reputation

It’s the great challenge facing every company in a consumables business – how do you make your brand stand out when your product has become a commodity?

One company confronting this challenge is Melbourne-based cable manufacturer Kordz, which makes specialist home theatre equipment including audio and video cables, but specialises in the production of HDMI (high-definition multimedia interface) cables. These cables are used on high-end televisions and media devices, including Blu-ray players.

The global home theatre market is worth more than $10 billion, but while consumers will spend up big on the latest plasma TV and sound system, cables are often an afterthought and many will simply buy based on price or brands they recognise.

But Kordz chief executive David Meyer says it is possible to stand out from the crowd by putting reputation before all else.

Patrick: Kordz won Smarthouse.com.au’s award for the best HDMI cables, but you won’t find Kordz in mainstream retailers. Why is that?

David: I avoided big name retailers such as JB Hi-Fi in order to maintain the integrity of the brand. Instead of just building a business for volume, which is all about the dollars and cents, I took a specialist approach with individual and independent retailers.

We would have a much bigger business if we did go that route, but I’m more concerned with brand integrity and the reputation of the product.

But why is branding so important in this sector?

There is a proportion of the home theatre market that doesn’t care what the product does and will buy based on brand. Lines are blurred between products and they can’t see quality differences, which is why this becomes hard. So part of the challenge is educating the market in what actually makes a difference in quality.

But awareness is growing, and people are looking at better alternatives. So we have to be part of that and ensure we educate the market in what does or doesn’t make a good product.

So how do you convince them to pick one brand out of many?

It’s hard to differentiate a product that is essentially a commodity, but it comes back to the product itself. The two obvious differences with our product are the greater physical flexibility and a secure lock-in system, something other cables don’t have. There are a number of brands, but they are all doing things the same way, so we’re trying to do things a little differently.

Does education work?

We’re seeing a good response. Another helpful differentiator is the topic of compliance. Some don’t know this, but HDMI actually has licensing, rules about how the HDMI logo can be used on the cable, printed on the shell or whatever, but there are a lot of compliance issues with cables that do that and tarnish the HDMI reputation.

We can use that. We point to them and say, if they can’t get licensing logos correct, what are they going to be like in sticking with compliance with the hard stuff?

You recently started an expansion into the US, have you needed a different approach?

We are taking advantage of the chaos in the market. It sounds very cynical, but we’re just trying to use complete loyalty and honesty when it comes to the brand. Our marketing approach in the US is just to give the product away for free, and then stores can see how it works.

It’s working so far, because right now the market is flooded over there. There is a high level of dissent, and people don’t know what they want. Our job is to show them how our cable differentiates from the dozens of others out there, and you can’t do that unless you believe in the product and actively go out and show that it works. You can’t rely on them to pick your brand out of the many available.