By The Brand Guy
I am not keen on spending money when I don’t have a lot. I will use mobiles as an example. I have to have a mobile for work. I need it to communicate for work or for friends. It’s also a device for entertainment (recreational reading for an hour or two every day).
I understand that mobile devices are commoditized, all offering a similar set of features and benefits, elaborations aside. I go out in search of a combination of price and performance. The process of making a decision is actually fun, even though it inevitably leads to a familiar low to mid-range Korean handset.
The underlying factor, performance, is key. It is a tool, not a luxury, the use of which gives me pleasure (for recreation) or satisfaction (for productivity). Possessing the tool does not make me feel better and I don’t need to use it to prove my worth to others.
Kevin Lane Keller’s brand equity schema places performance at the base of his pyramid. In the ‘brand meaning’ foundation .
Without the facet, the equity of the brand will fall apart. Consider luggage. It may come in an expensive variant, but if it is not fit for purpose, if it falls apart after one or two instances of use, that will reduce sales and the premium that the brand can command in future.
I have mentioned fitness for purpose. What can be added to the train of thought is efficiency and innovation. In a competitive market, a brand’s ability to perform efficiently (e.g., in delivering quick service or having user-friendly features) also shape its performance.
Brands that keep innovating tend to create more value for their customers, which augments their position in the market.
Durability or reliability focuses on how long-lasting and durable the product is. Products that stand up to repeat use tend to earn a reputation for reliability, which strengthens the brand’s equity. Innovation is interesting in this regard.
Untried innovation can be complex and expensive to repair. In the event of product failure, this can reduce the equity and premium. In spite of the implicit luxury in owning the latest technological advance, the brand manager has to reduce the risk in product development. The latest is not always the greatest.
Consistency is particularly important in the long term. Products will be made redundant due to process improvements, new technology and economies of scale. Normal wear and tear will also lead to product replacement. Consistent product quality is fundamental to keeping existing customers satisfied. If satisfied, customers will have an inclination to buy again.
Consistency establishes a reputable , sustainable and competitive brand in the marketplace. This, in turn, drives profitability, operational efficiency, and sustainable business growth.
Finally, the customer will establish in her / his mind an estimation of pricing fairness, value for money. If the pricing is excessive among the category selection set, the customer will inevitably switch down to a lower-priced option, particularly when making a repeat purchase.
The fact that the customer has money does not indicate willingness to spend. The corollary to this is that an excessively low price can indicate lower quality, not value for money, and the customer will switch up to a product with a higher price. Beware of discounts.
Every product comes with a particular value. That value is not measured by price alone, but by a complex set of judgements based on performance. Ensure that the aspects of performance are correct either as standalones or for inclusion in the product portfolio.
*Pierre Mare has contributed to development of several of Namibia’s most successful brands. He believes that analytic management techniques beat unreasoned inspiration any day. Reach him at contact@pressoffice7.com if you need thought-leadership, strategy and support.
