When brands matter

I’ve been trying to think of a catchier title today, but what I want to talk today about is as simple as those three words.

In a number of previous posts, we've written about the significance of trusted brands for certain niche groups of consumers: the “pink collar” shopper, men with high incomes, gays and lesbians, Latinos, and African Americans. Creating and building product recognition and reputation comprises the great mission of marketing, one that seems increasingly difficult in a world where advertising has all but imploded, social networking dominates the discussion, and economic conditions pressurize the creative process. It’s no surprise, then, that even with a great brand, companies have to follow some solid guidelines to maintain their spot in the collective imagination. Keep the design in tune with your target audience, keep the price in line with the perceived value, and keep the product itself consistently good.

When we think about advertising and marketing firms as products in and of themselves, it turns out that similar criteria matter for both steady profits and reputation. According to Media Buyer Planner,

Premium-price firms reduce uncertainty by focusing on profit and value and are more likely to use value-based pricing to price their services (43 percent versus 21 percent of the bargain price firms). These firms first consider the value they can provide, then back that up with the confidence and in their ability to provide that value.

This logic is slightly reminiscent of trends in college tuition pricing, where “second tier” schools (not Ivy League, but with solid academic reputations) – keep tuition high as much for the appearance of a premium value as for actual budgetary needs. Let’s keep in mind that we’re talking about high-end firms and products.

The specific relationship between a brand (be it a product, a firm, or a seat of higher learning), and its perceived value varies based on the niche to whom it’s being marketed. There’s a whole range of possibilities between luxury and discount that make up the vast majority of purchases in daily life. How can a firm remain creative in that vast landscape of possibilities? One other interesting finding was that the most profitable firms had the least pressure from their clients, a hard thing to manage in economic tight times, but a good one to remember.

Here’s a great example of how design and positioning matter: a study in the Journal of Marketing finds that people buy wine based on the appearance of the label. The study used photographs of wine labels to determine that buyers associated certain designs with different price and quality rankings:

They asked 125 experts — graphic or industrial designers — to analyze the aesthetic attributes of each bottle. Then, they sorted responses into five primary design types: massive (or bold), contrasting, natural, delicate and nondescript.
Next, researchers showed photos of the bottles to 268 consumers in Oregon. They asked 15 questions about each bottle’s “brand personality,” including whether the brands seemed sincere, exciting, competent, sophisticated or even rugged.

Not surprisingly, people associated delicate designs with competence, and “massive” designs with low price and low quality. The goal was to help a marketers think about matching design factors with premium customers, but unfortunately, the study operated on the presumption that all wine buyers only used one set of criteria (packaging) to choose a product. By contrast, Wine By Joe, one of the brands critiqued in the study, positions itself deliberately outside the “premium” crowd, arguing for people to “drink the wine, not the label.” This is an interesting back-end way around the reputation and design issue, creative and economical all in one. I’m almost convinced to go get a bottle and see what my brand personality has to say!