The Brand vs. the Dollar
Posted on | July 30, 2008 |
I’m mulling over something in my brain, which I’ve been co-mulling with a good friend: what’s more important, the price of something or its “brand value”? To clarify, is it more important that a product/service is priced very competitively (to compete in the global economy of widgets) or that it has brand value?
I will agree that price is important…but more for non-quality items. If someone is getting an oil change or a car wash, they’re likely to believe that one is as good as another so why pay more. But for products/services of value (real or self-ascribed), I think that the brand factors just as heavily into the equation.
Here’s my non-scientific proof: if people were solely concerned with price, how would/could a company like Starbucks ever come into existence…let alone flourish and dominate? The only answer is that their brand represents something beyond what their actual product is. Yes, they make excellent coffee…but that is NOT hard to do. It’s hard (or, not easy) to standardize over a large number of stores…but all that takes is the assembly line method of production to learn and perfect.
How about Coke or Pepsi? I mean, can’t someone just as easily make a good cola for less? Of course, but people have come to know that there is a standard they can expect from these companies.
I guess the ultimate expression of brand is Xerox. Once someone starts using your corporate name to describe a generic product or service…well, that’s pretty good. But, that still doesn’t mean you have guaranteed revenue.
I’m not sure what is more important. They’re probably both a consideration for lots of people. One thing I do know is that it’s harder than ever to start and run a successful business, as there is more competition than ever. But I don’t think that any business’s success is solely based on the price of their good or service.
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From Ohm to Om reflects the opinions of mastering engineer Paul Abbott, owner of San Diego's ZenMastering.
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August 5th, 2008 @ 5:17 pm
Where does Wal-Mart fall in this? They have created a gigantic brand name by discounting.
The dialogue with your good friend is about *how* to establish a brand name when you have no brand name.
Competing with established Brands is usually out of the question for a business with limited financial resources - unless they have an idea for something unique and novel at a reduced price. Therefore, competitive pricing with a quality product is an easy way to enter the arena and build a brand name. The key is keeping the quality high while building the brand. If you sacrifice quality during your branding, it is a near-permanent perception. One word: “Hyundai.”
I’m sure your friend would agree.
(wink!)
P.S., “Band-Aid” and “Kleenex” are 2 more “ultimate expressions of brand.”
- Rickshaw