“Why is our limo service competitor so busy and yet they charge 50% more than us?”….Limo service operator
“Advertising (eg. Coupon Book, Newspaper and online) has not worked for us in the past “….Restaurant owner
All advertising should result in immediate sales is the underlying expectation. The expectation is unrealistic and we try to explain why building a brand is important with these examples:
- Compare Lead Brand and Store Brand Medicine prices: Go to a drug store and compare the prices of the cold medicine “Vicks NyQuil” with the store brands like “CVS”. Similar store brands are available at Rite-Aid and at Walmart with its store brand “Equate”. The lead brand and store brand have similar package locations on the shelf so that consumers looking for the lead brand cannot miss the store brand. The store brand has the prominent package declaration “Compare to the active ingredients in xx(name of lead brand) ” as pictured below. But colds seem always severe to the sufferer and going with the lead brand seems to give comfort right from the point of purchase! This imagined comfort is despite the lead brand being far more expensive than the store brand. For example, Nyquil at 87.4c/oz is 155% more expensive compared to CVS at 55.4c/oz according to the CVS pharmacy website. But you can’t take risks with your health, our friends argue. So what about milk brands? we ask – why does store brand milk sell at a lower price when the same milk branded sells at a higher price? And so goes the discussion about store brands vs. national and global brands. Keep in mind that brands like “CVS” are big brands in their own right and do give a lot of comfort with the “CVS” name. Try selling a new and unknown brand with the same ingredients as the leading brand in the OTC (over the counter) medicine category….
- Big brands have BIG value: Tata Motor’s bought the Jaguar and Land Rover brands for $2.56 Billion and while car making factories sound expensive, they cost no where near the amount paid. Even more stunning is the $19.5 Billion that Kraft paid for Cadbury’s. Factories for making chocolate and soda don’t cost anywhere near that amount. But if you put the name Cadbury’s on any confection (including traditional sweets from any culture) distributors,retailers and consumers in hundreds of countries would give it a serious try. Try instead to come up with the best chocolate in the world with a new brand and it would take years to convince a retailer in Africa to stock it. Let alone advocate for the new chocolate brand. This after spending millions in advertising, sales staff,retailer and distributor commissions by the new brand.
- No one ever got fired for buying IBM: This is an old B2B marketing quote that was mentioned in an earlier post titled “B2B marketers think value while Supply Managers think risk“. B2B brands have great value so when IBM sold its PC business to Lenovo it did not sell its iconic brand and successfully diversified to software services for businesses.
- We are all building a brand as individuals: From the education credentials we get to the volunteer activities we do -we are all in the process of building a brand that is us. In fact a book You are a Brand! is considered a Goodread. LinkedIn is entirely devoted to help build professional brands. At a more granular level professional associations for every profession you can think of, are geared to help the brand “you.”
But the question remains as to why brand building is so important. A short answer is that a respected and trusted brand makes business transactions much more easier. People feel comfort because of the brand.These people include not just customers but also employees,suppliers,distributors,investors and bankers. Naturally the entire organization behind the brand has worked hard over several years to earn trust and respect through great product and service. These lead brands have excelled in delivering on their core value proposition over time. They have also kept up with consistent advertising in putting the word out and building their brand.Leading brands do understand that no amount of money on advertising can help a bad product or service on a sustainable basis.
To summarize, it is unrealistic to expect every dollar spent in advertising to give you immediate results although pay-per-click (PPC) advertising like Google AdWords does give immediate results for several types of businesses. However, keeping up with advertising (both online and offline) does help build your brand. The caveat is that the advertised product or service must be great and result in repeated customer satisfaction. About StratoServe Digital Marketing Services.