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Beware the Harbingers of Branding's Doom
By: Jeff Louis
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While social media has its useful purposes, it also brings us unneeded baggage, or what I refer to as "the harbingers of doom." We're exposed to inane daily headlines that remind of tabloid headlines espousing things like alien abductions.

I realize that formulaic blogging sets the expectation in the headline, and part of the headline's purpose is to draw attention to the article. This explains the abundance of lists. However, not all of these writings are are tabloid-worthy; some prove worthwhile. Thus, when I read a recent headline on BNET, "Brand Marketing = Bad Investment," my curiosity and skepticism were raised like hairs on the back of my neck. I had to check it out.

Basically, the entire article centers on a single statement from an article in The New Yorker on the iPad.

"Today, consumers don’t need to rely on shorthand: they have Consumer Reports and J. D. Power, CNET and Amazon’s user ratings, and so on, which have made it easier to gauge differences in quality accurately," the author said. "The result is that brands matter less: a recent Nielsen survey found that more than sixty per cent of consumers think that stores’ generic products are equal in quality to brand-name ones."

The author goes on to say grocery shoppers, the most brand conscious, believe that generic products offer the exact same thing as brand names based on a recent Nielsen survey. Thus, his take on this is that brand marketing may worked in the past, but in the Information Age, the difference is the consumer's experience.

Point taken. I can see where we're going. Money's being wasted on branding.  

Many Americans now choose generic brands where once we were brand shoppers, and this comes as a result of a crap economy. While many generic brands contain the exact same ingredients, not all are not created equal. For instance, I can buy a Sony for $1,000 or a Haier for $800, with both being identical in size and options. Despite being twins in nearly everything but name, the Haier is put together poorly and therefore more apt to fail.

Is this just consumer experience, or is it an expectation based on past experiences that provide us with the knowledge that generics don't have the built-in reliability we know we'll receive when purchasing a branded product? All things being equal, would you pay the extra $200 for the Sony? According to the author, you shouldn't, for all the brand name does is bring a higher cost.

If you look at the highest grossing grocery store chains, Aldi, one that sells only generic brands, is no. 26. Safeway, seller of brand and generics, comes in at no. 5, and Kroger, much like Safeway, is no. 2. Granted, the fact that Aldi sells lower-priced items has something to do with this, but considering the disparity in rankings, there's more to it than that.

At Aldi, prices are less expensive and the products are similar to brand name products, but customers have to pay for bags. Plus, Aldi is a difficult shopping experience: It's chaotic, nothing is labeled, and the produce and dairy products don't compare in quality. Is the lettuce exactly the same at Safeway? You bet. However, the lettuce at Safeway gets handled differently, packaged differently, and shipped quicker. Generally, it is a better product. Would I pay an extra dollar for lettuce that will last a week versus lettuce that will last for two days? You bet. 

The author has a plausible point of view, and somewhat adheres to the 80/20 rule, but seems to miss the point. Branding is more than a product or a user's experience; a brand is a promise of value, authenticity, and service. A brand sets an expectation in our minds and then delivers on the promise. The purpose of branding is to set and deliver on these expectations - or promises - and is the purpose behind building a brand.

Why does Wal-Mart need to establish their brand position as the low-price leader, if all other things being equal, they're similar to a K-Mart or a Target? Because that's their point of differentiation and the way they brand their stores to the public. It also establishes their market position. The whole point of branding is to establish the difference, own it, and then deliver. Is Wal-Mart spending money on branding?  You bet.

To prove branding pays off, the highest grossing grocery store in 2010 is Wal-Mart, a position they've held for the past decade. This comes despite the fact that their prices are similar to Aldi's.

 


   

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About the Author

Jeff Louis: Media Planner, Brand Project Manager, blogger, and aspiring writer. Please leave a comment or get in touch with Jeff on Twitter. As always, thank you for reading!

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