Classic thinking is that customers will pay a premium for a brand name vs. an unbranded or retailer brand item. That thinking has faced a stiff challenge in the face of the recent economic downturn and modifications in consumer sentiment. This is primarily true of luxury brands. Witness the latest demise of Hummer, a once iconic symbol of status and wealth - now the object of derision and the poster kid of conspicuous consumption.
In this "new economy", a brand name ought to deliver more than familiarity, significantly more than fame, a lot more than fancy packaging. These tried and true procedures have worked in better occasions, based in element on the theory that a recognized evil is far better than an unknown evil. In other words, most people today are reluctant to attempt some thing distinctive and unproven. And that's component of the problem. Major brands have banked on this comfy "I-know-you, you-know-me" relationship. But with pressure on the wallet, consumers are reaching out for much less expensive options. Walmart, for instance, not too long ago took Hefty and Glad bags off the shelves in favor of its own store brands. To add to the sticky mess, nicely-established brands have designed "brand young children" or brand extensions, which have only added to the crowded clutter on the shelves. Just how a lot of varieties of Cheerios can the consumer stomach? Frosted? Multi-grain? Honey Nut? All this in an attempt to raise market share.
What has been lost in all of this is the fundamentals of branding, which involves producing a unique marketing and advertising position, a point of differentiation. Brands will need to get back to the basics of getting better, not just popular. Apple has done a great job of this with their iPod. Think about giving your kid a knock off mp3 player for a birthday present. They have invested in their industrial style, intuitive use, and ease of the iTunes interface. There are any quantity of mp3 players with even more memory and possibly even far more functionality, but it's not enough to unseat the iPod.
But this differentiation calls for an investment. It signifies understanding what your merchandise and services actually deliver to your customers, rewards they do not get from competitive merchandise. Do you know the answer to that question? Are there any real differences? Or are you relying on name recognition alone to carry the day? It could even require rolling up the sleeves and creating a thing "new and improved!"
The simple and easy ride is over, and quite possibly will be for some time. Good. It means receiving back to what awesome brands should have been carrying out all along... improving, innovating and enhancing the client knowledge.
