Readers of this blog know that I am a strong believer in the power of brands. How else, in one or two words, can a rich set of expectations, promises, emotions and attributes be powerfully and instantly telegraphed?
Think of what immediately comes to mind, for better or worse, when you hear brands like REI, Whole Foods, Apple, JC Penney, Disney, The Republican Party, or Trabant. Brands are living representations of the customer experience, at all touch points, and need to be carefully watched and managed. Ok, we knew this already, right? Of course.
Well, this morning I ran across 2 things that seemed to contradict each other. But the takeaway point is, there is another powerful influencer that can undermine or overwhelm the power of a brand – – VALUE.
Thing 1) A soon-to-be-released study from the Grocery Manufacturer’s Association reveals that only 41.7% of consumers claim that price is ‘very important’ in food shopping. Also, for the first time in recent memory, less than half of consumers (49.1%) say items on sale/money-saving specials are “very important.” What does have influence? Service, expertise, guidance. You can read a preview here).
Thing 2) My morning paper had a blow-on sticker advertising a clearance event at JCP. If you’ve been following, the brilliant merchandiser behind Apple Stores’ success, Ron Johnson, has taken over at JCP with a philosophy of weaning deal-crazed consumers, through elimination of promotions and investment in store upgrades. The reaction from the Street and the media tells us that his job is not quite done yet. (and the sticker is Exhibit A.) A good NYTimes overview here.
So what is the point? These 2 observations would seem to be contradictory. In one, consumers are telling us they don’t focus on just price; in another, evidence that consumers are stubbornly insisting that price matters.
The point is that brand strength is absolutely important, but is in the end one of several interconnected purchase influences, all of which direct the final decision. An exceptionally strong brand like Apple, representing a unique product/service that is not available elsewhere, can drive purchases among consumers even if it’s not the most economical. Apple has earned this strength through its excellent offerings (including the retail stores), although the Samsung brand now seems to be on the ascendance through its own innovation.
JC Penney, on the other hand, is a brand that claims strong awareness, a seemingly consistent image (retailer of good value, good quality products), but is not unique in the market. There are substitutes everywhere and the JCP brand is not enough to compel purchases. Thus, when faced with elimination of expected discounts, consumers are happy to vote their dollars elsewhere.
I admire Johnson’s goal with JCP; perhaps rather than rallying disproportionately around the ‘no discounts’ flag, more of the investment (and messaging) could be directed toward what grocery shoppers look for: Service, expertise, guidance, and maybe things like selection. (although I’m no retailer).
The clear lesson – all brands need to be carefully assessed and business strategies molded around the strengths and weaknesses revealed. No brand is so strong that it is a replacement for delivering clear value.
The Armchair MBA 