Branding: People Will Spend More on Big Name Brands - Essay Example

Branding: People Will Spend More on Big Name Brands Luxury is considered superfluous, yet it is an essential element of today’s business world. The 1990s has given risen to a new form of luxury, where consumers fantasize and consume expensive products. This fantasy has been created by marketers displaying their brands in elaborate ways, aimed at consumers who are willing to owe such possessions at an extra price. This change in behaviour has made luxury into a reality and it no longer remains a handmaid of lucky few, but many happy ones. However in the middle of such abundance of luxury, marketers have carefully created this aura of normal commodities and exquisite brands (Jean, 2006). Luxury has the power to give to people an idealized image of beauty and satisfaction. Until the mid 20th century few people could afford to have luxurious items and only a privileged class of society had access to luxurious items. However in the past fifty years the tide has turned and luxury has come down to majority of the people in the shape of brands, which are targeted at upper middle class. This change to brands (luxury) started its way slowly in 1980s, where the rise of individualism fueled the power of business and brands sprouted up to be consumed by wealthy consumers. The purpose of the brands was to spread the charm and luxury creating a personality cult, where people would identify themselves with their brands (Koehn,2001). Branding is the foundation for a business, which is meant to label a product. In marketing brand is considered as an embodiment of all information related to a product. A brand normally includes a name, logo, images, fonts or services, which typically arise in consumer’s mind, when a name or logo is mentioned. Thus we can say that brand is a combination of attributes, which are communicated through emotional attachment with a product. The value of brand is in the mind of consumer, which creates this promise of satisfaction. However brand is not mere creating emotional attachment, but it moves beyond emotional forms and give two kinds of experiences; direct and indirect messaging. For example a customer driving a car is gaining direct experience. However it is not possible for marketers to send direct message for all their products, they opt for indirect experiences, such as Nikkei products are associated with fun, excitement and sport as portrayed in TV commercials and magazines (Bush & Victoria, 2004). This kind of branding is repeated again and again to make it effective in consumers mind. Thus we can say that branding main purpose is to convey product message in multiple ways involving consumers in a compelling way to think and buy the product. The value of brand lies as a security for the company earnings. As a result a new company would go to any length to develop its own brand to become unique for the reason that branding creates a separate identity, for which consumers are willing to pay more, resulting in greater earning for the company (Ehrenberg &Neil, 2002). . DISCUSSION Normally consumers used to think that cheaper products are better. The producers believed that if they lower down their prices, their product will be a definite hit, but in modern marketing, things have changed. For example, there are two kinds of washing powders, A and B. A is $3 cheaper than B, yet B succeeds and A fails, despite being lower in price. The reason is that B powder has been working brand image through advertisement, which has been created by the company perhaps portraying more cleanliness and sophistication, while A powder manufacturer has been silent and trying to save money, which in the end costs the company to be a follower rather than a leader (Cathy &Walgren, 1995). The postmodern consumer is wealthier than ever and has extra money to spend on branded items. It is normally becoming equal with friends or colleagues, which creates this brand competition. For example having a car is not a big issue these days, but a professional executive will not like to drive a cheap car, which any Tom Dick and Harry can afford. This idea has given rise to countless high priced cars, such as BMW, which is expensive but stands for a class and sophistication. Similarly Benz also portrays the similar image of class and sophistication. The issue is being different from normal car owner; for example sports car does not have any practical purpose, but consumers are willing to pay higher price just to owe a sports car. The basic reason for paying more for the expensive car is joining the elite class. A cheaper car portrays normal background, while branded car means coming from a higher class, and it is this idea on which companies are capitalizing (Koehn, 2001). Brand is not just related to expensive items, but an every day item can become a rare thing .For example coffee is normal drink, but Starbuck has been successful in creating their unique image, even though it coffee may not be unique or dazzling which can be bought by paying few pence in a neibourhood shop, but it will not be Starbuck experience. Thus customers do not mind paying five dollars for just a cup Starbuck coffee due to its unique image of socialization. Even though in recent years, coffee and milk consumption has been on decline, but Starbuck effective advertisements and PR made the coffee consumption go up. Yet making brand image is not cheap to come, Starbuck spends about US$ 10 million every year on advertisements and its brand creation (James, 2000). One of the most famous brands is Coca Cola, which was introduced as a patent medicine. The soft drink is nothing more than a carbonated drink, but the company effective advertisements and campaigns have made it a universal brand, known almost every corner of the world. Even though there have been many rivals through out the decades who offered their products on much lower prices than Coca-Cola, however no one has been successful in breaking the magic of Coca-Cola. The reason is Coca-Cola extensive spending on creation of its brand image. Since 1928, it has started to sponsor Olympics and has been sponsoring Olympic since then. It has also been sponsoring FIFA World cup since 1978, the 1997 World Cup was called FIFA Coca-Cola cup. Involvement in such activities cost millions of dollars, which the company is paying to retain its image and stop the rivals from breaking its myth. The labour of such intensive efforts has been fruitful; Coca-Cola has become synonymous with America. In wake of all kind of cheaper rival soft drinks, majority of the world population prefer Coca-Cola, even if it is expensive (Allan & Joel,1996). The success of a brand is not determined by how many people are aware of it, but how positive they feel about a particular brand. It is the brand image, which creates this aurora, which moves not only beyond the features, but even the name/logo is enough to satisfy a consumer, even if it means paying the double price. IBM Thinkpad is one of the most expensive laptops in the market. There are other companies who offer laptop with similar feature at half the price, what IBM is offering. However, its loyal customers love the ThinkPad ruggedness, its quality, innovative features and consistent support from its IT helpers and consumers do not hesitate to pay the double price, they would pay for any other brand. China is making its own cheaper computers, but Chinese entrepreneurs are willing to invest in IBM premium brand to sell it in Chinese market, because there are IBM customers in China who are willing to pay no matter what (Channel Insider,2004). For some sellers, it is the message, which carries its message. For example Intel sells via its logo “Intel inside”, a message to consumers that it is Intel, which makes their computer powerful, not just the exterior. They have led this campaign extensively in magazines and newspapers with only one message: Intel inside” telling the users that they can rely on computer which has Intel chip inside. The campaign has been successful and since 2002, Intel has been earning high rewards .In present times when growth is overall slow, Intel is still growing at a rate of 15 percent. For a consumer Intel does not come cheap, they have to pay extra to owe Intel brand. Consumers can buy AMD at much lesser price, but AMD has been less successful in creating its image. Intel is on the winning side and has a large chunk of loyal customers, who trust its brand only (David, 1995). Brands are developed in their unique niche. If some brands are associated with active life such as Nikkei, others are associated with glamour and urban life. One such brand is Zara, which does not believe in bulk production, instead it emphasis on individualization of its products. The consumers who use its apparel are conscious of the fact, that they look different and are not wearing copies of the similar products which they see around (Nilson, 2003). Zara is building its success around this strategy and in 2004 it opened 97 new stores. The reason for her success is not selling apparel (garments) at lower price, but the success is charging more from urban population world over and giving them a unique identity. The reasons for paying extra to Zara are numerous. For example Zara focuses on shorter response time, which enables it to meet the constantly shifting fashion trends. Zara does not target to specific age group nor does it divide customers into segments, instead it markets to a broader market. By targeting to international market Zara has an edge over its competitors, as it does not need to strip down into class and gender and age group, but focus on one large group. Zara broader segment is educated and young, which likes fashion and changing trend; this is what Zara is offering to its global audience. Zara marketing philosophy is simple, target the global audience with a belief that consumer will pay extra price, if they get the right product (CNN, 2001). A similar example can be found in Ralph Lauren's, whose customers strongly believe that RL brand symbolizes a posh and upper-class lifestyle. It is possible that a shirt at RL store can cost $200, but consumers are willing to pay to have RL brand, because they associate themselves with RL and pay the price for the being RL class, not for the shirt only. The net result is becoming RL class, which only selected few can afford. Sports and sports celebrities have been used in media for brand development especially among younger consumer segment. The sport celebrities stand as a role model for younger consumer. In recent years advertisers have been paid millions to wear a certain brand, such as Tiger Woods wearing Nikkei apparel. Such tactics enhances the image of the products. The purpose of advertisement is not to tell price, but to inform the consumer of a product existence. For example the greatest amount of money to advertising companies is paid by all the top brands. The whole purpose is to create an image, which is associated with the product. This process of creating an image or association around a product is making the product more acceptable among consumers and making it different from rival companies and make the consumers pay more for a branded product (Bush & Victoria, 2004). For any new company, when it enters the market, there are two options to stimulate the growth; intensive advertising campaign, and offer products with unique functions. Samsung opted for both, but it tilted more towards advertising and brand making strategy. It created awareness of its name by investing enormously in million-dollar brand campaigns. Samsung was an unknown. In order to create its brand awareness, Samsung in India signed seven cricket celebrities and in doing this it aimed to cash on the popularity of cricket in India. Instead of just adds featuring cricketers; Samsung launched its “Team Samsung India” campaign all over India. The focus of this concept was to create patriotism through cricketers but under Samsung brand name as the banner read “'With Team Samsung, It's India First.’ Samsung hugely invested in sports, as it knew that sports have crowds. In Athens 2004 Olympic games, it was named as Worldwide Wireless Communications Partner of the Olympic games, but not without a cost. Samsung provided 14000 mobile phones and also supported equipment during the games. They also presented themselves in the Olympic Torch Relay, which took place in 27 countries. They also showcased their products for 17 days to the visitors at Olympic eve and also allowed 30,000 minutes of free calling grabbing the audience to its brand (Samsung, 2004). However nothing is free, Samsung spends $3 billion on keeping its brand image alive among consumer. Within three years time Samsung’s brand value has more than doubled from US$5.2 billion in 2001 to its current $10.8 billion, which is higher than Sony. The reason for this success is Samsung’s holistic approach to develop several brand strategies in different regions of the world to lure consumer and let them buy the Samsung brand (Samsung annual report,2004). A good brand is not just a product, but it has a personality of its own. The consumers are willing to pay high price not just because of having a name, but they also owe the prestige, power and personality of the brand (Mare, 2006). For example, Lauder built her brand by offering customers free makeovers, demonstrating her products, and providing a sense of elegance. As her brand grew, she translated these qualities into her brand by training her sales force, who would stand only for one aim, Lauder. The salesperson knew, what the customer want, and this understanding came by paying a price, which is higher than normal cosmetic products. The customers do not mind paying extra as they enjoy Lauder and its attached benefits (Roth, 1995). The lifestyle brands represent consumers lifestyle and normally consumers have emotional attachment with such brands regardless of its price and benefits (Saeed & Terrence,2005). For example, mobile phone is an inevitable personal device in modern life (David, 1995). To talk of mobile, it is unthinkable to forget Nokia for the reason that it is the top brand. Its price is higher than rival brands, however there are reasons for paying extra to have a Nokia. For example Nokia has been leader of the market from day one. It appeared at a time when there was no rival; it was leading the market and is still leading the race. In early days of mobile phones, it was Nokia, which was known as phone. Nokia is considered user friendly, it has a unique design and innovative features and comes with consistent improvements in every model, which keeps it ahead of other brands. Its rivals such as Samsung, Motorola and SonyEricson have been working hard to match its standard but without any success due to many reasons. Nokia has a unique design and it has a style to which its loyal customers are hooked up. Brands are often associated with some thing higher in life, idealizing beauty or bravery or courage (James, 2000). Cigarettes advertisements often associate courage, bravery and freedom with smoking. There are few companies as successful as Marlboro, whose trademark is valued at $39 billion. It portray itself often through cowboy images in countless add, portraying freedom and be in control of life. Behind this success is its being premium cigarettes brand. Even its packing is unique and bold, carrying distinctive features of red and white colors which is consistent across the globe and meant for instant recognition. Even though its price is higher than normal cigarettes, but its Marlboro effect, which counts for its loyal customers. There was a time when Las Vegas was associated with gambling only, but in 1990s, it moved beyond that image and now Las Vegas stands for freedom, enjoyment and entertainment. These values of freedom creativity and independence do not come cheap, it cost money, which young and old all are willing to pay. Even though the city stands in the middle of desert, but it is symbolic image makes it sell all over the world. For a lot of Americans going to Caribbean on vacations is a dream come true, while the reality is there can be better hotels and beaches inside US, but Caribbean image has been successful to portray this image of listless life on a far away island, remote and cut off from the urban buzz. The price of such peace comes at a premium price of at least $3/4000 per person, which many Americans are willing to pay (Nilson, 2003). CONCLUSION Whether the product is an automobile, a soft drink, or laundry detergent, successful companies long have considered the concept of brand loyalty the Holy Grail in the world of consumer marketing. By delivering self-expression and emotional benefits, brands make common commodities unique and meaningful for their consumers. Thus a simple T-shirt of Tessco or Nikkei can mean freedom, a simple skirt from Zara mean being a different individual or an expensive gown from RL can give the feeling of posh and high class life. However, this comes at a premium price which today’s consumers are willing to pay and buy the branded items for their symbolic meaning they carry. The growth of brands has been enormous as has been discussed in detail through examples of computers, phones and electronic gadgets etc. The brand phenomenon is a dream far from Ford massive production, which capitalized on massive production and cheaper products. With increase in the consumer wealth, there is shift for individuality. Consumers want to be known through their separate identities by using brands which provide them a different status and unique identities. Brands are successful not because of massive production, but due to limited production, BMW, Zara, Rolex are few examples who are making profit due to lesser production. Man from the time immemorial has desired to look different from others in many ways. In the past it was tattoos and jewelry, which gave different looks to human beings, today branding is giving that uniqueness making consumers different from each other but at price REFERENCE Bush & Victoria.(2004). Sports celebrity influence on the behavioral intentions of generation y. Journal of Advertising Research, 44 Nilson, T. (2003). Customize the brand: make it more desirable and profitable . : Wiley. J,Cathy & C,Walgren, . (1995). Brand equity, brand preference, and purchase intent. 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