Brand Investment Contribution and Positional Advantages - Essay Example

Download file to see previous pages According to Maslow’s hierarchy of needs buyers’ needs vary from physiological to self-actualization. A product like a car is required to fulfill the needs like social needs and esteem needs. Brand image and value play a very crucial role as a decider in fulfilling such needs. Car is not like a product that one can go to a retail store and carry home. Well, the competitive environment has in fact made things almost similar. Unlike the days when a car was to be booked in advance by the consumer and then he was supposed to wait for its delivery, for periods ranging from weeks to months. At that time, there used to be a limited number of carmakers in the market.

But now there are a number of players in the market, ready to offer the consumer easy financing and a variety of models to choose from. It is almost like off-the-shelf buying, but with the difference that the customer plans his purchase decision well in advance. After comparing different brands, prices, etc, the customer arrives at one particular model and then heads off to the car showroom. The brand name plays a very crucial role at this point in time. Being a social animal, buyer behavior is deeply rooted in psychology guided by dashes of sociology, which effectively means that the buying behavior will be guided by the influences from his surroundings. An established brand helps in generating more revenues for the company, as the customer appears to be willing to pay a premium price for a premium brand.

The car market in general and the premium segment, in particular, take good advantage of this perception. Higher value brands leave enough room for transferring the brand value. Often companies like Mercedes, Nissan, GM, etc. strategically offset their lower profit margins at the lower price end with higher profit margins from the luxury car segment. For the willing customer, paying an extra amount for the brand brings with it the quality, satisfaction, reliability, prestige, and a feeling of ‘unique identity. There’s apparently enough justification for the premium pricing as well. The kind of investments that are put into marketing communication efforts for establishing a brand ...Download file to see next pages Read More