The Naive Marketer and Consumer

Does price really affect brand image?

Most of us have been led to believe that high pricing enhances brand image and conversely low pricing affects brand image. This is the reason why marketers fear to be the lowest priced brand in a category or do frequent price-led communication.  Is this fear well founded?

What a brand sells isn’t price; but value. Consumers evaluate a brand by the value it offers and not by the price at which it sells. The purpose of any brand, therefore, is to create unique value that consumers would be willing to pay for. A brand that can offer this value at the least possible price would be the most preferred brand.

Consumers expect more value from a high priced brand and less from a low priced brand. This is how price and value are co-related. A brand that helps consumers rationalize, articulate and experience this value would be a “value for money” brand. Price by itself is not the value. A brand that does not offer any value would be perceived to be expensive, even if it isn’t. Sales of such brands would not increase even when there is a price drop.

The role of marketing communication is to make consumers want and prefer the value offered by a brand. Since price is relative to value, it is important to promote price along with value. Brand image would suffer only when a brand fails to communicate the value it offers for its price.

Brand image should have the least consideration in pricing decisions. Price should be a function of a brand’s target audience, context (business objective, brand life stage, product life stage, consumer life stage, and competitive environment), and cost and desired margin.

The notion that high priced, expensive brands have a better brand image is incorrect. Brands like Pepsi, Coca Cola, McDonalds and many others aren’t expensive; yet they have a good image. Apple iPhone’s image hasn’t suffered despite the many price reductions it has announced. Wal-Mart has built its business and brand image on the brand promise of “always low prices”.

My earlier post “What is value for money?” might also be of interest to you.

Marketing priority for social media success

The primary difference between traditional media and new media is that the former is channels for brand communications and the latter for consumer conversations. Brands are struggling to come to terms with this new reality that consumers now have as much freedom, control and influence as brands do, to communicate and be heard and that the consumers' voice and content are far more credible and potent than a brand's. Brand led push marketing is yielding ground to consumer generated brand content on social media. Some brands have learned this the hard way.

 

In response, brands are busy formulating social media strategy of placing banners, posting videos, creating social media IDs, and blogs, forming groups and communities on social media platforms. The strategy even extends to seeding content, bloggers, forum activists and hiring of specialists to manage on-line reputation.

 

Will this guarantee social media success?

 

Consumers are unlikely to start a brand conversation or create a brand content on their own. They would do so only in response to a brand stimulus. While the conversation and content are not in the control of the brand, the stimulus is. By providing the right stimulus brands can influence and lead social media conversations.

 

We do not live in two mutually exclusive worlds called offline and on-line. The reality of one extends to the reality of the other. This is true for brands also. The reality of tangible offline brand experiences like purchase, consumption, customer care interactions, etc will form the stimuli for brand conversations.

 

A social media strategy, therefore, is just not about communications and media, it is also about creating and delivering experiences across brand touch points (not different from the strategy brands needed before social media). If these brand experiences are consistent, remarkable and unique consumers will voluntarily replay and amplify these experiences.  The volume, sentiment and tone of the conversations will depend on the relevance and nature (positive and negative) of these brand experiences.

 

Building an active social media presence without an equally committed focus on improving tangible brand experiences could be detrimental to the brand. Brands should bear in mind that the best of communications and media strategy for social media will not be enough to cover-up for or overcome shortcomings of real brand experiences. Nor is it possible to manipulate and manage social media like traditional media and PR can be.

 

Marketing’s only priority is to provide the right stimuli, consumers will take care of the rest.

Advertising: Stop persuading, start reinforcing.

To persuade is to succeed in causing a person to act in a certain way, argue into, bring around, and prevail upon, to change another's beliefs or course of action by arguing or reasoning.

People have deep pre-conceived perceptions, beliefs and views of all that is important to them. These beliefs and views are what define their individuality and makes each one of them unique. To challenge these beliefs or to persuade them to change their beliefs to that of another person's, especially when that change benefits the other person, is not prudent.

People's instinctive reaction to persuasion is to resist, defend and reject even when they are wrong. If someone does succeed in overcoming the resistance, they might concede reluctantly after repeated attempts, but dislike that person forever for making them feel small or wrong about what they believed or felt was right in the first place.

This is the reason why I believe persuasive advertising is not good. Consumers will resist or reject advertising that attempts to change their beliefs and views, make them feel bad about themselves. If the advertisement does manage to persuade them, the brand might still not gain as consumers might not buy that particular brand (dislike the brand for making them feel bad) but another from the category.

People do not seek to be proved wrong; rather they seek approvals and compliments. It makes them feel vindicated and good about themselves. People like people who are like themselves, who like things that they like themselves.

Similarly, advertising that reinforces what the consumers already believe of the brand is likely to be more effective. Besides increasing brand affinity, such advertisements would also require less time and resource in comparison to those aiming to persuade.