by Steven Feldman
We refer to this edition of FCNews as our Power of Brands issue. We publish one of these every year, because you can’t overstate the importance of a brand. While we tend to focus on manufacturer brands here, it is paramount for every retailer to develop its own brand within its marketplace.
Here’s why. The importance of brand in consumer purchasing decisions has increased significantly in the past decade, while the influence of price declined. In interviews conducted in 31 countries, 59% of consumers now say brand alone is an important purchasing determinant, compared with only 7% who say price alone is important. The preference for brand alone remained strong even during the recession. This positions specialty retailers in good shape vs. the Lumber Liquidators, Empires and home centers of the world.
If you want to grow your business, you need to be something consumers can get behind, and for that, you need to have a company image. Every retailer has a brand; some are just more successful than others.
So what exactly is a brand? In simplistic terms, it is a consistent message of who you are. It’s your business’ identity. This identity is not about a logo; it’s about something people can relate to, associate with, something which will resonate with customers to keep them coming back and recommending you.
A good brand:
•Delivers your message in a clear and concise manner
•Connects you with the customer and motivates her to revisit you
•Increases your credibility
You can build your brand around a number of attributes. Here are a few:
1.Value: Consumers are shopping. But they’ve adopted a new attitude toward consumption—they don’t want cheap; they want value. Brands that have appreciated in value are Uniqlo and IKEA, which combine quality with price into an appealing value proposition.
2.Quality: Quality is a vital ingredient of a good brand. Remember the “core benefits”—the things consumers expect. These must be delivered well, consistently. The nationally branded retailer that continually disappoints will never develop brand equity. Research confirms that, statistically, higher quality brands achieve a higher market share and higher profitability than inferior competitors.
3.Positioning: Strong brands have a clear, often unique position in the target market. This can be achieved through several means, including brand name, image, service, shopping experience, product guarantees, installation, after-sale follow-up and more. In fact, successful positioning usually requires a combination of these things.
4.Repositioning: Repositioning occurs when a brand tries to change its image to reflect a change in consumer’s tastes. This is often required when a brand has become tired, its original market has matured or has changed. Think KFC. With everyone so concerned about health these days, a fast food restaurant called Kentucky Fried Chicken may not be the wisest moniker. And then there’s J.C. Penney. The brand became tired, maybe had a “cheap” connotation attached to it. Now it’s just jcp.
5.Marketing: Marketing also plays a key role in building a successful brand. All elements of the promotional mix need to be used to develop and sustain customer perceptions. Initially, the challenge is to build awareness, then to develop the brand personality and reinforce the perception.
6. Long-term perspective: This leads to another important factor in brand building: the need to invest in the brand over the long term. Building customer awareness, communicating the brand’s message and creating customer loyalty takes time. This means that management must invest in a brand, perhaps at the expense of short-term profitability.
Remember, consumers have little patience with brands that violate trust. They publicize bad experiences immediately and widely on social media. When you are facing damage control, it’s too late for the reputation conversation.
Reputation is a core strategic concern. No brand gets a free pass.