Strong brands enable companies to enter new markets and categories. They allow businesses to command premium prices for their products and retain talented staff. They can also help companies to outperform the market and retain market share, during both good and difficult times. With proper management, brands — even premium brands — protect companies against risk in recessionary times.
Brands are living assets that grow and change. Those brands that take advantage of opportunities are able to better position themselves amongst their competitors.
Have you ever wondered how Coca-Cola has grown from selling 9 bottles in its first year of business, to 1.9 billion servings per day? Or why eight of the world’s ten best-selling smart phones are made by either Apple or Samsung?
And have you ever thought about why some people will willingly pay more for a drink or a particular model of mobile phone or even a washing machine over another brand, even if the product differences are not always obvious? In pricing simulation tests, where we deliberately mask the brands of the products we are testing, we often find the expected price band changes when the brands are revealed. Chinese consumers, for example, are willing to pay more for a washing machine made by Whirlpool than when the exact same machine is branded as by local manufacturer Haier.
These are all examples of the power of a strong brand.