By Prof. Steven Levine
You have created, what is in your mind, a breakthrough product, like no other. There have been products similar to yours, but your product takes this particular field to a whole new plateau, leaving your competition in the dust. You are excited about your breakthrough and feel that your customers will feel the same way, but will they?
This is where Branding and perception enters into the picture. A definition of Branding might be: When people hear or think about your product, these are the images that hopefully will come into their mind: dependable, expensive (what does that say about the individual who purchases it?), an emotional attachment (when I use this product, it makes me feel good, makes me happy?) good quality, great design, reliable … features that people always wanted, but were never able to find in an available product up to now. One of the biggest issues of Branding a product or a business (think McDonald’s) is name recognition in the particular target market (the people who will purchase your product) where you are going to penetrate and expand. Does the culture of the market that you are trying to penetrate fit with the concept and benefits of your Brand? The Branding process can be expensive, because you are trying to get your product into people’s thinking, without any real conscious effort on their part. When people see the golden arches, at two or 90 years of age, they have a certain expectation of the quality of the product, the price and the service. This concept of Branding and name recognition, is why many individuals who want to start their own business chose the franchise concept, since one of the most important factors is the name recognition.
There is a trap associated with Branding and perception that many manufacturers and business owners often overlook. One of the critical factors in developing a successful business often is volume and the profitability associated with it.
As an example of this trap, let’s take a product that most people are familiar with; the Rolex watch. People purchase a Rolex, not to tell time, since you can purchase a watch for five dollars which will do the job, but rather for the perception. This company has spent huge amount of money and time promoting the concept that when you have a Rolex, you have achieved great success in whatever field you are engaged in. But supposing, in an effort to increase their sales volume, Rolex introduced a watch that retailed for $300. As soon as that happens two immediate results occur; the first thought is that there must be something wrong with the watch, or something is missing. But the biggest impact is on perception. People that used to purchase a Rolex, because of what it represents, will look to other brands. The perception that “you are successful so that now you can finally purchase a Rolex” is seriously damaged.
The conclusion from this brief introduction to Branding should be that before you price your products, promote their attributes, and think very carefully about what the effect these decisions will have on how people, and not you, view the product.
Steven Levine teaches Accounting and Business at Nassau Community College. He has an MBA from Baruch and has owned his own business and worked for Pfizer and Mobil Oil, as well as very large electrical distribution firms.