By Matthew Spieler
In this fast-pace world of constant change and countless number of advertising impressions being see each day, the importance of offering well-recognized, highly trusted brands has become greater than ever. Every year, there are many research projects done to test the theory of brand strength versus buying habits, the monetary value a brand has, and a host of other things. And, whether these studies are done by the companies that own the brand or an outside source, one thing is clear: Brands, whether you own them or sell products under the name, add to a business’ bottom line.
In fact, the importance of being affiliated with a top-quality brand is even greater during tough economic times. A recent report, “Beyond Trust: Engaging the consumer in the post-recession world,” noted despite the recession creating a new consumer mindset when it comes to spending, “With the shift in consumer attitude, brand leadership became more important last year…As life became even more stressful and complicated, [consumers] welcomed the signposts of quality and reliability that brands provide. Familiar and trusted brands that delivered on their promises provided an element of certainty in a turbulent time.”
As a result, “many brands maintained and grew their value, even when selling at premium prices.” The study was produced by Millward Brown and The Futures Co., and is based off data from BrandZ and its most recent Top 100 Most Valuable Global Brands report.
It was noted during the height of the recession last year with people worrying about keeping their jobs and paying their mortgages, most did not consider price alone when making a purchase. Extensive studies bear out that even during trying times such as these, brands that created a strong appeal still commanded a price premium. In fact, only 7% of consumers bought on price alone. “The most valuable brands balance quality and value, whether at a high or low price,” according to researchers.
Brief history
When talking about brands and what they do and offer, remember the whole concept of brands has been around for thousands of years. In the most basic concept, people—ranchers and craftsmen in particular—have used initials, a symbol or another unique mark to identify their work and would either burn or etch it into their belongings such as cattle, or handiwork, be it jewelry, silverware or some other creation.
Over time, consumers started to seek out the livestock, pottery, furniture, etc. bearing certain marks—brands—because they identified it with things they liked.
Still, the concept of using a brand as a marketing tool really came into existence following the Industrial Revolution and, more precisely after World War II. New communication systems, and improved modes of transportation made it easier and necessary for companies to advertise their brands over larger regions.
Of course, the legal system followed with laws that recognize and protect brand names and, thus paving the way for branding to become part of life.
Top brands growing
According to BrandZ, which has been ranking the monetary value of brands on a global scale since 2006, the worth of the Top 100 has grown 40% to an estimated worth of $2.04 trillion. When measured against the S&P 500 over this five-year period, the brands portfolio has grown 18.5% in value compared to 11.5% for the stock index.
“[This] positive performance… provides corroborating evidence that strong brands are resilient,” BrandZ notes. “They not only maintain their value but can appreciate significantly in value even during the most trying economic circumstances.”
This should not come as a surprise. In 2007, as the recession was taking hold, Derrick Daye and Brad VanAuken of Branding Strategy, said, “In an over-complicated world, we search for simplicity wherever we can find it. And great brands provide that in spades.”
Why is this the case? Day and VanAuken feel brands are “simply an efficient means to an end. And powerful brands are those that stand for and represent a distinct category or concept in consumers’ minds.”
In the “Beyond Trust” report, the authors note, “Brands serve their owners by allowing them to cultivate customer recognition of, and loyalty toward, their offerings. Brands also serve the consumer by supplying information about the quality, origin and value of goods and services. Without brands to guide buying decisions, the free market would become a confusing, faceless crowd of consumables. An established and respected brand can be the most valuable asset a company possesses.”
These feelings and those of others who have studied brands appear to be correct as research on consumer behavior has shown. Dr. Ovidiu Moisescu, who has researched the importance of brand awareness in consumers’ buying decisions and perceived risk assessment, concluded most consumers “would prefer buying brands that are familiar to them.”
While this is encouraging news to retailers who offer known consumer brands, not all brands are equal when it comes to perceived value, quality, trust and any number of other factors end users assign a product. Not to mention the fact there are more than a half million brands legally registered around the world—and the countless other generic names that inundate consumers on a daily basis.
Standing out
So just how does a brand come to stand out in such a crowded field? Here is where things get a little murky, as the factors that go into a brand’s success are intangible, such as trust and value. In the simplest form, a consumer agrees to select a particular brand over others based primarily on its reputation/promise. These promises can be implied or explicitly stated.
Price, accessibility or other factors can lead a person to occasionally stray from her brand, but until something “better” comes along, she will inevitably return to the product she perceives as right for her.
In “Beyond Trust,” the authors point out “the buyer may even pay a higher price for the goods or services because of [her] commitment, or passive agreement, to buy the brand.”
The point is, for a brand to stand out and rise to the top, the company or person behind it— think Tiger Woods—needs to promise the buyer it will do what it says it will do. In other words, the product will deliver what is promised of it.
Small business help
When most people think of brands, the first thing that usually comes to mind is the multinational, global names that dominate everyday life. But, the fact is, even the most powerful brands cannot exist if not for what happens at the local level.
Think of it this way, there are different categories or levels when it comes to the whole concept of branding. These types of branding strategies, all designed to build equity in the name are also referred to as family branding, individual branding and combination branding.
For example, brands can represent a manufacturer, such as Toyota or Kodak, or they can represent a particular product within that brand, such as Toyota’s Camry or Kodak’s Kodachrome—referred to by experts as a dealer brand. Theses two can also be tied together to represent a single brand, such as Coca-Cola or Kleenex.
Taking it a step further, there are brands similar to these but only known in a particular market or region, or a company may market a product under different names depending on the region. For example, think of the most popular brand of mayonnaise. People east of the Rockies will say Hellmann’s, while those on the west side will cite Best Foods. The thing is, while each started out separately, since 1932 they have been produced by the same manufacturer.
As such, brands of all sizes are important for small businesses as they not only give the store a way to differentiate itself from companies that only sell commodity items, they give customers an immediate impression of the operation.
From this, it is imperative for dealers to select the right brands for their individual market(s). Just because you carry a well-known product does not guarantee success. Think of the mayonnaise example. Say you move from California to New York and open a store. Because of your connections, you can get Best Buy mayonnaise sent to you cheaper than for what you can get Hellmann’s. The problem is, unless someone walks in who happened to live out west, no customer will identify with the brand and most will walk out and go down the street to get the jar with a Hellmann’s label.
Along with the products being carried, brand power comes from the store itself and the people who work for it. Just about everyone can point to a successful small business with a strong reputation in the town it serves, yet go outside of their local market and these operations fall into obscurity?
These businesses have established long-standing relations with local citizens based on an outstanding reputation. This reputation, like that of product brands that have gained prominence, has been built on trust.
And, due to the recession, BrandZ says the trust factor, paired with recommendation, has risen to a new standard in helping brands “realize their full power.”
A 24-country study revealed brands having the highest “TrustR” score enjoyed:
• A customer bond 10 times greater than the average.
• The likelihood of being purchased nearly seven times greater than the average.
• The likelihood of short-term, market-share growth.
Having a successful brand is one thing, but experts warn once loyalty is established a company needs to work “to maintain its presence with consistent quality and competitive responses to new market entrants and existing competitors.”
That is why experts and business coaches recommend small business aligns with brands that are well known by their customers. In addition, offer products that may be well known/respected within the industry and allow you to enhance your local name and reputation.
Fortunately, within the flooring industry there are numerous brands retailers, contractors, designers, specifiers and others can offer that fit one or both of those billings—end user and/or industry recognition.
The companies/brands highlighted around this story are just a small representation of the various options available to our readers. While some brands cross through all or some of the flooring categories, there are many that have carved out a successful reputation focusing on a single product category.
In this fast-pace world of constant change and countless number of advertising impressions being see each day, the importance of offering well-recognized, highly trusted brands has become greater than ever. Every year, there are many research projects done to test the theory of brand strength versus buying habits, the monetary value a brand has, and a host of other things. And, whether these studies are done by the companies that own the brand or an outside source, one thing is clear: Brands, whether you own them or sell products under the name, add to a business’ bottom line.
In fact, the importance of being affiliated with a top-quality brand is even greater during tough economic times. A recent report, “Beyond Trust: Engaging the consumer in the post-recession world,” noted despite the recession creating a new consumer mindset when it comes to spending, “With the shift in consumer attitude, brand leadership became more important last year…As life became even more stressful and complicated, [consumers] welcomed the signposts of quality and reliability that brands provide. Familiar and trusted brands that delivered on their promises provided an element of certainty in a turbulent time.”
As a result, “many brands maintained and grew their value, even when selling at premium prices.” The study was produced by Millward Brown and The Futures Co., and is based off data from BrandZ and its most recent Top 100 Most Valuable Global Brands report.
It was noted during the height of the recession last year with people worrying about keeping their jobs and paying their mortgages, most did not consider price alone when making a purchase. Extensive studies bear out that even during trying times such as these, brands that created a strong appeal still commanded a price premium. In fact, only 7% of consumers bought on price alone. “The most valuable brands balance quality and value, whether at a high or low price,” according to researchers.
Brief history
When talking about brands and what they do and offer, remember the whole concept of brands has been around for thousands of years. In the most basic concept, people—ranchers and craftsmen in particular—have used initials, a symbol or another unique mark to identify their work and would either burn or etch it into their belongings such as cattle, or handiwork, be it jewelry, silverware or some other creation.
Over time, consumers started to seek out the livestock, pottery, furniture, etc. bearing certain marks—brands—because they identified it with things they liked.
Still, the concept of using a brand as a marketing tool really came into existence following the Industrial Revolution and, more precisely after World War II. New communication systems, and improved modes of transportation made it easier and necessary for companies to advertise their brands over larger regions.
Of course, the legal system followed with laws that recognize and protect brand names and, thus paving the way for branding to become part of life.
Top brands growing
According to BrandZ, which has been ranking the monetary value of brands on a global scale since 2006, the worth of the Top 100 has grown 40% to an estimated worth of $2.04 trillion. When measured against the S&P 500 over this five-year period, the brands portfolio has grown 18.5% in value compared to 11.5% for the stock index.
“[This] positive performance… provides corroborating evidence that strong brands are resilient,” BrandZ notes. “They not only maintain their value but can appreciate significantly in value even during the most trying economic circumstances.”
This should not come as a surprise. In 2007, as the recession was taking hold, Derrick Daye and Brad VanAuken of Branding Strategy, said, “In an over-complicated world, we search for simplicity wherever we can find it. And great brands provide that in spades.”
Why is this the case? Day and VanAuken feel brands are “simply an efficient means to an end. And powerful brands are those that stand for and represent a distinct category or concept in consumers’ minds.”
In the “Beyond Trust” report, the authors note, “Brands serve their owners by allowing them to cultivate customer recognition of, and loyalty toward, their offerings. Brands also serve the consumer by supplying information about the quality, origin and value of goods and services. Without brands to guide buying decisions, the free market would become a confusing, faceless crowd of consumables. An established and respected brand can be the most valuable asset a company possesses.”
These feelings and those of others who have studied brands appear to be correct as research on consumer behavior has shown. Dr. Ovidiu Moisescu, who has researched the importance of brand awareness in consumers’ buying decisions and perceived risk assessment, concluded most consumers “would prefer buying brands that are familiar to them.”
While this is encouraging news to retailers who offer known consumer brands, not all brands are equal when it comes to perceived value, quality, trust and any number of other factors end users assign a product. Not to mention the fact there are more than a half million brands legally registered around the world—and the countless other generic names that inundate consumers on a daily basis.
Standing out
So just how does a brand come to stand out in such a crowded field? Here is where things get a little murky, as the factors that go into a brand’s success are intangible, such as trust and value. In the simplest form, a consumer agrees to select a particular brand over others based primarily on its reputation/promise. These promises can be implied or explicitly stated.
Price, accessibility or other factors can lead a person to occasionally stray from her brand, but until something “better” comes along, she will inevitably return to the product she perceives as right for her.
In “Beyond Trust,” the authors point out “the buyer may even pay a higher price for the goods or services because of [her] commitment, or passive agreement, to buy the brand.”
The point is, for a brand to stand out and rise to the top, the company or person behind it— think Tiger Woods—needs to promise the buyer it will do what it says it will do. In other words, the product will deliver what is promised of it.
Small business help
When most people think of brands, the first thing that usually comes to mind is the multinational, global names that dominate everyday life. But, the fact is, even the most powerful brands cannot exist if not for what happens at the local level.
Think of it this way, there are different categories or levels when it comes to the whole concept of branding. These types of branding strategies, all designed to build equity in the name are also referred to as family branding, individual branding and combination branding.
For example, brands can represent a manufacturer, such as Toyota or Kodak, or they can represent a particular product within that brand, such as Toyota’s Camry or Kodak’s Kodachrome—referred to by experts as a dealer brand. Theses two can also be tied together to represent a single brand, such as Coca-Cola or Kleenex.
Taking it a step further, there are brands similar to these but only known in a particular market or region, or a company may market a product under different names depending on the region. For example, think of the most popular brand of mayonnaise. People east of the Rockies will say Hellmann’s, while those on the west side will cite Best Foods. The thing is, while each started out separately, since 1932 they have been produced by the same manufacturer.
As such, brands of all sizes are important for small businesses as they not only give the store a way to differentiate itself from companies that only sell commodity items, they give customers an immediate impression of the operation.
From this, it is imperative for dealers to select the right brands for their individual market(s). Just because you carry a well-known product does not guarantee success. Think of the mayonnaise example. Say you move from California to New York and open a store. Because of your connections, you can get Best Buy mayonnaise sent to you cheaper than for what you can get Hellmann’s. The problem is, unless someone walks in who happened to live out west, no customer will identify with the brand and most will walk out and go down the street to get the jar with a Hellmann’s label.
Along with the products being carried, brand power comes from the store itself and the people who work for it. Just about everyone can point to a successful small business with a strong reputation in the town it serves, yet go outside of their local market and these operations fall into obscurity?
These businesses have established long-standing relations with local citizens based on an outstanding reputation. This reputation, like that of product brands that have gained prominence, has been built on trust.
And, due to the recession, BrandZ says the trust factor, paired with recommendation, has risen to a new standard in helping brands “realize their full power.”
A 24-country study revealed brands having the highest “TrustR” score enjoyed:
• A customer bond 10 times greater than the average.
• The likelihood of being purchased nearly seven times greater than the average.
• The likelihood of short-term, market-share growth.
Having a successful brand is one thing, but experts warn once loyalty is established a company needs to work “to maintain its presence with consistent quality and competitive responses to new market entrants and existing competitors.”
That is why experts and business coaches recommend small business aligns with brands that are well known by their customers. In addition, offer products that may be well known/respected within the industry and allow you to enhance your local name and reputation.
Fortunately, within the flooring industry there are numerous brands retailers, contractors, designers, specifiers and others can offer that fit one or both of those billings—end user and/or industry recognition.
The companies/brands highlighted around this story are just a small representation of the various options available to our readers. While some brands cross through all or some of the flooring categories, there are many that have carved out a successful reputation focusing on a single product category.
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