The Value in a Brand Name

There was a good post over at Mashable today called What’s the Value in a Brand Name? Working for an advertising agency, the term “Brand Awareness” is thrown around quite often. And even if people don’t know exactly what it means, they know it’s important.

I like the definition given in the aforementioned post about what brand awareness is, simply put:

a brand’s value is simply about the extent to which it can sell its goods and services at a premium price

You’ll hear many different ideas on the benefits of brand awareness, but it ultimately comes down to the ability to charge more than your competitor for the same or similar product. A great example in the mashable post is Coke, but other examples could include Apple, John Deere, Bosch, Oakley or a host of other brands considered premium. Not to say that these companies haven’t earned their brands, they have, but in doing so they are able to collect higher margins on their products.

One thing we talk about often at work is how much the impact of brand awareness is decreasing. We all agree that the information age of the internet and social media is lessening the impact of brand awareness, where we differ in opinion is in how much. Now that consumers have access to more information than ever such as user reviews, peer recommendations and competing products, users don’t need to rely on brand names as much in their purchasing decisions.

I’ll preface my thoughts by saying that I have about as little brand loyalty as anyone. My house is a mix of Macs and PCs, running all sorts of various operating systems. Three TVs: a Toshiba, JVC and Panasonic. Eight bikes in the garage, all different brands. I make every purchasing decision based on research for that specific need. I typically don’t assume that because I had a positive experience with a product in the past that a new product made by the same company will give me the same level of satisfaction. I can’t think of a company, aside from Toyota, where I’ve never had a negative experience. As a result, I usually don’t let brand play a part in my buying decisions. I don’t need to. The internet is full of reviews and recommendations that mitigate the need to rely on any sort of trust, I can base decisions on other people’s actual experiences.

All that said, just tonight while looking at dishwashers online with my wife I found myself looking at the brand name dishwashers and glazing over the brands I didn’t recognize. The site we were looking at didn’t have user reviews displayed with the listings. So take that for what it’s worth. In the absence of the reviews and recommendations I rely so heavily on, my natural instinct was to look at the brand name. This tells me that brand awareness is still very important for products where people:

  1. Don’t research their buying decisions (Coke, Doritos, Budweiser)
  2. Don’t have access to peer reviews on products (Niche markets, items that aren’t usually purchased online, etc)
  3. New products that don’t have the volume of user reviews yet

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