Today the thick, definite line that exists between brands and commodities is getting blurred. The middle class invasion brought together by the two most emerging economies of the world, China and India, has forced the world to provide the best products at a cheap price. This has led to a proliferating warfare based on discounts, literally eroding the margins in the process.
With the ever increasing competition and clutter in today’s world, holding on to margins and consumers’ loyalty has become highly imperative. However, marketers are stuck in a dilemma of either keeping off this discount warfare and thereby maintaining the margin and customer loyalty, which would push them further backwards in the race or getting their hands dirty by stepping into this war and staying abreast of the competition.
Therefore, the question that arises in front of them is how to get out of this vicious circle? Marketers should take a leaf out of the books of brands like Apple and Coca-Cola to find a way out of this rut.
The two primary reasons due to which consumers today pay a premium are a.) Aesthetics and b) Emotions. Have a look at the brands around you which command a price or an image premium. You would observe that these brands hold on to either aesthetics or emotions or a combination of both.
Luxury brands like Gucci, Armani, D&G are classic examples of brands that exhort premiums out of people by selling aesthetics. Right from designing the product to positioning them and to merchandising, a consistent, visual or sensory appeal can be seen which certainly overides the rational aspect. While products and technologies are commodities in the market, aesthetics is something that commands a premium, making the consumers pay a little to a lot for this differential.
From Harley Davidson to Cadbury, from Mercedes to Johnson & Johnson there are many brands that connect with their audience on an emotional basis. Why do grown up men cry when they lose their Zippo? Why do people kill themselves to own a Harley? Why do we forgive even if there are worms spotted in our Dairy Milk Chocolate?
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An emotional bond with the consumers buys blind faith, loyalty and willingness to pay more. Neither Apple sells technology nor does Cadbury sell a glass and half of milk.
(The author is National Creative Director, Leo Burnett)