As I start the process of reviewing new findings from the BrandZ research on the trade-off consumers make between their desire for a brand and its price – what we might call the value proposition – I am struck by how important obtaining value is with consumers around the world.
The top 10 global 'value' (or price driven) brands achieve more than twice the market share of the average brand and have growth prospects that are also twice as favourable (as measured by the BrandZ 'voltage' metric). The 'clarity' of what these brands stand for is also significantly higher than average. In times of recession, even a double dip, the equity (or level of brand 'bonding' that consumers achieve with a brand) of these most price favourable brands is nearly three times the average. The guarantee of a good deal is quite seductive.
But the brands that attract consumers because they are really desirable tend to be a different set. They are often the leaders in their category. These top 10 'desire' brands are in a higher league. They have even greater brand clarity. As a result, their 'bonding' is six times the average, their share nearly five times and their growth prospects eighteen times the average. The reassurance that you are getting the best is even more attractive, because 'value' is not just price.
Brand desire is the key to success. Certainly the more favourably priced the brand the less desire is required to make it a good value proposition. Lidl is one of the top 10 global brands on price and desire is not that strong but is sufficient enough to make it great value. But if desire is low then even the cheap brands become poor value. Conversely, high priced brands such as Apple justify their premium because they command such high desire.
The sweet spot for brand owners is where the desire consumers have for a product perfectly matches the price they are willing to pay. Pricing too high risks losing a sale and pricing too low sacrifices margin. Research can help identify the most productive balance between price and desire.
Millward Brown will announce the results of its latest research on the world's most ValueD brands in March as part of its Value-D: Balancing desire and price for brand success report.