Recently the New Yorker magazine featured an article explaining that most successful vendors in many product categories are the ones at the ends of the market.
In this case ends means either the ‘far better’ high priced end or the ‘aren’t bad low priced end. Companies in the Big Middle, where most of the customers were, are suffering, squeezed from both sides. It’s an article that, when you stop and think about it, raises lots of questions about segmentation and the benefit (or not) of market share gain strategies, but that is a whole other blog.
Sandwiched in this otherwise interesting article was an observation that left me open mouthed:
‘ Today, consumers don’t need to rely on shorthand: they have Consumer Reports and J. D. Power, CNET and Amazon’s user ratings, and so on, which have made it easier to gauge differences in quality accurately. The result is that brands matter less: a recent Nielsen survey found that more than sixty per cent of consumers think that stores’ generic products are equal in quality to brand-name ones.’
Brands matter less!? In a world of (often contradictory) information overload brands matter less? In grocery stores where purchase decisions are measured in 100th’s of seconds or less brands matter less?
You have got to be kidding – I would argue that the need for shorthand is going up not down.
Granted there is an awful lot of information out there and true, if your brand doesn’t stand authentically for something that differentiates you from the competition, you are in big trouble. You will be found out, more quickly today than ever before.
This doesn’t mean brands matter less. It means that brands matter more and it means that whatever is promised by the brand will have to be delivered far more robustly than ever before.