Preserving Brand Value

STATE COLLEGE, Pa.Demand for more value may continue long after an economic recovery, leading to bankruptcy or demise for some well-known companies if they dont adjust their positioning.

Marketing experts Dr. Robert P. Leone of the M.J. Neeley School of Business at Texas Christian University in Fort Worth and Dr. Randle D. Raggio of Louisiana State University reveal recommend two positioning strategiesjust good enough and altered amortizationcompanies can use to keep their brands in consumers minds. Depending on certain factors, either approach could be successful, but only one can be chosen for any brand since the methods are mutually exclusive.

As reported by Newswise, in the just good enough strategy, brands are marketed as having adequate quality at low prices. This influences consumers to feel that prestige brands arent worth their higher prices when lesser brands will do. With breakfast cereal, for example, as money got tight many consumers switched to store brands to save a buck or two per box, Leone said. The attitude is, This store brand is good enough.

The altered amortization strategy portrays prestige brands as being worth the costly price tags through attributes such as being longer lasting, requiring fewer repairs, experiencing less depreciation, and by offering extra amenities such as money-back guarantees and extended warranties.

Some products can capitalize on an image of high quality and durability, which some consumers may not have considered so much before. With vehicles, for instance, durability and fuel economy are now much more important to potential buyers than styling since these save money in the long run, he said.

Brands not decisively marketed as offering the best value, either by being just good enough or presenting altered amortization, risk fading from the marketplace. These brands are stuck in the middle.

A brand stuck in the middle is not a value offering. It doesnt have the lowest price in terms of the value proposition, and its not a high-quality product that would cost less over time due to reliability and durability, Leone said. Before the economic downturn, a lot of consumers were willing to buy from companies in the middle. Now theyre not.