Lame Cliché Thinking – Reboot!

In what seems to be a time-honored tradition, one more consultant warns that “Holiday Season Price-Cutting and Hard Sell Can Damage a Brand”

http://adage.com/article/cmo-strategy/holiday-season-price-cutting-hard-sell-damage-a-brand/231023/

It’s time to re-examine that myth.

#1 – Price –not sex—sells.

Time Magazine reports that, for the first time in 20 years, the percentage of the population employed in the U.S. is lower than in the U.K., Germany and the Netherlands.

The Govt. Poverty Line being set at $22,350 for a family of four. In September 2011, the Census Bureau reported that there are 46.2 million people living below it, an increase of 2.6 million people from last year.

The New America Foundation estimates that the share of middle-income jobs fell from 52% in 1980 to 42% in 2010.

So, first things first… today, if you are not on sale, you are not selling.

As I reported previously in this blog (http://salupmedia.blogspot.com/2011/09/braman-miami-how-to-destroy-and-image.html) even Bentleys and Rollers are advertised on price. A practice that, by the way, I don’t agree with, but they appeal to the upper 1% of the upper 1%.

#2 – When is a “brand” not on sale? When the retailer sells it.

Think about your day-to-day brands… the Nikes, Colgates, Crests, Pantenes, Folgers, Thomas English Muffins, Smuckers, Coca Colas, Budweisers, Canons, Sonys, Panasonics, iPads and the other hundred premium names that surround us in real life.

One of the common elements that they all have is that they are sold through retailers, be it your local Foot Locker, Publix, Ralph’s, Best Buy, Brands Mart and, naturally, Walmart.

Do you honestly think that Coke went flat, Thomas English Muffins grew moldy and Nikes are less desirable because a retailer decided to offer a discount or BOGO? Nah.

Do you really think that Macy’s shoppers will blame Polo for long lines at the register? Or for the crowding in the corridors? Nah. They’ll blame Macy’s.

Real consumers understand both concepts to the “t”. If not, they wouldn’t even bother using coupons to buy name brands, they would just buy the store brand for less money.

If you want to think nuclear damage to brands think Walmart, Costco and their brethens. And not because they sell brands cheaply (people see that as a benefit) but because in driving all profits from brands, they dis-incentivate brand creation. Why brand your Kellog’s Cereal Bars if you are going to make a few cents per sale? You might as well create more store brands!

So, most of the time, it’s not the brand that’s on sale… it’s the retailer holding a sale.

#3 – The brand “experience”

Go back to the brands that surround us on a daily basis… and what is another huge common element? Their transactional nature.

I go to Publix… then buy shampoo (Pantene), toothpaste (Colgate), coffee (Bustelo or Pilon Black), chicken (Purdue), soft drinks (Gatorade or Propel Zero), bananas (Chiquita)… and dozens of other products. All branded. All transactional.

I definitely like these brands –and go out of my way to buy them—but there’s no experience, just a transaction. A branded transaction, to be sure, but a transaction nevertheless.

More… my wife goes to Macy’s (a brand) and buys Clinique makeup. Again, transactional… she is replacing make up.

From a regular consumer point of view, I’d say that 90% of all brand “experiences” are transactional. Branded. But transactional.

#4 – So why brand?

A brand only has one purpose in life: get a consumer to pay a premium for what would otherwise be a parity product (think store brand, Sear’s sneakers…)

Branding as a discipline only has one purpose: get the brand to be in as many transactions as possible.

From my experience in consumer research in stores, restaurants, supermarkets, pharmacies… consumers can tell what brands stand for and what retailers do to them.

Moreover, consumers can tell very well when a brand is relevant and when it isn’t and make many of the store-brand decisions based on that mental map. I would venture to say that, whenever a store brand wins over name-brands, the name brand hasn’t done its job well.

Bottom line: There are so many lame clichés around the entire issue of branding and discounting that it’s time to try to see it from the consumer’s point of view:

• Discounts are seen as a regular event today; needed and welcomed
• Most discounts are seen –correctly—as coming from the retailer
• The consumer seems to be differentiate well between a brand’s activities and a retailer’s
• Consumers also seem to have no problem in determining when a product should be branded and when it doesn’t matter