From the Charleston Regional Business Journal

by Bruce Murdy

Every day we receive contrary reports about whether the economy is OK or is going down the drain. With prices skyrocketing for the basics of life, from food and gasoline to what we once thought were necessities, like our daily Starbucks, we are feeling the pinch everywhere we turn. In this type of environment, marketers can be confused about the value of a brand.

There are so many unbranded choices today. Whether it is linked to professional services or a can of beans at the supermarket, is the value of a brand name really still there? Should a marketer spend any effort to create or maintain a brand, when unbranded choices are omnipresent and typically lower in cost?

Perhaps you could look at it this way. With an unbranded product, you’re marketing based primarily on the utility of the product. Does the product perform within customer expectations?

And when the product is recognized as being undifferentiated, utility is the only motivator. Does your accounting firm do tax returns — yes or no?  Does your napkin wipe up spills — yes or no? Does your soft drink quench thirst and taste good — yes or no?

And does it perform adequately for less than what others cost? Commodity time, folks.

With branded products, there’s a utility consideration. You still need to perform the function for which your product or service was created, with reasonable efficiency. Then there’s more.

There’s an implied promise of trust and quality. Consumers know that your product is good, and that any product with that brand on it is likely to be good, and probably better than the others.

One of my favorite examples of this is milk. In my hometown, the store-brand milk is exactly the same as a popular name- brand milk. Exactly the same — no additives, no fancy packaging or labels. Just the name is different.

Yet the brand commands a price premium of more than $1 per gallon. And people shell out the difference because they believe the brand is worth it. They trust it to be better; they believe it tastes better. That’s power.

Part of that brand power is also the social value of a brand. Just ask anyone about highly branded products, like soft drinks, athletic shoes, cars, etc.  Some people are Coke people, not Pepsi people.  Some prefer Fords, and would never consider buying a Chevy.  Personally, I like New Balance running shoes, and believe they are superior to Nike.

There’s a strong social value in a brand. That’s a big reason why people like shopping at Target, and Kmart struggles. That’s why major accounting firms win the big contracts when the smaller ones may be equally or better qualified.

Study after study indicates that in uncertain times, people cling to those things which they value. So while the pocketbook may scream “Buy generic,” there’s another, equally strong voice that says, “Stick with the utility, quality and social value of the trusted brand.”

It’s an indulgence that we’re willing to pay extra for, maybe because most don’t see the brands they believe in as indulgences but ones that provide real value — social value.

This means you should continue to invest in your brand. We certainly know that Wall Street values brands. But everyday consumers and businesses do, too. We want the real and perceived value of brands. We want value in the product or service that goes beyond its functional value. And consumers are willing to pay a premium for it.

So guard your brands. Invest in your brands. And market your brands. It will pay off in the short run and in the long run.