Inspired by: Study: TV Spots Reduce Consumers’ Sensitivity to Price ChangeDo your own research and you can prove anything you want. An easy way is to take a subset of a complex event, and draw conclusions linking your offering to the subset, bypassing totally the complex event.
The principle of “Price is an issue in the absence of value” correctly presupposes that brand is a big component of value. When we as consumers evaluate the purchase of one item over another one, brand is indeed one of the component of our perception value, and price becomes an issue only when the brand it’s not enough to justify the price differential with a less expensive brand.
Big Brands spend a lot of money on TV advertisement today, no doubt about it, and YES TV advertising does sustain Brands (A), especially the BIG ones. And BIG brands do enjoy the principle of “Price is an issue in the absence of value” (B), which results in a less price sensitivity of the consumer (C).
But there are many factors that sustain brands (A1, A2, ….An), therefore the correct logic is
(A1, A2, ….An) -> B -> C
Simplify the formula to
A -> B -> C
is what logic describes as “Non sequitur”, if it were true, a massive TV Advertisement campaign would be sufficient to enable any company to increase their prices without any loss of market share.
Building a brand is not as simple as deploying a TV advertisement campaign, it might have been at some point in time, but it is no more. And the concept of brand is now a Complex meaning, a mesh of Love, Trust, Community . . . (add your own qualities here), and it belongs to its audience, not to the company.
Good readings are:
- Trading Up: why we buy the things we buy;
- LoveMarks: brands as a Love relationshionship.
