Upon further review...The last post regarding product management and consumer buying behavior is incomplete. We discussed the heightened important of product quality. However, we left out the impact that brand loyalty makes on a purchasing decision.
Brand perception is based on a company or brand's body of product work and customer service. The best customer for a brand is the repeat customer. These customers have experienced a positive relationship with the brand from a previous purchase. As a customer continues to derive positive benefits from the products or service of the brand, the relationship deepens. Even a few misses will be tolerated, as the overall brand experience has built enough positive momentum in the customer's mind to overcome a few hiccups. A trusted brand can lead to large-ticket impulse purchases. You see people dropping 42" Samsung LCD TV's and $1000+ HP laptops into their CostCo shopping carts without hesitation. So how to explain this phenomenon. It comes down to brand faith. They have had enough positive experiences with the brand. They know the quirks and benefits that the brand's products offer. This brand faith trumps the lack of research and familiarity with the product features and competitive offerings, in turn leading to a purchase transaction.
Momentum plays a huge roll for a brand. If an unknown brand or out-of-favor brand strings together a series of hit products and services, the positive momentum of the brand will gain and/or recapture a devoted following. This momentum gives the brand a pass for a few product misses and service errors. Product fortunes can change on the dime as a hit product like the Nintendo Wii can take off like a rocket despite the previously lackluster performance of the brand. As well, a disasterous product introduction such as the Pontiac Aztec can lead to immediate inventory liquidations and a dramatically shortened product life cycle. Unlike products, brand fortunes change more slowly. Each product's successes and failures contributes to a brand's overall momentum. As well, established and iconic brands are even slower to change their momentum. When a GM, Sony, Ford, or Motorola falls into a negative brand momentum, the situation can deteriorate quickly. Decades of good will and customer loyalty erodes to the point where the ability to regain positive momentum is particularly difficult. This leads us back to the product argument. Hit products coupled with clever advertising is the best way to reinvigorate a brand.
The speed of change in business is moving faster than ever. Perennial brands are disappearing overnight while newly minted brands with high value-add products and services are being embraced. The key to building a robust brand is offering thoughtful customer service, and delivering and continuing to deliver high-value proposition products and services. Companies riding the waves of their past successes are going to have to come to terms that eventually that positive momentum will stall if they cannot continue to innovate and deliver. In summary, innovate or bust.
