Creating perceived value is crucial to brand success

• How brands create additional intangible value and how marketers can lose it and diminish the brand

I had an uncle who always wore a mundu (sarong) and shirt. That was his standard attire for as long as I could remember and I never saw him wear anything else outside. He would not wear T-shirts, suits, coats, or even pants. 

Much later in life, I mustered the courage to ask him: “Uncle, I have never seen you wear anything else other than shirts and mundus. Why is that?” 

He smiled wryly. He knew I was working in advertising then and he wanted to give me an answer that he felt I could relate to. He said: “We are ordinary people interacting with normal day-to-day people. We don’t need to be glamorous or dressed up,” and shortly after, he added: “In fact I never give much thought to what I wear.” 

The second sentence got me thinking. While my uncle only wore mundus and shirts – he only wore the white mundus – differently designed with embroidered edges. I remember each one as unique and distinct. His shirts and the design of his mundus would typically always be matched, and he wore either crisply ironed cotton full-sleeve shirts or silk shirts with very unique designs. 

So, much against my instincts, I decided to challenge him and said: “Uncle, I don’t agree that you never gave a thought to your attire. On the contrary, I always felt they stood out.” Much to my relief, he roared with laughter and explained that he fully agreed with me that his attire, though never western or never over-the-top, was always well-thought-out in terms of occasion, time of wear, and even the kind of people who would be present for the occasion. “One needs to dress according to one’s status,” he said, rather grandly. And with a big wide smile he continued: “I always bought mundus from only this special shop and my shirts were tailored by only this one tailor who sourced the best cotton and silks from the market. I paid extra but it was all worth it, I feel. I am still very proud of my attire,” he said with a pat on my back.  

I had earlier thought to myself that my uncle was not given to wants, and that he was beyond the modern world’s issues and immune to temptation of perceived value. But I was wrong. In the context of his life, his mundu was distinct in design and signalled his status. His tailored shirt made with finery and by a specialist signified his distinction. 

He saw the extra value in the premiums he paid to his tailor and the mundu designer. He was satisfied with how it helped signal his ‘status’. 

There are three clear lessons from this simple anecdote for brand builders which many practitioners either forget or disregard to their brands’ peril. Many failures of brands can be traced back to those disregarding these three lessons:

People buy almost always on perceived value – not merely by functional value.

Identifying the wants that the brand can fulfil and communicating that clearly creates brand differentiation.

Brand creators must increase the value of the brand – people must pay more and brand owners must get more profits from this intangible value creation.

Too often I hear advertising people complain after a client brief, “It won’t sell, the product is too expensive” or “In India/Sri Lanka, our consumer is value conscious and will not buy this expensive brand”.

Actually, while the statement itself is completely true that consumers are value conscious, the real question one needs to really ask is “how can I enhance the perceived value of my clients brand so he/she can sell it at a premium?” 

What motivator or social context can be assigned to the brand to justify the premium? If the advertising partner can address that question, then he is being a true partner committed to delivering better bottom lines for the company and one who creates a robust sustainable brand. 

Low pricing per se cannot be a driver for brand creation. And there’s a great example of one such failure – A brand that used a lower price point as a positioning strategy and failed abjectly.

Cars have always been a status symbol in India, and Delhi is famous for people flaunting their status by showing off the brands and the different kinds of cars they have. Historically, too, a car-owning household reflects a certain statement in terms of social status (‘We have arrived’). 

So, when TATA decided to launch NANO and call it the ‘poor man’s car’, they were working against the perceived value in the category. The perceived value of cars lay not in its ability to transport people from point A to point B but in that it signalled that the family had ‘arrived’ and that they had acquired a social status that befits respect and a certain aura that car owners tend to have. 

The NANO, at INR 100,000 would now be affordable to many families who could only afford two wheelers or would travel by public transport. Logically, it was a no-brainer – convert large numbers of people in India hungry to buy a car by giving them NANO at such a low cost. This was being bought to them by the highly credible TATA brand, which is highly experienced in motor vehicle manufacture. 

TATA boasted the foreign expertise that would go into the making of the car. Yet after its launch, it was clear – it was a huge failure. There is enough evidence to suggest that consumers did not want to be seen buying ‘the cheapest car’ in the market.

By buying NANO, they would be signalling that they are one of the many in India who can’t afford cars instead of signalling an advancement of status, which is what a car purchase entailed. Later on, it was argued that the car had functional issues – none more or less than previous car launches but the inability of the brand to create perceived value and address a distinct want meant that the brand was doomed to failure. NANO forever will be a case of positioning and marketing going wrong. 

But even gurus in marketing of brands can get it wrong. P&G messed up the ‘Old Spice’ aftershave and cologne brand in India in the 90s. Till then owned by Shulton, Old Spice had huge aspirational value driven by these extremely sensuous visuals of a rugged man on a surfboard being ogled at by an extremely gorgeous lady. The distinct music with the tagline ‘The Mark of a Man’ set Old Spice aftershave apart as an international brand that most young people aspired to use.

Of course during those days the category size itself was small and sales of the brand came from the big metros only. When P & G bought it in 1993, it was a small yet highly aspirational brand targeted at the top echelons and aspirational youth of society. Procter decided to go mass with the brand. And used their famous research and functional advertising to create penetration. The research showed that the masses currently used alum to soothe their skin after a shave and the task would be to convince consumers to give up alum for this new form of skin soother post shaves. 

In its ambition to create mass appeal for Old Spice, the brand owner disregarded the aspirational value of ‘macho and international’ that the brand possessed and its current semiotics, including surfing on the sea and the blonde girl imagery; and the iconic music was ignored. They replaced it with a functional story of a navy man who throws away the alum that he uses to soothe his reddened cheeks (post-shave) and takes old spice instead. They replaced a highly aspirational semiotic rich communication with a very functional (why use Old Spice) approach.

Sales plummeted, brand value eroded, and Old Spice ceased to be a player in the aftershave/cologne segment for many years. Trying to replace a semiotic rich story with a logic-based one was fraught with dangers. By trying to make this brand that was aspirational and sought-after by a select few to be bought by everyone in the market, the marketer figuratively killed the goose that laid the golden egg. Of course in the recent past, attempts have been made to revive the brand by aligning the positioning to the new global positioning but it would be fair to say that Old Spice, as one knew it, was dead.

So, next time you are creating or modifying a brand, it is vital to think carefully about: what perceived value you are creating; if are you putting your current brand in peril by messing with its positioning; if you are creating value that justifies a premium; and if you are adding value or diminishing it in the long-term. 

Let’s play the role of value creators and deploy our skills and energies in determining how to increase profitability and perceived value. Let’s try not to become value destroyers or brand-diminishing agents.

(Santosh Menon is a marketing communications expert with 20 years of experience in multi-national locations. He can be reached at [email protected])