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. Last Updated: 07/27/2016

The Wonderful, Terrible Life of a Brand Name




What makes Levi's jeans better than, say, Wranglers? Why are Harley Davidson motorcycles superior to those made by Honda?


Many consumers have no answer. They don't care which jeans they wear or what motorcycles they ride. But a relatively small percentage care deeply and will account for more than two-thirds of a product's sales. According to the U.S.-based NPG Group, which has been studying brand-name loyalty since the 1970s, about 11 percent of any particular brand's customers are extremely loyal, meaning they purchase that brand 50 percent or more of the time.


A brand is a product that consumers prefer to purchase without consideration for price or quality. Based on this, some marketing specialists say Coca-Cola has ceased to be a brand.


In his book "Brandicide," Steven Arbeit writes that Coca-Cola has been an integral part of American lifestyles in the past few decades. Now, however, Coke outsells its biggest competitor, Pepsi, only in those U.S. supermarkets where it is priced lower or where it occupies a much larger part of a store's shelf space. Price now figures as the most important factor influencing consumer choices. Arbeit says that hundreds of millions of dollars in advertising has not convinced Americans to pay more for Coke.


If you want consumers to be loyal to your brand, make them members of a select club, and find a way to make your product a part of their daily routine, advises Knight Technologies corporation chief Christopher Knight on his web site (http://www.top7business.com/archives/


marketing/5-21-98.html).


The Apple computer company has employed both of these principles. Apple computers are more expensive than IBM compatibles, but according to a study conducted by the Computer Intelligence company, Apple led the market in consumer loyalty from 1994 to 1996. Among former Apple owners purchasing new computers in 1996, 81 percent bought another Apple. From the start, Apple turned Macintosh ownership into a type of religion, and many Mac owners hate with a passion anything associated with IBM compatibles.


A company might also try turning its employees into a missionary force. The U.S. sporting goods company Nike seems to have done just that. So-called "ekins" (Nike written backward) are a special part of the Nike work force. These Nike super-enthusiasts visit store sites where they explain to retailers the complex construction details that go into making Nike sports shoes. Many ekins even have the company's logo tattooed onto their bodies.


In many instances, consumers use brands to establish a connection with famous individuals. "To create image, it's important to involve popular personalities. When buying a BMW, a person is buying a James Bond image, for example," says Dmitry Korobkov, general director of the Adventa advertising agency.


A recent Moscow State University graduate said he has smoked only Gitanes cigarettes from the moment he began watching the television series Matador about Serge Ginsbourg. The French singer smoked those cigarettes exclusively.


Companies hoping to create as many aficionados for their brands as possible play on consumer desires to associate themselves with their idols. Swatch watches, for example, has used famous personalities from the art world as well as film directors like Robert Altman and the fashion designer Vivian Westwood. It even commissioned Jean-Michel Jarre and Peter Gabriel to write the melodies for its alarm clocks. "This brand has a very favorable total image. It is worn by people from the creative professions," says Yury Knychkin, an editor at the weekly business journal Kompaniya. Knychkin himself has owned at least 20 Swatches in his lifetime.


Knychkin even follows news about Swatch on the company's web site. But the multi-colored plastic watches have even bigger fanatics. A number of Swatch fan clubs exist throughout the world. To become a member, one has only to fill out a removable blank included with every Swatch and mail it to the indicated address. The club's members receive a special monthly newspaper informing them of company news and have special opportunities to order limited edition Swatches. Auctions are held where collectors will sometimes spend tens of thousands of Swiss francs on rare Swatches from the company's early years.


Despite these efforts, much brand loyalty has been eroded in recent years. "Brands everywhere are now under threat," says Russel Yeo, strategic planning director at the South African division of Grey Advertising International. "We don't have a single client who isn't concerned about the fate of his brand. ... People's feelings for brands are growing weaker."


Some marketing specialists said many producers confuse loyalty with habit. "People often ... lack free time. In these cases, popular brands come to their aid," says Elmira Mikhailova, vice president of the DMB&B advertising agency.


For example, because of inertia, a person may buy the same beer for years. But it can be easy to tempt them into trying another brand if you can show that it is cheaper, has the same quality and fits their lifestyle better. This is causing some people to switch brands.


For example, Levi's has recently lost many of its young U.S. fans, lured away by other producers promoting their own jeans as more in tune with the times. The corporation has recognized its mistakes and is aggressively fighting for younger consumers' attention on its markets outside the United States. In Russia, for example, Levi's advertises extensively in the youth magazines Ptyuch and OM. "Adults don't need an explanation of whatLevi's are, so our advertising is focused on outgoing young people," says Yelena Meteleva, assistant director of Levi's Russia office.


However, a large advertising budget is not a prerequisite for promoting consumer loyalty. "There are special products for which advertising costs are low, and for which formation of a group of regular customers occurs slowly but surely," says Leonid Tarasov, head of the Ansdell consulting agency.


This is most likely what led to the formation of fan clubs for Lada automobiles, which does almost no Western advertising. Russian Lada owners can often be heard to say that "our cars simply are not cars." But the Lada fan club's philosophy is quite different: "Lada is more than a car, it's a way of life."