In marketing, one brand is always trying to outwit, out advertise, and out spend its competitors, often costing millions of dollars to build their brand equity or brand value. It’s because, the better we recognize a brand, the better we relate to that brand, the higher the value that brand has in our minds and the safer we feel purchasing that brand. The higher the brand value in the minds of the consumers, the more those prospects will purchase that brand, generating greater revenues for that brand company.
Brand value is in the mind of the customer. It’s no more than a perception. Change the perception and you change the perceived brand value.
The Value Equation or The Value Proposition
The smallest perceived difference in Value can seal the deal! It’s about this psychological sense of balance, and, it’s on going…
The value of a brand or the value of a purchase looks like this. Whether you realize you are making these calculations consciously or subconsciously, you are making many calculations before you make a purchase. This holds true for your last new car and your last pack of gum. This process is independent of the cost of the product. Only the buying cycle changes.
Think about the last time you purchased something from a convenient store. You know that you could have bought that quart of milk, six pack of beer, or loaf of bread much cheaper at the grocery store, right?
You weighed out the grocery store experience first. You knew you had to park 100 feet from the building, walk another 100 feet to the back of the store for that quart of milk, then 100 feet back to the register, wait in line while “coupon lady” goes through 200 coupons on her two grocery carts of cat litter and TV dinners, then walk the 100 feet back to your car.
Or, you could pull up to a convenient store, 8 feet from the door, walk only 20 feet to the milk and get through the cashier line in under 3 minutes (average wait time in convenient store check out lines across the U.S.).
We are purchasing the convenience. When you add the additional cost of the product at a convenient store, then subtract all of the negative we encounter at the grocery store, often, the value equation determines that it a higher value to pay more to get more convenience.
Question: Have you ever paid more for something just to get it sooner? I rest my case.