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Brand Value & Pricing

Strong Brands Require A Focus On Brand Value


Amazon Brand Value Example

There are five drivers of customer brand insistence – awareness, relevant differentiation, value, accessibility and emotional connection. To be competitive, brands must relentlessly pursue ways to strengthen each. Today, I will focus on the importance of brand value.

Value has a numerator and a denominator. The numerator is the bundle of benefits that the brand delivers to the customer. The benefits could be functional, emotional, experiential, self-expressive or even take the form of shared values. And it is often some combination of these. The denominator recognizes that there is some cost to acquiring these benefits. Maybe the cost is monetary but it could also be in terms of time. Time and money generally are the two scarce commodities in people’s lives.

So brand value is the ratio of benefits to costs. A brand can deliver an outstanding value, a good value, an adequate value, a poor value or a value somewhere else along this continuum. Ultimately, brand value is a perception. It is a perception of the ratio between benefits and cost.

Obviously, the more valuable the benefit, the more one will overlook the cost. Consider the time-constrained person who is always complaining about being too busy and not having enough time. Even that person will take time out to do something that she enjoys. In fact, the more engaging the experience, the more she loses track of time.

Let’s take one example of a brand that delivers a good value – Amazon.com. What are some of its benefits?

• 24/7 access
• Much larger inventories than most brink and mortar retailers, including products offered through third-party retailers
• Customer reviews that are rated by other customers for their usefulness
• Recommended related products
• Recommendations based on past purchases
• You can browse or listen to content
• For books, you can search the content for specific words and phrases
• Sophisticated search and browsing options

How does Amazon.com fare on the cost side? First, let’s consider its time saving tactics.
• As mentioned under benefits, 24/7 access from any Internet enabled device including smart phones
• Amazon stores your payment/credit card and shipping address information
• One-click ordering option
• Overnight shipping option

And on the monetary cost side:
• All products have discounted prices, often offering the best prices available on those items
• If you reach a minimum purchase amount ($35 for books and many other items), there is a free shipping option
• With Amazon PRIME, you can get unlimited two-day shipping for free

So, compared with many other shopping options, Amazon.com delivers superior value. Interestingly, it also delivers well on the other four drivers of customer brand insistence – awareness, relevant differentiation, accessibility and emotional connection.

While most brand managers focus on creating brand differentiation, establishing a consistent brand identity and building brand awareness, they should not lose sight of the importance of delivering a good brand value.

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