People love to question the power of brands.
“With Amazon dominating the world, brands are done for,” some proclaim.
“In a digital world, you don’t need brands,” others note.
Another group insists, “Social media trumps everything! A referral from a friend is far more important than a brand.”
These are all interesting thoughts, and not without some merit, but brands aren’t obsolete. They still matter. In many categories, brands play a critical role—perhaps the most important role—in guiding purchase decisions.
I witnessed this recently when shopping for a new car with my wife. Our 2005 Honda Odyssey was fading, so we needed to find a replacement. Brands fundamentally informed our decision.
The first step in our car buying journey was defining a set of options. There are many cars available, but not all fall under every prospective car buyer’s consideration. Between shuttling my son Charlie to baseball practice, my daughter Claire to French horn rehearsal and my daughter Anna to swim practice, my schedule is tight—there isn’t a lot of time on the weekend to visit car dealerships.
We decided to eliminate a number of brands off the bat. I dropped Hyundai, because I just couldn’t see driving around in a Hyundai. I crossed VW/Audi off the list, because that company cheated on emissions testing in a most arrogant fashion. I’m a big fan of Ford, but my wife eliminated it from the running. Other brands that didn’t even make our consideration set include Kia, Cadillac, Chevrolet, Nissan and Dodge.
This first decision was driven almost exclusively by branding. We didn’t study the offerings or compare reliability charts. We didn’t search on Google for product specifications. We just made some choices based on our perceptions of the various brands—perceptions that were formed by advertising, sponsorships, recommendations and all the other brand touch points.
So we came up with a list of brands to consider: Honda, Toyota, Mercedes, BMW and Jeep. We then headed off to visit the dealerships and look at the offerings.
Brands fundamentally shaped our perceptions. We thought Toyota and Honda were both very reliable; BMW, Mercedes and Jeep ranked a bit further down the list.
We thought Jeep, Honda and Toyota would be the most affordable, and we worried about the price of maintaining a BMW or Mercedes. We didn’t study the actual cost; we didn’t call the various service departments. Who has time for that? We just formed opinions based on our perceptions of the brands.
In the end, the decision came down to two options: Toyota Highlander and BMW X5.
We dropped Honda from the list because we like the Honda brand but don’t like the look of the new Pilot. We cut Mercedes because their only SUV with a third row is a huge car, a bit difficult for our life in downtown Chicago. Jeep doesn’t have a third row.
Down to just two, we faced a tough decision. The Toyota Highlander and the BMW X5 are both lovely cars. BMW? Well that is a pretty impressive vehicle, and it is fun to drive. Highlander? Supremely practical.
In the end, we went with the Highlander.
It was ultimately a brand choice: we just didn’t want to be driving around in a BMW. It is a bit too flashy for us. It makes a powerful statement, one that we don’t want to make. I can’t see sending my daughter off to the grocery store to get some milk driving a BMW.
It is remarkable how brands play such a role in purchases. From a crowded field, brand equity drove consideration, perception and choice.
The challenge in cars—and in many industries—is to build a fabulous product and a powerful brand. You need both if you hope to win in this intensely competitive world.