Brand Premium

There are many companies, managing directors, marketing managers, brand managers, and finance heads who love to earn premium on their brands. While they all wish to get brand premium, there are many errors of omissions and commissions, which do not allow them to get what they desire.

In the case of brand strategy, one has to make the correct choice across six elements if they desire to get a brand premium. From my experience, let me analyze and share with you the choices to be made strategically to achieve brand premium.

Firstly, one needs to choose between command versus demand. In marketing, you cannot demand a premium; you need to command a premium. Just like in life, you cannot demand respect; you need to command respect.

Similarly, if a brand is respected and looked up to, then there is a good chance that the brand will command a premium. The strategic thinking in Brand Marketing is to choose to do things while building your brand that are full of purity, integrity, and transparency to command respect, leading to commanding a premium.

In real life, whether it be a brand or a brand ambassador, the premium commanded by the brand is directly related to:

• High quality
• Discipline
• Meeting consumer desires
• Fulfilling the promises made by the brand

You cannot demand a premium. But you can command the price, which is at a premium to competition.

There are many companies in marketing that fall for giving schemes after schemes in their brand promotion. The consumer gets addicted to schemes. Worse, the distributor and the retailer also get used to multiple schemes, losing sight of the real value of the brand.

The choice should be made in favor of the brand theme and not the brand scheme. The core value and positioning of the brand need to be highlighted through thematic promotion. Overuse of schemes will definitely not help in the brand getting a premium. The thematic route is far better.

In order to get brand premium, brand marketing efforts have to be in the direction of cultivating a true and high image of the brand, which is inspirational in nature. Everything should be done to create a good brand image, and nothing should be done to cause brand damage.

• Poor quality
• Inconsistent supplies
• Broken promises
• Not being reliable
• Hollow communication

All of these could lead to brand damage. This will not help get a brand premium.

On the other hand, enhancing a brand image through consistency in service, quality, and appeal in a true but interesting manner will help the brand get a premium. Whether it be Royal Enfield, Taj, Dove, or Tanishq, they all move towards increasing their brand image and, in the eyes of the consumer, deserve a brand premium.

Perceived value always helps win brand premium. A high perceived value coupled with credibility will always win a premium price. Perceived value is based on positive perception and good quality vis-à-vis its price. Hence, the consumer says: ‘It’s worth it.’

On the other hand, a non-premium loser starts degenerating from a brand to a commodity by continuously compromising on quality and cutting prices. How will this lead to a brand premium? It will not! Enhancing the perceived value alone will make you a brand premium winner.

It is important to get brand premium by making the consumer count on the brand. In other words, you get brand premium by the consumer trusting your brand and counting on the brand.

You do not get brand premium by discounting the brand and giving a signal to the consumer that there could be a doubt about the quality or consistency. Recently, top brands like Mercedes and iPhone have taken a strong decision to keep away from deep discounting. Instead, they are building a high-quality image and excellent service. This is the appropriate path towards getting a handsome brand premium, making consumers love the brand and want to own it.

My brand mantra is:

If a brand is successful, after the gestation period, it needs to have a healthy bottomline. The mad rush only towards the topline without a balanced approach could lead to an unhealthy bottomline and keep the brand away from getting a brand premium.

Topline growth is important. A healthy bottomline is equally important. Keeping an eye on a healthy bottomline makes the strategy move towards the desire to get brand premium, which is both a cause and an effect. A balanced approach towards topline and bottomline leads to a healthier bottomline. This is a positive cycle.

If you make the right choices, based on my six elements mentioned above, you will definitely get a healthy brand premium. Therefore, my advice is:

Count on the Brand, Don’t Discount on the Brand.