The Power of Brand Over Price

Standing out as a business and brand in today's competitive market is more crucial than ever. As someone who has worked in sales and marketing for almost 3 decades, I've always believed that building a strong brand is essential. This belief was reinforced when I came across Vusi Thembekwayo's insightful framework on market positioning. His ideas resonated deeply with me and inspired this article.

The Pyramid of Market Positioning

Vusi Thembekwayo's model, which divides market positioning into utility, price, and brand, aligns closely with my own experiences and observations.

1. Utility (Bottom Layer):

This layer represents products bought solely for their functional benefits. Consumers here are driven by what the product does. There's no loyalty or consideration for quality beyond basic functionality. Products in this category are easily replaceable by cheaper alternatives. For example, generic cleaning supplies or basic household items fit this category. They serve a purpose and are chosen primarily for their low cost.

2. Price (Middle Layer):

Competing on price means targeting consumers who prioritise cost over other factors. This segment is crowded and highly competitive, often referred to as the "meat in the sandwich." Businesses in this layer face constant pressure to reduce prices, which can erode profit margins and lead to unsustainable practices.

3. Brand (Top Layer):

At the top of the pyramid, brand is everything. Consumers in this layer make purchasing decisions based on the emotional and perceived value of the brand. They are willing to pay a premium because of what the brand represents and how it makes them feel. Think of brands like Apple, which rarely discounts their products. Apple commands higher prices because it has built a brand synonymous with innovation, quality, and a first-class customer experience.

The Strategic Advantage of Brand Building

Investing in brand building is key to long-term success. A strong brand creates a loyal customer base that's less price-sensitive and more emotionally connected to the product. This loyalty isn't just about the product's utility but about the entire experience and the values the brand embodies.

Why Focus on Brand?

Customer Loyalty: When customers love your brand, they stick around, reducing churn and increasing their lifetime value. For example, I have purchased Apple iPhones right from the beginning and upgrade every two years. I also own complementary Apple products such as a MacBook Pro, Apple Watch, iPad Pro, and Apple Airpods.

Pricing Power: Strong brands can command higher prices and maintain healthier profit margins. They aren’t forced to compete on price. Example is me here again. I can get a cheaper laptop and cheaper head phones...but I choose Apple.

Market Differentiation: A distinctive brand stands out, making it difficult for competitors to copy. Apple supports my everyday as everything is connected. I can copy something on my iPhone and paste it on my laptop. I can set navigation on Apple Maps on my iPhone and have my Apple Watch vibrate to instruct directions.

Building a Resonant Brand

To build a brand that truly resonates, businesses must go beyond just marketing tactics. It's about connecting with the emotions of the target audience. Here are some strategies:

Emotional Engagement: Develop marketing campaigns and messages that evoke positive emotions and inspire your customers.

Quality and Experience: Ensure that your product quality, after-sales service, and overall customer experience are first-class. Customers should feel confident and valued every step of the way.

Community Engagement: Create a community around your brand. Engage with your customers on social media, at events, and through other channels to deepen the connection.

Vusi Thembekwayo’s emphasis on understanding the deep-seated drivers of value beyond just the numerical aspects of business support these strategies. His insights on the importance of community engagement and emotional connection highlight how these elements contribute to building a standout brand.

By focusing on these elements, businesses can move beyond the limitations of price competition. They can create a brand that not only attracts but retains loyal customers who are passionate about what the brand represents. This approach ensures sustainable growth and positions the business for long-term success. At the end of the day, you want customers who choose you for life and become your strongest brand advocates spreading how great you are!

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