Lars Wallentin : the avantages of a brand name

Valua­tions of brand names belon­ging to major com­pa­gnies show that the brand name is often worth more than the whole pro­duc­tion appa­rus. When one consi­ders how a brand name, known for its qua­li­ty, can make a short-cut to the consu­mer’s wal­let , it is easy to see the sense in such a valua­tion, as well as the need for manu­fac­tu­rers to nur­ture and rein­force their brand names to achieve suc­cess in the mar­ket. Lars Wal­len­tin at Nest­lé is inde­fa­ti­gable when comes to the sub­ject of brand importance…

Gérard Caron : What are the obvious advan­tages of a strong brand name ?

Lars Wal­len­tin : They are several.

stable sales : When the people at Del Monte start the day’s­work, they have a fair doc-294.jpg idea of what their sales will be that day. The Del Monte brand is noti­ceable on the shelve. Had it been an ano­ny­mous brand it would not have been so easy to pre­dict the day’s sales.

Pro­tect mar­ket : Nes­ca­fé has sta­ked out such a huge claim to the ins­tant cof­fee mar­ket that is high­ly unli­ke­ly that any other brand could gain a signi­fi­cant part of its mar­ket share, even if the com­pe­ti­tor spent immense sums on advertising.

GC : Com­mu­ni­ca­tion with consu­mers is easier thank to the sup­port of a famous brand ?

LW : Defi­nit­ly yes ! Kodak do not own any pho­to shops, so they can­not speak to the consu­mers in the shops and tell them to buy Kodak film ! But because Kodak is one of the most esta­bli­shed brand name in the world, the com­pa­ny can bypass the shop­kee­per and still create demand for its pro­ducts by tal­king direct­ly to the consu­mer via various form of advertising.
But let’s resume the avan­tages of a strong brand :
confi­dence in the pur­chase A per­son buys an IBM com­pu­ter does not ask him­self whe­ther it will work or not. With a brand name made up of a mass of incom­pre­hen­sible cha­rac­teres in a strange lan­guage, straight off a pal­let, He is pro­ba­bly not as confident !
added value for the consu­mer : When com­pa­ring dif­fe­rent­ly pri­ced, com­pe­ting pro­ducts, it is natu­ral to won­der how much of the dif­fe­rence can be moti­va­ted by the higher qua­li­ty of the more expen­sive pro­duct, and how much by the satis­fac­tion of consu­ming a pro­duct with a stron­ger brand name. The consu­mer is not real­ly inter­es­ted in all the others fac­tors : trans­port, labour costs, etc. that contri­bute to the higher price. 

All of this does not only apply to consu­mer goods, it is also true in most other situa­tions in which a consu­mer choose bet­ween com­pe­ting goods and services.