part 2

the perception of value

Have you ever purchased Fiji bottled water instead of drinking tap water?

Are you sure that Apple products are well worth the price?

Do you feel that Lexus makes better cars than Toyota?

Do you know anyone who has purchased a bottle of wine only based on the label artwork?

If I had to pick the number one reason for the importance of branding, is that when effective, it increases perceived value. The opposite is also true: when branding is ineffective, it decreases perceived value. Here are a few examples from the local grocery shelf.

Which of these boxes of eggs appears to be higher quality? Which company do you think pays more attention to detail?

Which of these pickles do you think is the most expensive?

These two soaps are the same price. Which one would you rather display on your sink? Which one shows how much soap is left without picking it up? Which one can you use with only one hand?

A current trend in the food industry is branding in its most basic form—repackaging commodities for retail, also called Value Added Products. The value entirely comes from the brand. Here are two examples of brands that exploit these benefits. Each product is within 10 feet of the other in the same aisle.

The branded product is 792% more expensive. The sole difference is the addition of a designed pouch.

appearance is everything…well, 90% of everything

The above examples show that effective branding commands a price premium. The perceived quality of your business gets the customer through the door, and the actual quality keeps them there (or keeps them from coming back, but that’s out of my hands). Once you establish a brand, it also becomes much easier to sell band extensions, because a good brand creates customer loyalty.

It’s really just common sense: if you want customers to realize your product or service is premium quality, it has to look like it’s premium quality. 90% of your customers won’t be able to use your product or service before paying for it, so 90% of them have to make a decision based on non-experiential and non-sensory factors. While a friend’s recommendation, press, or website reviews play a part, the appearance of the product or business is the first thing prospective customers see. Have you ever purchased something in a store without any prior knowledge of the product, because it “looked good?” Have you ever compared two services from their websites and chosen one over the other because one “looked more professional?” This is the effect of branding on perceived value, and it directly impacts customer choice—which directly impacts your bottom line.


effective branding commands a price premium.

established brands make it much easier to sell brand extensions.

if you want customers to realize your product or service is premium quality, it has to look like it’s premium quality.