Article Number : 3910 |
|
Article Detail |
|
 | |
| Date | 11/24/2008 8:34:39 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=3910 |
| Abstract | By Matthew Spieler Contrary to recently published stories, products stamped with a known brand do create more sales and higher profits... |
| Article | By Matthew Spieler Contrary to recently published stories, products stamped with a known brand do create more sales and higher profits. If this was not the case, why would companies that own the rights to popular brands spend millions of dollars a year to promote and protect the moniker? And while the concept of selling a brand is a marketing truism in general, laminate flooring manufacturers say it is especially the case in this highly competitive category. “Recognized brands most definitely affect a consumer’s purchase decisions,” said Ken Peden, COO of Kronotex, Formica Flooring’s parent. “Well-known brands have higher perceived quality and are more trusted, especially when the purchase price is more than a few dollars. It’s why consumers pay thousands more for a Sony HDTV over an unknown name. And why Calvin Klein white T-shirts cost more than Fruit of the Loom.” David Small, vice president of marketing for Pergo, added, “Consumers have come to expect quality and service from particular brands. When consumers purchase well-established brands like Pergo, they realize they are buying the highest quality products with the latest cutting-edge technologies and designs.” Eric Erickson, Shaw’s laminate product category manager, said when purchasing a brand, a consumer feels like she knows what to expect “which allows her to leave your store feeling great about her purchase.” Branding is critically important to Armstrong, noted Milton Goodwin, vice president of laminate and ceramic. “We track branding on a continuous basis—not just overall awareness, but how people feel about our brand across measures such as innovation, trust, quality and confidence.” This is especially important during these tough economic times, he continued. “When business conditions are as tough as they have been, there are not many things that can help a retailer either jump-start sales or maintain previous rates of success. The top two ways experts say is to focus on brands consumers know and trust over a long period of time, and sell products that offer unique selling propositions—from high-end luxury styling to durable performance characteristics.” While a brand is generally seen as a way to help sales during slow times, Betsy Amoroso, director of corporate communications for Mannington Mills, acknowledges in today’s economy, when so many purchases are made based solely on price, selling a brand can be challenging. “But when a brand stands for something significant, dealers can take advantage of the opportunity to educate their customer, and at the same time capitalize on that brand’s strength to obtain a higher price for the product.” She pointed to Mannington’s products as the example, noting dealers can accentuate its award-winning styling and design and the fact the Mannington brand is exclusive to specialty flooring retail stores, and can’t be found in home centers. Pergo’s Small agreed, saying, “A strong brand brings to consumers innovation, style and quality and reinforces the consumers’ purchase decision, especially in difficult economic times. Premium brands like Pergo offer savvy customers and specialty retailers many unique advantages over ordinary laminate flooring. And best of all, they allow specialty retailers to leverage the power and trust of a name that is known nationally, while selling products exclusive to the specialty market. All these factors provide dealers with increased opportunities for upselling.” Formica’s Peden added, “Contrary to the popular misconception, most laminate shoppers—and consumers in general—aren’t exclusively or primarily motivated by price.” He explained the two most important factors in attracting a potential customer are brand awareness and purchase intent. “Several laminate flooring brands have one or the other, but Formica is one of the only brands that ranks high in both areas.” Peden also agreed that exclusivity plays an important role when it comes to increasing a company’s sales and profits. Peace of mind The one thing everyone mentioned is that brands give consumers a certain peace of mind that cannot be obtained with an unknown commodity. “When purchasing a high-ticket item such as flooring,” explained Shaw’s Erickson, “factors such as durability, performance, color and style can be of greater importance than price. A brand that is known to deliver can outweigh the importance of ‘bargain’ pricing and this can help increase sales. Consumers will pay more for a product that will last longer and perform better.” He and others do admit that due to imports and other factors, price is much more of a deciding factor in the laminate category but this is changing. “When purchasing a laminate brand such as Shaw, the consumer is purchasing the company’s performance promise.” Whether it’s the association with better quality, higher status, or both, Peden added, “women buy brands they love regardless of price, and are willing to pay more for a brand they know and trust. There is a certain comfort and reassurance that goes along with a well-known name brand, making it the more desirable purchase.” Beyond bringing peace of mind to the buyer, Mannington’s Amoroso said a product with a known name evokes a feeling, a thought, a mood. “It inspires consumers to assign it much deeper meaning than just the word alone. Think of some super- brands— Nike, Coke or McDonalds, and newer ones like eBay, iPod and Google— and you’ll see that each one has a personality larger than its singular name. Consumers assign characteristics like trust, strength and even a ‘coolness factor’ to brands in order to find one that fits their lifestyle—or the lifestyle to which they aspire.” Defining a brand According to the Fourth Edition of Webster’s New World College Dictionary, a brand is: “An identifying mark or label on the products of a particular company; trademark.” Based on this definition, every company that sells something technically has a “brand.” But as anyone in marketing or sales will tell you, there is much more to establishing a consumer brand. The question, for the purpose of retailers then is, what exactly is a brand? And, accordingly, when/how does a product move from commodity, then on to brand status? “A brand is a distinctive name that is easily identifiable within a category,” explained Pergo’s Small. Shaw’s Erickson added, “An iconic brand is a symbol that represents a company. A brand is a promise that the company strives to deliver.” Formica’s Peden said there are numerous factors that go into achieving true brand status. “A brand is the cumulative perceptions, associations and benefits a consumer associates with a name. These benefit perceptions include quality (Sony), reliability (Maytag) and safety (Volvo). Most brands are built on a combination of perceptions and associations: macho and freedom (Harley Davidson); family fun (Disney); creativity and innovation (Apple). These cumulative perceptions define a brand’s equity—what it stands for.” He added brand status is achieved over time when a name has both equity and awareness. “To achieve brand equity, your brand needs to stand for something that is relevant and differentiating in the consumer’s mind. This can be difficult in cluttered, commodity categories like laminates. Achieving high levels of awareness involves either having been around for a long time (Cadillac) or a heavy investment in advertising (Dyson vacuum cleaners). In laminates, only Pergo, Armstrong and Formica enjoy significant brand awareness.” This combination of brand equity and brand awareness is what drives purchase intent, Peden noted and is the measure of whether someone is willing to buy your product. “Brand awareness for Oldsmobile was high, but equity was low, thus purchase intent suffered and it no longer exists.” Time and dedication Armstrong’s Goodwin agreed with Peden’s assessment that establishing a name takes time and dedication, which is why the company enjoys two of the industry’s most powerful brands in hard surface flooring. For example, he noted, “Armstrong, which has been in business for 147 years garners a 97% consumer recognition rate. Consistent investment in national consumer advertising—nonstop since 1917—has helped to build the Armstrong brand.” In 2005 the company introduced its other brand, Bruce to the laminate category. “Bruce has been around since 1884,” Goodwin noted, “and has been the number one consumer and builder brand of hardwood flooring for generations. Taken together and you easily get the top two trusted names in hard surface flooring.” In real life a brand may be a set of ready-made values that, when purchased, become part of the purchaser, Mannington’s Amoroso said. But consumers have to appreciate the brand’s underlying appeals, and use those appeals to drive the purchase decision, in order to elevate it to brand status. The problem nowadays is, she added, that what’s needed to get there is less clear than in the past because the methods of communication have changed. “Traditionally it was print or broadcast and today that’s expanded to include Web sites, message boards, social networks, etc. It’s a lot of clutter, and the challenge that marketers have is to break through that clutter to expose a clear brand message.” Finally, Goodwin cautioned, a company has to continually make sure the products it introduces to the market are desirable or the brand does not carry as much weight in the sales department. “While having trusted brands help get consumers into the store and looking at merchandise, the products still have to meet their design and performance needs.” |