BY KEN PEDEN/COO, Kronotex USA
A laminate retailer adamantly told me the other day his customers are just like him: They don’t care if they buy a well-known laminate brand versus a no-name brand. This retailer also insisted that his customers, like him, will always gravitate toward the lowest price.

I asked this retailer about his recent TV purchase: a Sony 50-inch HDTV for around $3,000. I said, “Why didn’t you buy the Element brand at half the price—the lowest price point?” Turns out he also drinks Starbucks (four times the cost of 7-11’s coffee). And he buys Nike (10 times more expensive than Wal-Mart’s store brand sneakers). And he does all this during a recession.

Brands mean nothing and the lowest price point rules? Clearly not in many product categories, including laminate.

The reality is that Americans buy brand names because they help simplify the purchase decision process by standing for something the consumer values: quality (Sony) or safety (Volvo) or style (Calvin Klein) or confidence (IBM). That value justifies a price premium in most cases. It is why major retailers have good/better/best options. And more often than not, the differences are not added features but added brand recognition.

Extensive research about laminate purchases over the last six years reached indisputable conclusions: Two brand gauges are consistent predictors of increased sales, even in down markets.

First is brand awareness. Women, who clearly buy the majority of laminate products, buy brands they know and love. Especially when the purchase price increases. Nearly 100% of consumers are unwilling to buy a can of soda whose brand they never heard of. The cost: only $1. With a laminate purchase averaging more than $1,000, consumers crave reassurance they are making a sound purchase decision. Yet very few laminate brands enjoy significant awareness: Pergo, Armstrong and Formica are the only brand names with greater than 90% awareness.

The second gauge is purchase intent (the percent of people who would consider buying your brand the next time they shop). High brand awareness without high purchase intent is possible— and deadly. Most people have heard of Polaroid, but purchase intent for its HDTV is likely low—just like its price point. And the well-known Oldsmobile brand name? Low purchase intent made it but a memory.

Clearly there is a place on the shelf for lower-priced laminates. In nearly every category, around 10% to 15% of shoppers simply buy the cheapest option available. But brands surely affect the decisions of the remaining 85% to 90% of us—including in laminate.

And if you’re still skeptical, take a look at your brand of TV set. Or the car you’re driving. Or the coffee you’re drinking. And if you’re really driven by price, then ask yourself the next time you are sick, will you ask the pharmacist for the cheapest medicine available?