ARCOS DIEGO BRANDING Exercise 31.

08

1. Why are some people ready to pay more for a brand even though the quality of the
alternative product may be the same? Would you pay a price premium for certain branded
products?

Even though people believe that the choices they make are theirs, this could not be any farther
from reality. Most consumers buy products based on many different factors, many of which
are not exactly product related; and more often that not these are not even rational choices. In
her article, Nicky Chapman states that when it comes to talk about branding and customer
loyalty, Apple is, by far, the undeniable king.

Apple has managed to build a brand that revolves so much about emotions that they can
afford to make their customers pay insane prices not only for electronic devices but also for all
the accessories attached to them, which , by the way, are designed so that users are
constrained to used only the native one, since third party accessories or applications tend to
lead to incompatibility issues. It is true, the value of Apple products relies on the brand rather
than the products themselves. This does not mean that Apple products are bad, on the
contrary, the company has devoted to be at the very cutting edge of technology in order to
meet their customers’ expectations and make their experience something unique.

But it all has to do with what is called perceived value. “Perceived” is the key word here, in
other words, the value of the product is not what it is but what customers have been led to
believe it is. Lifestyle, innovation or any of the values Apple stands for are the promise that
tantalizes Apple customers as flies to a light bulb. Moreover, its strategies are focused so
effectively on mesmerizing their users into buying whatever they put on the shelves that
despite their awful quality service at the Genius bars, where you can be literally forced to buy
a new device when repairing your old one is possible, their recurrent sales does not seem to be
affected. Furthermore, Apple devices are designed not to be able to be repaired by the
average technician. Oddly shaped bolts and unnecessary complex wiring compels user to go to
Genius bars as their only option to solve their problems, only to find out that their solution is
that buying a new overpriced device will be cheaper than repairing the one you have.
However, the astronomic yearly company revenues make you think that customers are not
bothered by this.

When I think about buying something different than clothes or groceries, I pay attention to
certain key factors that for me make a real difference. Names and logos really do not mean a
thing to me. Cost-benefit ratio and customer service are everything to me. I want to make sure
that whatever I buy will serve the purpose I bought the item for and in case it just does not
quite do it, I want to be sure there will be someone on the other side to give me a hand to
solve the problem as quickly as possible.

2. Retail marketing consists in communicating what the brand stands for through the design
of the store. Discuss how iconic brands do this in stores you have visited. Consider the
following elements: shop window, product displays, lighting, customer service, store layout
and location, interior design and the use of colour.

Big companies have invested huge amounts of money in the last decades on neuromarketing,
which is a commercial marketing communication field that applies neuropsychology to
marketing research, studying consumers' sensorimotor, cognitive, and affective response to
marketing stimuli. Neuromarketing seeks to understand the rationale behind how consumers
make purchasing decisions and their responses to marketing stimuli in order to apply those
learnings in the marketing realm. The potential benefits to marketers include more efficient
and effective marketing campaigns and strategies, fewer product and campaign failures, and
ultimately the manipulation of the real needs and wants of people to suit the needs and wants
of marketing interests1.

As Steve Jobs said it, the key is being memorable. The first step is consistency. When you walk
into a store any given company, despite the location, you will always notice a certain feeling
familiarity and comfort. The idea is that no matter where you go the experience remains the
same. Colours are the most apparent feature. Take Nike and Adidas for example. When you go
to any of their stores you will notice the prominence of black and white albeit brighter colours
are displayed in the products. This reflects power and strength but also perfection, elegance
and sophistication, which is subconsciously very attractive to customers, even if they are just
looking for something comfortable to wear while going jogging. Furthermore, humans
unconsciously associate senses to feelings and emotions from pleasant or unpleasant
experiences. That is why music and fragrances play an important part in imprinting a memory
into the customers mind. Subtle background music and nice scent will help your brain
remember the brand experience, which has been the main goal of marketing because, in the
end, buyers are not expected to make a rational decision but are rather induced into buying
out of an inexplicable outburst of an emotional type.

1
https://en.wikipedia.org/wiki/Neuromarketing