Why brand names are key

on 14 February, 2014

Marketing folk spend their lives trying to build brands. Brands that can establish reputations with consumers are of great value to their shareholders.

The key objective is to build brands capable of justifying premium prices considerably greater than pure commodities and, of course, significantly more than the products’ literal worth.

In this way they reduce the risk to investors by building more predictable and sustainable cash flows than non-brands. The repository of all this shareholder value is the brand’s name.

Retail brand names similarly set consumer expectations. If you put your own name on your outlet you are telling people you stand by your personal reputation, with Jesse Boot, Michael Marks & Thomas Spencer and John Sainsbury obvious examples.

Then there are those names expressing specialism. One I visited – the Wee Dram – proudly displays 500 styles of whisky and can happily help you choose the one for you. As a brand owner you would feel proud to have your product in distribution with the company.

Then there are those discount brands whose names play on colloquialisms, such as Bargain Booze, Plonk and Rhythm & Booze. Here the chosen names deliberately set clear consumer expectations of low prices and special deals on known brands. These retailers require high-volume sales to make their low-cost operator model work.

It isn’t difficult to see the collateral such names provide for the anti-alcohol lobby. Nor is it difficult to see the inherent conundrum brand owners face when distributed in such outlets, despite the attractive volumes.

They can, of course, introduce different pack sizes or create specific blends and labels to avoid diluting their hard-fought-for premiums with direct price comparisons. But volume is vanity, profit sanity.

Should such retailers consider changing their names to be more attractive to brand owners? I don’t think so. Even with minimum unit pricing there will always be consumers for that end of the market. Whether they will continue to make good money remains to be seen.

What’s in a name? Everything if you are a marketer.

Andrew Marsden is a consultant and former president of the Marketing Society.


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Is blended Scotch overshadowed by single malt in retailers?

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Is blended Scotch overshadowed by single malt in retailers?

  • Yes
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