Taking a break from studying the other day I stumbled across a pretty interesting article from the Scientific American on how consumers think and how they develop loyalties to certain companies and brands, and the effect that branding has on consumers. A quote that stood out from near the beginning of the article was
“The product is not just a physical thing but comes with a whole mental universe that penetrates the consumer. Think of Gucci, iPod, Mercedes, and take note of the images the words bring to mind.”
We buy products because of the stigma attached to the brand, which in turn is completely reliant on the branding of the company itself.
The article also references the Pepsi paradox – remember the tv ads from the 90s where blind taste tests were done and people invariably (at least in the commercials) chose Pepsi over Coke? The article actually reports that in experiments, Pepsi won taste tests when subjects were blindfolded, but when labelled, the majority of the same subjects would suddenly prefer Coke, corroborated by the fact that Coke enjoys more sales in all parts of the world. The conclusion of this experiment in neuroscience journals? “Branding is mind over matter”.
In the case of Coke, this is the result of excellent marketing strategies to develop customer value. It starts with Product Excellence: having products with high perceived value and effective branding and positioning. Operational and Locational Excellence further drive the perceived value of the Coca Cola brand, which leads to Customer Excellence: retaining loyal customers so that customers are reluctant to patronize competitive firms such as Pepsi.
Coke vs. Pepsi? Pepsi may win in taste, but at the end of the day this is a capitalist society and Coke is the clear leader in its industry based on sales and consumer loyalty.
