THESE PRODUCTS CAN BE PRODUCED IN THE SAME PRODUCTION LINE!!!
” Do different brands from the same company make that much difference? A difference that worth more than 40 or 50 bucks? ”
This is a question my friend asked me last week when she read an essay posted on Renren .com( Chinese Facebook) about the “secret” that Maybelline NY and Giorgio Armani all belong to the Loreal group. This essay posted one month ago is shared by more than 20,000 people on Renren and according to the comments( thousands, actually) below, most readers will now think twice before they ever purchase any Giorgio Armani product. For those used to purchase Maybelline and dreaming to switch to Armani once they have money, they may well change their mind simply because ” It can be produced in the same production line with Maybelline, so why should I pay 40 bucks more ?” . For those used to purchase Armani, the link between Maybelline, a cheap brand available in supermarkets, and Armani, a luxurious brand purchased only by customers of wealth and position like themselves, can degrade the image of Armani.
Well,to a market professional, or one who is studying to become a market professional ( like us), different brands can be viewed as a market segmentation strategy. Company segments the market according to demographic aspects like income and psychological aspects like self-concept and self-values. However, things could be different when customers finally realized this ” trick” of market segmentation.
The first question customers face may be ” should I trust the brand, or the company?” According to the comments made on the loreal case, at least, most customers value the company more than its brands. If most customers trust the company, Maybelline and Armani should not be that much different, for they all belong to the same company which claims it provides various goods of best quality. Wait, if the products are all of good quality, where dose the huge price difference come from? Advertisement expense? Well, though customers may reach different conclusions, the fact that customers start to analyze a company’s marketing strategy itself can be troublesome, for they are now more rational, thus less likely to be affected by the powerful psychological factors. However, this just marks the prelude of a nightmare to marketers. If these rational and skeptic guys finally post their conclusion ( usually unfavorable to the marketers) on the social websites, more and more customers, especially these potential ones, might be affected or even form a negative brand image. This is, of course, the last thing marketers want to see.