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| Prof. Park Heung-soo |
The 2014 Interbrand brand assessment results show Coca Cola’s brand assets being valued at $81.5 billion.
This is not a measurement of the company’s sales or tangible assets, but purely its brand value. This is because Coca Cola literally created a new market when it launched cola.
Despite its fervent efforts to catch up with Coca Cola, Pepsi’s brand assets are worth $19.1. The gap shows how important it is to create a new category in the market, and to be remembered as being a pioneer by the consumers.
Creating new categories
One of the best ways for a company to create a new category is by positioning itself in a place that is completely different from existing categories. In addition to new and innovative products, companies must newly position the products that already exist.
Creating a new category comes with risks, but it also opens up an opportunity to become the No. 1 brand.
Bacchus-F, for instance, became known as the No. 1 pick-me-up beverage because it was the first in that category remembered by the consumers. There were coffee chains before Starbucks, but it was the first to create the category of high-end coffee outlets. CJ Cheil Jedang’s instant rice, now in its 15th year of production, was the first packaged bacteria-free rice, which is why it is still No. 1 in the market.
A pioneering brand is not always the first to appear on the scene. It is the brand that first made an impact on consumers and stuck in their memory.
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| Members of The Korea Herald Best Brand Awards Board review the candidates for the awards at Herald Corp.’s head office in Seoul. From left: Park Heung-soo, professor of marketing at Yonsei University School of Business, Sim Jae-ik, advertising director of The Korea Herald, and Lim Young-Kyun, professor of business administration at Kwangwoon University. (Chung Hee-cho/The Korea Herald) |
Recognized quality
Recognized quality, unlike the actual quality of a product, indicates quality measured by consumer experience. This is because there is a gap between perceived quality and actual quality. Recognized quality is important for the following three reasons.
First, it impacts the way consumers make purchases. Consumers do not always accept the information the companies provide. Rather, they tend to prefer to assess different brands based on the overall image or experience provided by the products. This is why considering the factors that decide how the consumers will assess the quality is more important than improving the quality itself.
Second, recognized quality can help distinguish the product. The distinguished traits of a certain brand affects purchasing decisions, which is why recognized quality must be considered when establishing strategies for product positioning.
Third, recognized quality helps improve price competitiveness. The higher the recognized quality, the higher the price. Even in the same product category, products with higher recognized quality can attain higher prices, and this in turn can raise the profit margin. Brands with better price competitiveness also attract more consumers, and consequently have better brand loyalty and higher sales.
Creating a new category and becoming the first brand to be remembered in that category is the best way to become the best brand.
By Park Heung-su, Yonsei University School of Business professor
