Brand identity represents how a company wants to be perceived in the market, what the company stands for, and most importantly implies promise to the company’s clients. Building a strong brand is of great value to the organization’s financial performance.
A strong brand identity commands a premium price. Why would someone spend thousands of dollars more for a premium brand luxury automobile than an economy car brand? The value proposition is wrapped around the brand. Luxury brands are worth more in the minds of consumers regardless of whether the product actually functions better.
A price premium creates the perception of quality. Consumers still pay more for what they perceive to be a better or higher quality brand.
Customers relate value with quality. If one brand is perceived to be of higher quality than the other brand, customers tend to perceive that the higher quality brand is a better value. They say to “Always put your best foot forward”. That statement is so true. If you want to get an edge over your competition, you must put out a better quality product or give the highest level of customer service.
Perceived quality is the single most important contributor to a company’s return on investment. Perceived quality contributes to profitability in part via enhancing market share and prices.
Smart companies are always looking for ways to differentiate their brand from competing offers. In doing so, companies can charge a premium price for their strong brand.