September 20, 2021
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Going Premium- Brand Decoys and Positioning

Brands rub off on brands. I can create a cheaply produced wristwatch with a great design, simply by selling it in a Rolls Royce Car shop. Brands rub off on brands. Recently, Google reportedly paid Apple $3B to remain the Default Search Engine On iOS. Bernstein Analyst A.M. Sacconaghi Jr. indicated these funds could make up as much as (5%) five percent of Apple’s operating profits. This is crazy but that is exactly what it is. It is the importance of positioning.  Brands rub off on brands.  

 

 

On a lighter note, Puff Puff was a cheap snack in Nigeria until its association with Spring Rolls, Samosa, Chicken Wings and Stick Meat. With that, it’s now part of the elite “Small Chops” Family in premium parties.  Brands rub off on brands.  Traditional beans cake popularly called Akara with its rich nutrients continues to be downgraded because of its association with lower cadre foods like Agege Bread and Ogi (Pap).  

 

 

 

We have a client who is into low cost real estate.  It’s quite a saturated tier. Our work was to help him exit that cadre of the market. One of our key strategies was to tour with him to the middle east and in that tour he eventually  partnered with a luxury home brand in Dubai as a brand statement to announce his entrance into that cadre. Slowly, brand perceptions have started to change and new sets of higher end customers are currently being attracted. This can go both ways, depending on who you want to attract.

Just like the local market woman in the ghetto knows that the success of her trade for the day depends on where she puts her stool and tray to exhibit her goods, so should every business person.  Where and with whom is your brand placed with? There’s a reason why gums, chocolates and sweets stay next to a checkout counter in superstores (to solve the problem of petty stealing and shoplifting because of its small sizes on one hand. And on the other hand, to provide alternatives to unavailability of small denomination when a customer needs his change). If you run a retail store, then you should know to put the flowers during valentine next to chocolates and condoms; strong alcohol next to carbonated mixers. In traffic, the hawker that sells Gala knows to stand next to the guy that sells soft drinks. To gain attention, mingle with the right set of people and your status will be elevated.

 

 

 

 

 

 

 

 

 

 

In brand strategy, the battlefield for attention and relevance is fought in the mind. To be relevant, people take you seriously by the people on your side; that they can relate with; that they admire.  Sometimes it can be by putting your brand next to a celebrity, sometimes it’s next to another pricing for another product or another option of the same product even if it’s decoy. A great example of this is why Apple always comes up with three versions of iPhone during its releases. Let’s understand this by an example. 

 

Let’s say you are an Amala in a buka lover. You find great value in eating Amala. 

 

One fine day, you find yourself in Ojuelegba Shitta to treat yourself to Olaiya’s Amala. But they provide you with three options: 

 

One Scoop of Amala: N200 

 

Two Scoop Amala : N400 

 

Three Scoop Amala : N450 

 

The negligible difference between the prices of 2nd and 3rd options gets your attention.  This is called Decoy Effect.  A 2nd option is just a Decoy option. Companies provide decoy options so that customers can compare Decoy options with an expensive option (and select the expensive one).  In the absence of a decoy option, the customer will compare: N200 vs N450 – and may probably go with a cheaper option.  But with the decoy option, the customer now compares N400 vs N450 and most likely selects the expensive option. 

 

Can you see a similar pattern in the pricing of iphone11 by Apple? 

 

iPhone: $ 699 

 

iPhone Pro: $ 999 

 

iPhone Pro max: $ 1099 

 

Yes, Apple does use Decoy effect to drive consumers to buy the expensive version of their product. That’s branding and market positioning by comparison pricing. Positioning by what next you put your brand close to is a game even more favorable to SMEs. At that point it becomes a guerilla strategy. 

 

An example of Guerrilla strategy was seen when Pepsi was losing its battle with Coca-Cola to become the heavyweight cola company. Instead of trying to beat Coke at its game, Pepsi focused on an uncontested niche and defined its product to appeal to a young, fun-loving demographic. It kept it closer to their celebrities by sponsoring almost every “Detty December’ concert they went to in 2019. They are associated with artists. They like people to think that it’s cooler. So many Pepsi commercials show younger music stars, celebrities or other young status symbols.

 

 

 

Sometimes, brand positioning means you are creating another alternative to your own products just to create a mirage of options for your clients. A good example of this concept is the product lines by the Volkswagen Group. As much as Volkswagen is known for efficient cars that are affordable, it still goes further ahead to reposition itself as a premium brand but with different brand names. Take for example; they own brands like The Bentley, Bugatti, Lamborghini, Audi and Porsche. All these positions the brands to compete with each other, either one you choose they win. Brand positioning is a game of owning a permanent space in the mind of your consumers. It is finding the right parking space inside the consumer’s mind, and going in before someone else takes it. 

 

 

Eizu Uwaoma
Eizu Uwaoma

 

 

 

 

 

 

 

Eizu, ©Hexavia!

Strategy. Business StartUps and Corporate Restructuring Consulting

T: 08035202891

Uwaoma Eizu is the lead strategist at Hexavia! He is a graduate of Mathematics with two MBAs and over a decade of experience working with startups and big businesses. His core is in building startups and in corporate restructuring. He is also a certified member of the Nigerian Institute of Management, Institute of Strategic Management of Nigeria and the Project Management Institute, USA. By the side, he writes weekly for the BusinessDay newspaper.

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