Too many options can push shoppers into panic mode(69682)

Detox the Branding Business

Retailers and Manufacturers Need to Fight Brand Confusion to Help Consumers and Themselves

Consumers seem to like variety. The more options the consumer can choose from, the greater the likelihood of finding what most closely resembles his or her ideal product. The problem is, in seeking to give consumers what they want, retailers and manufacturers may be teetering on the brink of having gone too far. According to studies of consumer confusion -- a relatively new, but rapidly growing field of interest -- the sheer volume of choices available to many consumers is transforming their enjoyable shopping experience into an overwhelming decision-making marathon.

One way to address this threat would be for manufacturers to narrow the range of choices they produce. This modest-approach proposal isn't attractive, of course, because the first manufacturers to do so would cede shelf space -- and market share -- to competitors (note: Unilever and Procter & Gamble drastically reduced in the past the number of brands but not the variety of their product ranges).

Another possibility would be for retailers to make the first move and limit the number of items they're willing to stock. That's also unattractive, however, because despite consumers' confusion, research still shows that, all other factors being equal, we still generally prefer stores with large assortments of goods to those offering a limited range. There is potential for a dangerous stalemate, particularly if, as research suggests, manufacturers continue to introduce even more choices to the marketplace, and retailers continue to feature more variety.

What can be done? One realistic solution would be to provide consumers with a trusted guide that can help them navigate the many selections before them and emerge as satisfied customers, confident in their choices, and loyal to the companies and stores that win them over. The good news is that there is already an experienced and logical candidate for the role: the brand.

Brands can be strategic, flexible and easier to manipulate than whole organizations. Calling on brands to help consumers simplify their selection and purchase experiences makes sense; in the past, brands have served as the most important institution and clarifying mechanism there is in the marketing world.

They have acted as liaisons between company and customer; they're descriptors, promises, expectations and attitudes, all together.

But brands themselves have caused great consumer confusion of late. We recently completed an in-depth study of 1,488 consumers; as the results attest, 70% perceive the brands they know, based on memory, in the categories they want to go shopping for, as confusing. And at the point of sale, brand confusion more often increased rather than decreased.

Put directly, the good old model -- in which manufacturers build brands and retailers (outside of consideration of their own branded image) simply provide a channel of distribution so that consumers can find the brands they seek -- is dead. What's needed is a new model, in which manufacturers and retailers together take responsibility for building precise brand images to help consumers chose.

Both manufacturers and retailers need to be in the business of detoxing the branding business. This is why it is important to understand what aspects of brands are confusing to consumers today and why. These are:

Parity perceptions

When consumers are confused about parity, or equality, in branding, it means that they cannot differentiate one brand from another, except by name. With this type of confusion, consumers do not have the motivation to learn about the brands before them in any depth, and they generally consider all of their possible choices as commodities.

Relevance of differentiation

With this type of confusion, consumers may sense strong differences among brands, but they do not have a clear sense of whether and how these differences are relevant for them. For example, consider brands like Microsoft and Apple, or any other brands that represent relatively complex products. Customers may perceive that the learning curve necessary to fully understand the products is very steep, and as a result, they may have a negative perspective on the selection and purchase process overall.

Credibility

The third type of consumer confusion is about trust. Marketers may be able to differentiate their brand and even explain the relevance of its attributes clearly to consumers, but end up confusing customers because of inconsistent messaging or perceived insincerity.

Two primary behaviors result from these three types of brand confusion. First, consumers turn to other means of orientation, most often price comparisons, to make their choice. This is clearly a "stop-gap solution;" many consumers stated that they actually prefer to base their buying decisions on enriched, multidimensional attributes such as brand images, rather than on the one-dimensional price criterion. Second, consumers "tune out" in protest, and the choice process (and the purchase) is abandoned altogether.

Neither behavior is good from the retailer or manufacturer points of view. For the manufacturer, brand investments are clearly not paying off; competition that shifts toward price likely means a downturn in margin. For retailers, when shopping becomes stressful, there is a very real danger that consumers will no longer patronize the store where the stressful experience took place.

Manufacturers can help retailers by being clear about how the retailer fits into the manufacturer's overall distribution strategy. Take Apple, for example. With its unique design and software, Apple is a distinctive but simultaneously complex brand. Still,the Apple iPhone 4 went on sale at Walmart stores around the country.

The giant retailer is a true mass-market chain and unlikely the right place where consumers are motivated to learn in some depth about the Apple brand. Apple and Walmart therefore understood that there needed to be a complementary brand touchpoint that would help the consumer in making the purchase.

In this respect, Apple brand stores play an important role. They represent significant sales for Apple and in a way, they are competition for Walmart. But together they fulfill complementary roles for the consumer. Apple stores explain the brand and become a temple of worship for Apple enthusiasts, while Walmart becomes an outlet where the consumer simply and conveniently buys an Apple product.

Consequently, the price tags for the iPhone 4 at Walmart and Apple stores show no difference. And therein lies the point: Multichannel strategies should always be aligned to the brand's so-called confusion spectrum, assigning certain channels a role in preventing the brand from being intoxicated.

Selecting retailers by demographic

Secondly, manufacturers can select retailers strategically to align with the brand's youth or maturity. Beck's beer is a traditional dry German pilsner from the northern port of Bremen. It is known for its adherence to the German Purity Law of 1516, which specifies that only water, hops and barley can be used in the making of beer.

InBev, a leading global brewer, bought Beck's in 2002 and made plans to launch new versions of the beer, notably milder, low-alcohol brews such as Beck's Gold and Beck's Green Lemon. The new category of flavored beers, mostly aimed at women, is hard-fought, but Beck's managed to be very successful. Why? As test-market research found prior to the launch, beer brands lack distinctiveness in the eyes of the female target audiences.

This pre-launch work also revealed that Beck's proposed beer labels were perceived as too traditional for the new category. InBev managers addressed both types of brand confusion (parity perception and credibility problems) by choosing to distribute the new labels exclusively in trendy bars, clubs and the like, holding off on marketing their new offerings in supermarkets and other retail channels.

InBev managers' choice flew in the face of competitors' convictions that high visibility is the best way to market new products. Instead, the exclusive retail cooperation at the beginning of the brand extensions' life-cycle helped to give the new Beck's beer labels distinctiveness. Further, the approach infused a trendy touch to the new labels, making the beer credible in its new category.

Manufacturers and retailers must work more effectively in their own best interests by better understanding their role in the entire ecosystem of companies that exists to create value for consumers through branding. If this is not possible, retailers need to rethink the whole brand ecosystem and turn to other means of orientation for their customers.

Amazon's success is perhaps, in part, based on just that. The user-recommendation and rating mechanism is an effective substitute for the good old brand as an anchor of orientation and trust. Offline retailers clearly have to watch out, as they will have difficulties in finding a similar powerful substitute for the brand.

Too many options can push shoppers into panic mode

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