How your brand influences quality
The product or service that you sell is fundamental to the success of your business – it’s what your customers are paying for. Establishing your market position – how your compare to your rivals – allows you to identify which characteristics of your products and services are fundamental to your brand. One of these characteristics is the quality of your products or services. So it’s important to understand how your brand influences quality.
In a recession this is even more important, because you need to be able to adapt. You will need to adapt your products and services, so that you can adjust your market position, to meet the changing demands of your customers. The Office for Budget Responsibility forecasts that the UK economy will contract by 11.3% in 2020. It won’t return to pre-Covid levels until the end of 2022. In the face of such grim statistics, ambitious businesses need to identify opportunities to create a competitive advantage. Understanding how your brand can influence quality, creates an opportunity to drive your business success through this recession.
Quality in your business
By understanding what level of quality is needed to maintain your market position, you can make the most efficient use of your resources. Quality can be reflected in many different ways, depending on your industry. For a manufacturing business, quality could be determined by your raw materials. In a professional services business, it might be the experience of your team.
The level of quality you need to deliver will be determined by your market position. If you position your business as a premium option, your customers will be unwilling to compromise on quality. Customers buying a Patek Philippe watch, or an IBM network solution, will expect a flawless performance (because that’s what they have paid for). But if you position your business as a “budget” option, your customers’ expectations of quality will be lower. Customers flying with Ryanair, or hosting a website on GoDaddy, will anticipate some frustration, (because quality wasn’t their priority).
What does quality mean in your business
Building a market position around higher “quality” doesn’t necessarily mean higher prices. Higher quality is often associated with lower volume. The rise of craft brewers, artisan bakers and bespoke craftspeople of all disciplines has been driven by a desire for an alternative to the generic, mass-produced options customers have become accustomed to. High-volume production is often accused of putting quantity before quality.
It’s not just manufacturers who struggle with this. Individual advisors and “boutique” consultancies offer customers an alternative to large-scale corporate firms. They could be providing corporate management expertise or personal fitness sessions. The smaller scale creates the opportunity to provide a service that is tailored to specific needs. This is a contrast to an off-the-shelf, one-size-fits-all solution delivered at scale by larger firms.
When you are assessing your market position, it’s important to recognise the level of quality that is associated with that position. To claim a premium position in a market you will need to invest in “quality”, whatever that means for your business. But if you are not trying to provide a premium offer, don’t invest more in “quality” than you need to. Save that investment for somewhere else.
Quality in a recession
In a recession attitudes to quality can change. This is often driven by financial pressure, for both business and consumer customers. The primary reason for UK consumers trying a new brand during Covid-19 is finding “value”(1). So quality may be less important. But research in the US has identified a simultaneous move towards value and premium offers, with consumers abandoning the middle ground. This has led to a resurgence in the sale of Spam (low-cost canned meat), as well as an increase in the sale of premium plant-based meat alternatives (like Beyond Meat and Impossible Burger)(2).
So as the situation continues to evolve, it’s important for businesses remain vigilant. It’s important to understand how the economic turbulence is effecting your customers, and their attitude towards quality. With this insight, you can make better decisions about how brand influences quality in your business. If quality is a priority for your customers, it needs to be a priority for you. But if it isn’t, invest your resources in other areas of your business, where they can create a competitive advantage for you
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(1) McKinsey, Consumer sentiment and behavior, 2020
(2) Bain & Company, Shaping the Consumer of the Future, 2020
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