Brand Upgrading? The Truth Planners Need to Understand

What does "brand starts high but product ends low" mean? Starting from the topic of brand seeking upward, this article objectively explains the basic rules of brand growth. Recommended reading for those who want to learn about brand planning.

I don’t know if you have any related experience, but in recent years, brand upgrading has become a common practice for many brands and a basic proposition that planners often need to face.

There is a saying that goes, people go to high places and water flows to low places. This is an immutable law of nature, and it is understandable that brands seek to move upward.

But I think that there is also a very realistic growth rule for brands, which is "brand starts high and products end low."

What does it mean? It means that the brand’s tone should be set high at the beginning, and high-end mental recognition should be established through high-priced flagship products, and then there will be room to develop mid- and low-end products to expand the scale.

On the contrary, if a brand is perceived as low-end, it will be very difficult to enter the high-end segment, and it will probably be a thankless task, or even exhaust the brand's original accumulation. Let me explain the reasons in detail.

01 Brand Upgrading is a False Proposition

You may have also heard that many brands shout "brand upward" every day, especially many domestic automobile brands. As the market enters the inventory era and joint ventures dominate the high-end market, brand upward has become a politically correct thing. However, are those brands shouting "upward" really moving upward?

No, if there is, it is at most achieved in PPT and its own official website.

It is a false proposition for a low-position brand to want to upgrade its brand, because this is contrary to the characteristics of mental cognition and the laws of brand growth.

1. Mental cognitive characteristics

The so-called first glimpse is a lifetime, which is true for getting to know people and brands. The primacy effect proposed by American psychologist Latane refers to the important influence of the first impression on future relationships, that is, the first information input has an important influence on the subsequent cognition of the object.

Human mental cognition is unique and exclusive. Affected by the primacy effect, if your brand is positioned at a low level, then your brand impression will be anchored at a low level. If the brand wants to advance to the high-end, once it exceeds everyone's acceptance threshold, they will feel that your brand value is insufficient, and naturally they will not recognize the high-end image you want to reshape.

Take the Chinese auto industry for example: in the era of traditional fuel vehicles, whether in terms of powertrain, exterior design, or market segmentation and marketing rules, almost all were set by joint venture brands, which led to a general belief that joint venture brands were of better quality, and it was natural for their brands to occupy the high-end market, while domestic auto brands were inferior. Therefore, 150,000 yuan once became the ceiling for the price of domestic brands, and more domestic brands were priced below 100,000 yuan.

With the rise of China's automobile industry, many domestic brands have actually acquired the strength to enter the high-end market and have also tried to upgrade their brands. However, the result is that they either fail or have very few sales, and the so-called high-end brands have become mere decorations. This is because of the original mental cognition. The "preconceived" high-end image of joint venture brands has been firmly established, and domestic brands cannot pass the cognitive barrier to enter the high-end market.

2. Brand growth rules

Taking the Chinese automobile industry as an example, you will find that traditional automobile manufacturers have failed to move up the brand ladder, but many new brands have gained wide recognition by focusing on high-end products, and there are even many people who cheer for these brands like fans.

Why is this? With the advent of the era of electrification and intelligence in the automotive industry, the new energy track has become a consensus for all manufacturers to compete for. People's awareness of new energy brands is still in the early stages of building awareness. New power brands do not have the burden of traditional manufacturers, and have unique advantages in intelligence. To some extent, people are even more optimistic about "outsiders" making new energy vehicles, which can be seen from the valuation of new forces.

This is why Apple, Xiaomi, Baidu and other technology companies have entered the car industry, because everyone's expectations are here. At the same time, you will find that whether it is new forces making cars or traditional manufacturers transforming to make cars, they all choose the relatively high-end market, because at the beginning of the brand establishment, the investment in R&D and production costs are very high. Before large-scale production is formed, the cost of a single product will inevitably not be reduced. The brand is at a high position, which can increase the profit margin of the product and prevent the brand from dying.

If you pay attention to the automobile market, you will find that some new forces have begun to deploy mid-range products in order to expand production scale by increasing volume and lowering the brand entry threshold. This is the law of brand growth. If the brand is positioned at a high level, it will be relatively easy for the product to develop downwards, which is conducive to harvesting the market, while if the brand is positioned at a low level, it will be difficult for the product to develop upwards.

Therefore, brand upward is a false proposition. If a brand is not careful, it will go downward. However, moving it upward may not be effective even if it takes a lot of effort.

02 The brand started strong but the product went down

Many brands focus on cost-effectiveness or quality-price ratio for their mainstream products, and they also hope that their brands can have more bargaining power. This is contradictory in itself, because the basic rule of brand growth is that the brand starts high and the product goes low! Brands need to start high and stand at a high level of cognition .

For any brand, if you want to position yourself at the high end, you must have a flagship product or a high-priced product to set the tone for the brand and establish a high-end image for the brand. If you want to start with products and then establish the brand, you must choose a high-priced product as the starting point of the brand.

This is why some companies no longer use existing products or brands to promote their brands, but instead launch new brands, positioning them at the high end from the beginning, hoping to establish high value. For example, BYD launched a new high-end brand Yangwang, and Aion launched a new high-end brand Hyperbole.

Products can be sold at a low price, and the scale can be expanded to occupy the market. As long as the brand is firmly established, it will be much easier to develop mid- and low-end products, and the market recognition and acceptance will be better. By expanding the scale, the market can be quickly occupied, providing blood transfusion for the brand's continued growth.

Therefore, if your brand is not at a high position, don’t just think about upgrading your brand. What you may need to do most is to start from scratch and create a new brand rather than elevate your existing brand.

Author: Little Monk Kunkun

Source: WeChat public account "Marketing Zen Institute (ID: mandcx)"