Slowly but steadily in the last 20 years or so, quality—in products and services–has become a foregone conclusion. We demand it. We track it. Companies report on it. The government legislates and regulates for it. We give out awards for it. If a product has a defect and hurts somebody, there’s a battalion of attorneys waiting to sue somebody for it.
Certainly there are still degrees of quality, but the bar has been raised substantially. Baby boomers are old enough to remember when “Made in Japan” meant a likelihood of poor craftsmanship with sub-par materials. Now Japan is a symbol of competent production and has led the way in developing manufacturing techniques that are emulated around the world.
Take the auto industry. J.D. Power and Associates has created a minor empire out of rating car quality. The difference between the best cars and the worst is arguably not that much. 1.5 problems per car versus 2.2? What does seven tenths of a problem look like, anyway? But the cars at the top of the list are lauded for their superior craftsmanship and the cars at the bottom spend a lot of time explaining away their position on the totem pole. Yet even these lower-rated cars are vastly safer and more reliable than the worst cars of two decades ago.
This is where brands can be even more important, or become irrelevant.
Because of the aforementioned safety regulations, the swing toward consumer control of the marketplace, the transparency provided by bloggers, comparison websites and rating companies, product and service quality has become expected–and has lost a great deal of power as a differentiator for brands. Some have argued of late that this makes brands less relevant and that would seem to be a logical conclusion. But in the human mind, brand perceptions range far beyond logic to the emotional territories of trust, security, pride and ego.
Let’s look at two cars. The 2009 Lexus LS is a five-passenger luxury sedan that gets 16/24 mpg. The 2009 Hyundai Genesis is a five-passenger luxury sedan (which appears to be designed to look as much like the LS as possible without generating a lawsuit) that gets 17/27 mpg. Both have power everything and many comparable features. The Hyundai has a longer warranty. J.D. Power rates both cars as five stars for “Initial Quality” and for “Performance and Design.” So how does Lexus sell any cars at all?
The answer lies partially in a closer look at the ratings. When James David Power’s illustrious market research firm rates the two cars on “Overall Performance and Design,” they are entering some pretty subjective territory. Performance for one driver might mean smooth acceleration. For another it might mean blowing the doors off their neighbor’s BMW. Initial quality is fairly empirical. But performance and design bring the heart, the soul, and the ego into the mix. And that’s where many of today’s brands differentiate themselves.
J.D Power doesn’t measure a car’s ability to confer status upon its owner, but is there any doubt which brand is generally considered more of a status symbol? (Yes, I do understand that a high mileage, low emissions car such as a Prius can be a status symbol, too.) The ratings don’t appear to justify that the price tag of the LS is about $20,000 more than that of the Genesis. The deciding factor is in the brand experience, which includes that sense of status, the high level of personal service that is attributed to Lexus dealerships, as well as other intangible, subjective measurements such as, well, “Performance and Design.”
The current slogan for Lexus is “The Pursuit of Perfection.” While many folks would admit they don’t really need a perfect car, and that a Genesis would do just fine, many still aspire to the idea of a car that delivers something more. And Lexus owners plunk down a wad of extra cash to get that warm feeling.
The role of quality in building a brand is changing. Where it’s regulated—a toaster that doesn’t burn up, paint that minimizes fumes—it’s unlikely to be much of a differentiator anymore. Cars are supposed to last a long time. I expect my TV to work every time I manage to find the remote. For more subjective perceptions, particularly a service versus a product, a quality experience has become the key. Brand managers should be careful not to build too much of their brand on a pillar of product quality alone, because their customers have come to expect it in virtually every purchase they make. A quality product may get you a spot at the table, but a high quality brand experience is what makes the difference in today’s marketplace.