Reality and Perception
We predicate a lot of our opinions about companies, products and services on the images that we have perceived. Whether the actual image is reality or perception is not as important as how we react to it and to what extent it affects our ultimate purchasing decision.
Image is built by factors ranging from high quality products to being socially responsible to the community in which it is located, e.g. supporting Boys and Girls Clubs or “loaning out” its key executives to the city or to not-for-profit organizations to help with major challenges instead of them having to hire outside resources.
Image Affect on Price
Image does play a vital part of affecting the bottom line and can add substantially to it. In the book, The Mind of the Strategist, Kenichi Ohmae notes that “SONY enjoyed a superior quality image in the United States that enabled it to price its color TVs much higher than competition, while in Japan this was not the case. They invested heavily in public relations and promotion and managed these functions more carefully than their competitors. The resulting image difference was reflected in a price premium, typically 5 to 10 percentage points that enabled them to outsell their competitors with equivalent performance.”
In other instances, the company closely managed the marketing functions, especially promotion and distribution. The lesson we learn from these situations is, as Mr. Ohmae notes, “When product performance and mode of distribution are very difficult to
differentiate, image may be the only source of positive differentiation.”
Once an image has been established for a company, product, or service, it is not set in concrete. It must be supported continuously and modified when necessary to keep it
dynamic. There is no question that this takes a strong commitment from executive management. The company must be willing to spend the dollars necessary for such a program and commit highly skilled professionals to its implementation.
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