Wal-mart is “Always low price. Always”
Big C is “Low price for every family”
Jetstar is “All day every day low price”
Air Asia is “Now every one can flight”
Tiger airways is “Get the real deal”
Virgin Blue is “Get what you want”
What is the common point of these brands? yes, the key word they wat to communicate to their audience is low cost, low cost and low cost.
The burning question now may come to your mind: To be the winner in low-price segment, all a brand can do is just to be single-minded in optimizing the cost to be the cheapest? and in terms of their marketing communication, they are stick to only single message “low cost”.
And this a most crucial issue: when every brand voice the same meesage, how can they differentiate themselves from others? just a lower price and that is all?
In principle, low price is the first and formost a low-cost brand should do. However,low price strategy does not mean they ignore branding, especially in essence of a Brand Strategy Differentiation. Conversely, good branding does make a big difference. Noticeably, a successful low-cost brand is primarily supposed to have low price or the market leader is normally the cheapest brand.
But having a low price does not necessarily to be successful.
Assuming that we are offered the same price for a low-price ticket from Hanoi to Singapore by Virgin Blue, Air Asia and Tiger Airways, which is the determinant for our final buying decision?
Different clients will have different reasons behind their choices.
“I take Air Asia because that is the biggest Asia low-cost airlines and they should be reliable”
“I believe Tiger Airways since that is subsidiary of Singapore Airlines – a best-service airlines”
“ And I like Virgin Blue simply that belongs to Richard Branson – a world charismatic entrepreneur”
Here you are, Mr. Branding. These air carriers must do a formidable effort in branding to create a valuable word (in above simulated statements, they are “reliable” for Air Asia, “Good-service” for Quantas and “Charismatic” for Virgin Blue) in customer mind and very vitally, they do it before customers think of buying a low-cost ticket.
From brand strategy point view, I think even in low-cost segment, a brand can be stand-out from crowd by creating an emotional connection with their customers. Some one may think this is a bullshit as the fist thing customer expect from a low-cost brand is low price, as cheep as possible. Let take a look at the case of Target brand. You may change your mind.
Target brand very succeeds in positioning it as a cheap and chic brand. And the reasons come from both its smart branding and the competitive situation.
In order to be a cheap & chic retail brand, Target extensively make a great effort in its ‘kool’ image positioning strategy. This brand invests considerable money on design and branding atmosphere of its stores. In addition, the retail giant Wal-mart is not perceived as chip but simply cheap. In deed, this reality reflects truly what is Wal-mart is. This brand philosophy is originally to be as cheap as it can. To be a cheap retail market leader , Wal-mart brand has become a notorious brand by paying its employee an extremely low salary. “Wal-Mart is not cool. It’s impossible for Wal-Mart to be cool because they would have to discredit their entire business to do that” – as commented by a report on CNNMoney.com.
Certainly, Target has made a best use of this situation to be “cheap & chic” retail brand.
In today’s economic crisis, we are becoming more price sensitive than ever. Where you are going to shopping this weekend? You are going buy a ticket from low-cost carriers Air Asia or Tiger Airways?
A cheep price is all that you want or anything else?
Nguyen Duc Son
Brand Strategy Director of Richard Moore Associates