What is more important in the marketplace, the Brand or the Product?

Houston made the short list of cities under consideration for the 2012 Olympic Games but ultimately lost out in the final culling. But then, regarding the 2016 Olympics, Houston didn’t even make the short list. This despite having the best collection of physical assets and excellent leadership. In 2006 I wrote an article for the Houston Business Journal about this Olympic site selection review.

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U.S. Olympic Committee Board Chairman Peter Ueberroth said of Mayor Bill White and Harris County Judge Bob Eckels, “They were spectacular. They were in a class by themselves in terms of administration. They were just so far ahead of any other city, it wasn’t close. … If that were the only criteria, they [Houston] would have won.”

But Bob Ctvrtlik, the USOC’s vice president, international, and a member of the International Olympic Committee, said, “We were confident that Houston could host an Olympic Games, … It was mostly that their (IOC members’) vision of Houston was more undefined.”

The problem: Houston’s team “didn’t get it.”

Defining an organization’s identity.

Houston has an undefined identity. Is Houston the Bayou City, Enron City, Space City, Energy City, Clutch City, Gateway City, Hot City, or the Fourth Largest City? Houston has so many impressive sets of facts it is mind boggling. In order to have a preferential feeling about a company or a city, audiences first need to be able to associate it with an identity that makes sense of that myriad of facts.

A city, like a company, needs coördinated leadership to develop its unique identity –an identity that is compelling, that positions the city favorably, that resonates with individuals worldwide.

Selling versus branding.

This is not accomplished by “selling” the company or city, which is a push strategy, but by “branding” the company or city, which is a pull strategy. More like a magnet than a bulldozer. The dynamics are different. It’s not about “what we have,” it’s about “who we are.” If energy and leadership were brought to that issue as well as the issues of infrastructure and venues, Houston would have been able to compete in that intangible area, which, as we see, can be 51 percent of the score.

The Houston 2012 Foundation spent five long years of dedication and hard work putting together an airtight plan, head and shoulders above the competition. And the 2016 effort was more of the same. And they succeeded in achieving that goal. Apparently however, all their effort was focused on the area which counted for only 49 percent of the score: the technical, financial and functional aspects of the event (tangible). And it is understandable, that is the area which all “rational” people would agree is the most critical.

Illogical decision, as Spock would say.

This is why, professing rationality, many are shocked at the decision, which “just doesn’t make sense,” because it appears to be completely irrational. That’s the point. Most choices are not rational per se, they are emotional, based on feelings. Apparently 51 percent of the score came from the area of image and identity (intangible) –what the judges felt about each city.

This is a fact that successful businesses like Starbucks, Mercedes, McDonald’s and Coca-Cola understand well.

Tangible versus intangible effects.

But many are uncomfortable trying to deal with intangibles. They would rather focus on material things. As difficult as it is, it is easier to build venues than to build a brand. Even though every day in the business world we see products bought because of intangible assets they bring to the table, which outweigh the tangible assets of competitors. Indeed, we buy them ourselves. Is Evian better bottled water than Acme bottled water? How does it justify the higher margin? Successful branding. A preferred brand invokes a power that is greater than the sum of its tangible facts. It has emotional content and provides a contextual framework and wisdom that extends beyond logical rational analysis. It yields higher margins, increased sales, remarkable customer loyalty, and the choice of champions.

In competitions where humans choose, the best brand wins. On the store shelf, in the corporate board room and in politics, people champion the best brands. Frequently it comes as a shock to both participants and onlookers. The brand which best resonates with those deciding, wins, even if it has a lower score on the list of tangible assets.

Influencing decisions.

The power to influence decisions is often associated with force, the ability to make someone do or think what you want them to do or think. But we see clearly here that facts are not strong enough to change opinions or influence decisions where powerful intangible considerations are in the mix.

Now I turn this over to you, and look forward to your comment.

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5 Responses to “What is more important in the marketplace, the Brand or the Product?”

  1. Shiloh Grisby says:

    Very interesting article. Couldn’t be written any better. Reading this post reminds me of my old friend. He always kept talking about branding vs product. I will forward this post to him. Pretty sure he will appreciate it. Thanks for sharing! :)

  2. Gil Elvis says:

    This is a pretty interesting post. It makes me wonder if it is really true that product quality is paramount in buyers minds. Thanks for sharing! :)

  3. Don Collins says:

    I really like this article! I like how you explained branding being about “who we are” not what we do for customers.

  4. Bjorn says:

    A preferred brand invokes a power that is greater than the sum of its tangible facts.”

    Now, that is something that I can really relate to. Your post is great.

    Branding is “who we are” when referring to a person. The “what we are” is for the products. The “what we can do” only follows the two… that is if the brand is already marketed.

  5. Nikita Deslatte says:

    No one will admit that the brand is more important than the product, even though it clearly is!

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