The Wall Street Journal ran an offer for a sampler of 12 wines for $69.99 with the accompanying copy… “Delivered with $120 savings and FREE gifts.” So they revealed that the cost per bottle is $5.83, which I immediately equated to value. No, I didn’t bite, so I don’t know the labels they would have sent. But think about the mixed message. If the wine was so terrific, how could it be so cheap? Or is the wine not really worth that much in the first place. Was the original price inflated? In other words, price is another way to communicate and support the true value of a brand. And lowering price sends a brand-damaging message.

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General Motors recently announced that it was dropping Mr. Goodwrench, their ubiquitous brand for service across all their products. They are now moving to brand-focused service for their remaining four car lines; Buick Certified Service, Cadillac Certified Service, Chevrolet Certified Service, and GMC Certified Service. This is, finally, the right direction for them to be taking.

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Tesla Motors is scheduling an IPO to raise more capital and complete development of an all-electric car that will eventually sell for $50,000. One issue they need to contemplate is how to position the new car in the marketplace that already has a plethora of environmentally friendly hybrid offerings.

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It looks like upscale shoppers may lead us out of the recession. Tiffany’s sales are up globally. So are sales at Saks, Neiman Marcus, Bloomingdales and Nordstrom. High-end shoppers are leading the way.

But what is interesting to me is the attraction to these strong brands as the vehicle for higher end spenders. Under the assumption that the wealthy have a great deal of liquidity as they have been hording their cash and not investing in the market, they are apparently spending their money on brands they can trust. [Read more →]

Back in the late 1980’s, Toyota made a bold business decision to separate its luxury products into a new company to compete directly against Mercedes and BMW. The creation of the Lexus brand quickly was followed by Nissan (formerly Datsun) renaming its luxury business Infiniti. This was brand separation with many questions. How much brand equity should be shared with the parent? Does Toyota quality or engineering bring anything to the party for Lexus? Can Toyota be believable as the manufacturer of a luxury product? Should a Lexus dealer be situated in or near a Toyota dealer? Should they look the same? Should they act the same? [Read more →]