Managers of strong brands appreciate the totality of their brand’s image—that is, all the different perceptions, beliefs, attitudes, and behaviors customers associate with their brand, whether created intentionally by the company or not. As a result, managers are able to make decisions regarding the brand with confidence. If it’s clear what customers like and don’t like about a brand, and what core associations are linked to the brand, then it should also be clear whether any given action will dovetail nicely with the brand or create friction.
The Bic brand illustrates the kinds of problems that can arise when managers don’t fully understand their brand’s meaning. By emphasizing the convenience of inexpensive, disposable products, the French company Société Bic was able to create a market for nonrefillable ballpoint pens in the late 1950s, disposable cigarette lighters in the early 1970s, and disposable razors in the early 1980s. But in 1989, when Bic tried the same strategy with perfumes in the United States and Europe, the effort bombed.
At the time of the launch, a Bic spokesperson described the products as logical extensions of the Bic heritage: “High quality at affordable prices, convenient to purchase and convenient to use.” The company spent $20 million on an advertising and promotion blitz that featured images of stylish people enjoying the perfumes and used the tag line “Paris in your pocket.” What went wrong? Although their other products did stand for convenience and for good quality at low prices, Bic’s managers didn’t understand that the overall brand image lacked a certain cachet with customers—a critical element when marketing something as tied to emotions as perfume. The marketers knew that customers understood the message they were sending with their earlier products. But they didn’t have a handle on the associations that the customers had added to the brand image—a utilitarian, impersonal essence—which didn’t at all lend itself to perfume.
It’s in companies’ best interests to reduce price competition because price wars can harm an entire industry. But diplomatic resolutions of price wars are generally impossible because overt diplomacy is a form of price collusion and may attract regulatory oversight. As a result, price leaders often engage in subtle forms of diplomacy that use market forces to discipline renegade companies that threaten industry profits.