How valuable is a company’s brand? Every year a research company or three puts a dollar value on the most popular brands. Obviously, Apple reigns near the top in a crowd of names like McDonald’s, Coke, Google, and Facebook.
Brand ranks don’t depend much on how they’re selected, reviewed, or stacked; these popular brands are well known; Disney, Amazon, Microsoft, YouTube, Sony, CNN, ESPN, Intel; you get the idea, right? There’s monetary value in those brands. What about Samsung?
There is little question that Apple enhanced the Mac brand when the iPod and iTunes Music Store became very popular with Windows PC users. Likewise, there are more Windows PC users who own iPhones and iPads than Mac users who own Apple’s iconic devices.
What images come to mind when you hear the brand Apple?
Mac, iPhone, iPad, Watch? Or, iTunes, Apple Music, App Stores? Probably all of those if you’ve invested in the Apple-brand ecosystem.
Now, what about Samsung? It’s a popular brand known the world over, but also one that suffers from what I call brand confusion. Samsung sells smartphones, yes, but also PCs, Chromebooks, televisions, washers and dryers, air conditioners, and many other products; all with the Samsung brand.
That puts Samsung into a category similar to Sony. Brand confusion.
Samsung sells so many products in so many categories that the brand itself is well known, but the company struggles in an area where Sony struggles. Why spend money on a premium Samsung smartphone when an inexpensive Samsung smartphone does much the same thing but for less money. Samsung’s Galaxy smartphone brand does not carry the same brand weight as Apple’s iPhone. It’s difficult for a major brand to maintain presence on all segments of the product spectrum; low-end, mid-range, and premium. Samsung tries, does well as a brand, but cannot command enough of the premium spectrum to be profitable.
A similar issue shows up in the Volkswagen brand. What’s the VW brand? A broad line of economical cars. The Porsche and Audi brands are the performance and luxury brands from the same Volkswagen Group and VW tried to capitalize on brand recognition with the ill-fated Volkswagen Phaeton luxury sedan. Volkswagen is not a luxury brand. People don’t want to spend the same money on a premium VW as they would a Mercedes, or Audi, or BMW.
PC manufacturers have similar issues. How does HP or Dell fare by trying to sell cheap and expensive PCs? They have the same problem as Samsung. They both sell PCs in large volume at the low end– mostly profitless- of the spectrum, but Apple sells Macs only at the premium end and commands more than half the industry’s profits.
A brand must stand for something of value; either price or premium quality. But not both. Apple knows what it is and stays in line. Samsung, Sony, HP, Dell, and many others that compete with Apple don’t own what they are and try to be all things to everyone. Is it any wonder that wherever Apple competes it does so only on the premium end of the spectrum, and it owns the profits in each segment?