How Important Is Brand Perception?

I was recently in Florida as a snowbird, and overheard a restaurant conversation between the restaurant owner and my realtor. "My son has recently got a job at a coffee shop called Tim Hortons - I'm sure you haven't heard of the name, but apparently it's like a Dunkin Donuts..." I couldn't help but join the conversation, "I'm sorry, guys, Tim Hortons is one of Canada's national treasures, and I'm surprised that you haven't heard of them before."

Many American brands have come to Canada and are doing really well. But you don't see the same success story vice versa. Except for Cirque du Soleil, Lululemon Athletica and Aldo, most others are struggling including one of our most successful global brands until recently - Research In Motion's Blackberry. According to a recent report from The Globe and Mail, the biggest hurdle for Canadian brands is well known: the country is big and the population is small. This means the consumer base isn't large enough to finance a global expansion, which hampers a company's ability to be the size it needs to go international in a country the size of Canada. So when the time comes to expand abroad, many end up forfeiting their independence to a foreign buyer.

In a recent Interbrand report on the 25 top worldwide brands for 2011, no Canadian labels made the cut. One of the criteria to make the annual list is that one-third of a ccompany's revenues come from outside the domestic market. Lululemon is everywhere in Florida, but I'm not sure whether any American consumer knows that it's Canadian, or is it really relevant? The clothing retailer has stores in the U.S. and Asia, as has Roots Canada. Shoe retailer Aldo is probably our country's most successful global retailer so far. The shoe retailer operates in more than 60 countries, in many countries through franchisees. It was reported that it has carved out a niche as a more edgy shoemaker popular among Hispanic consumers.

Apart from the financial prowess to enable Canadian brands to expand abroad, building brand reputation and understanding consumers in different markets are key to success. Sounds like marketing 101? But, in reality, brand perception is a tricky art and science to master. Let's take auto brands, for example. In Canada, consumers ranked Mazda top among mainstream brands while Audi was first among luxury brands, according to the Canadian Perceived Quality Scores. Over 2,500 Canadians were surveyed and each auto maker was given a score out of 100. The top five mainstream brands are Mazda, GMC, Toyota, Hyundai and Buick. On the luxury cars, Audi, Porsche, Land Rover, Infiniti and Volvo top the list. But high scores in brand perception do not automatically mean top sales. But you can be sure that if the brand perception is negative, sales won't be impressive either.

Another top 10 list of brands according to Ipsos Reid's online survey of Canadian consumers indicated that only three Canadian brands made the list: Cirque du Soleil (5), President's Choice (7) and Tim Hortons (8). A total of 100 brands were assessed on the criteria of being a trendsetter, unique, innovative or ahead of its time.

What about Chinese consumers' perceptions of luxury brands? According to the World Luxury Association which ranked the globe's 100 most valuable brands after the "Luxury Oscar Awards" in Beijing, China, Canada's Bombardier Inc. is in second spot in the private aircraft category. I guess Bombardier has a lot to be proud of when it's in the same league as leading fashion brands Hermes, Chanel and Louis Vuitton.

One lesson marketers can take away from Apple is that no matter what criteria you give to any brand-value and brand-perception surveys in the world, Apple is undoubtedly viewed the same globally - not only is it being perceived as the most innovative brand, but it is now the most valuable brand in the world! That's because Apple has focused not only on product innovation, but primarily on being ahead of consumers and anticipating their needs. Has it spent huge marketing dollars to enhance its reputation? You'd bet! Anybody who has read Walter Issacson's biography on Steve Jobs will understand that Apple's success story is all about marketing and building brand reputation - and innovation is just their basic criteria and motivation for showing up at work every day!

Lina Ko

Tags: Branding, Customer Insights, Innovation