facebook
Are you an Employer?
List of Topics

Brands and other signs of quality


Brands and other signs of quality

In many sectors, brands coexist with other quality signs. The food industry, for instance, is also filled with quality seals, certificates of norm compliance and controlled origin and guarantees. The proliferation of these other signs results from a double objective: to promote and to protect.

Certifications of origin (eg real Scotch whisky) are intended to protect a branch of agriculture and products whose quality is deeply rooted in a specific location and know-how. The controlled origin guarantee on a subjective and cultural conception of quality, coupled with a touch of mystery and of the area’s unique character. It segments the market by refusing the certification of origin to any goods that have not been produced within a certain area or raise din the traditional way.

Thus in Europe since2003, Feta cheese has been a name tied to controlled Greek origin. Even if Danish or French cheese-makers were to produce a ‘feta’cheese elsewhere that buyers were unable to tell apart from the feta cheese made in Greece in the traditional way, their products can no longer lay claim to the name ‘feta’.

Quality seals are promotional tools. They convey a different concept of quality, which is both more industrial and scientific. In this respect, a given type of cheese, for example, involves objective know-how, using a certain kind of milk mixed with selected bacteria, etc. Quality seals create a vertical segmentation, consisting of different levels of objective quality. The issue here is not so much to present typical characteristics as to satisfy astringent set of objective criteria.

The legal guarantee of typicality brought by ‘certified origin’ seal means more than simple designation of origin, a mere label indicating where a product comes from, in that the latter implies no natural or social specificity – although it may mislead the buyer into thinking that there is one. Moreover, several modern cheese-makers deliberately mix up what is genuine and what is not, inventing foreign names for their new products that are reminiscent of places or villages in an effort to build their own rustic, parochial imagery.

It is interesting to see how European countries tried to reassure consumers during the‘mad cow crisis’ in order to redress the 40 percent drop in beef consumption:

Although it is not legal under EU regulations, they reinstated designations of origin referring to a country (die French beef). This did not prove fully reassuring since it was soon heard that French cattle could have eaten not only local grass but also contaminated organic extracts imported from the UK.

Certifications of origin (ieCharolais beef)add typicality but cannot guarantee a 100per cent safe meat.Seals of quality did not exist and had to be created but it would take years to promote them: however, unless full control of the entire cattle raising process is guaranteed, the output itself cannot be guaranteed.The crisis highlighted the need for meat brands. Since 1989, alerted by early warnings, McDonald’s had indeed sought new suppliers in Europe, scrutinizing the way in which each and every one raised and fed their cattle.Retailers like Careful have promoted their own signed contract with farmers.

Whether or not official indications of quality in Europe should still exist in 2010 is a bitter issue that is still being discussed among northern countries (United Kingdom, Denmark, etc) who believe that only brands should prevail, and southern countries(France, Spain, Italy) who support the idea of having official collective signs of quality coexisting with brands (Feral, 1989).

The northern European countries claim that brands alone should be allowed to segment the market and thus build a reputation for excellence around their names, thanks to their products and to their distribution and marketing efforts. These countries tend to favor an objective concept of quality:

it does not matter that the fetches that the Greeks prefer is made in Holland or that Signoff vodka is neither Russian nor Polish. The southern European countries believe for their part that collective signs enable small companies to use their ranking and/or their typical characteristics as promotional tools, since they do not have their own brands.

As their products do not speak for themselves, their market positioning is ensured by quality or certified origin seals. Clearly, behind the European debate on whether or not brands that have built their reputation on their own should coexist with official collective signs of quality lies another more fundamental debate between the proponents of a liberal economy on the one hand, and the partisans of government intervention to regulate it on the other.

From the corporate point of view, choosing between brand policy and collective signs is amateur of strategy and of available resource allocation.

Often, quality certificates reduce perceived difference. Distributors’ brands can also receive them. Brands define their own standards:legally, they guarantee nothing, but empirically they convey clusters of attribute sand values. In doing so, they seek to become reference in themselves, if not the one and only reference (as is the case with Bacardi, the epitome of rum). Thus, in essence, brands differentiate and share very little. Brands distinguish their products. Strong brands are those that diffuse values and manage to segment the market with their own means.

In handling the ‘mad cow’ crisis, McDonald’s wondered whether they should rely on their own brand only or also on the collective signs and certificates of origin.

On an operational level, let us once again underline the fact that brands do not boil down to a mere act of advertising. They contain recommendations regarding the long-term specifications of the products bearing their name, such as attractive prices, efficient distribution and merchandising, as well as identity building through advertising.

It is easier for a small company to earn a quality seal for one of its products through strict efforts on quality, than it is to undertake there'll task of creating a brand, which  requires so many financial, human, technical and commercial resources. Even without an identity, the small company’s product can thus step out of the ordinary, thanks in part to the legal indicators of quality.

Strategic Brand Management Related Practice Tests

Strategic Management Practice Tests