Turning ‘What If?’ into Success: Strategies for Weaker Brands

Imagine using your newly bought laptop, and its battery lasts much longer than promised when you purchased it. You then recall that this no-name laptop was placed on the shelf next to a big-name laptop, which surprisingly had promised a similar battery life. You smile, feeling happy, because now you believe that the other brand would have performed similarly given its similar promise, but you didn’t have to pay as much.

Now, consider the opposite scenario: having paid more for a big-name laptop, you believe the no-name laptop would have performed equally well. Even though the performance was great, you shrug it off, thinking that the other, less expensive laptop would have performed just as well. Finally, imagine that the cheaper, no-name brand you bought performed worse than promised. You would clearly be upset. However, recalling that the more expensive, big-name brand promised the same performance, you might think you would have been in the same bad position, but at least you didn’t pay the extra amount.

Insights from Sport Competitions

Extant research shows that we almost always compare actual outcomes to what could have happened if we had made a different choice. For example, a study by Medvec et al. shows that silver medalists in sports competitions feel less happy than bronze medalists, even though second place is better than third. This is because silver medalists think about how they could have almost won, while bronze medalists think about how they could have almost missed a medal.

In many product categories, brands make numerical promises on important attributes such as battery life, tread life, etc. Retailers typically display these different brands on their shelves, allowing consumers to compare them directly. The current practice is that less-known or weaker brands mostly aim to promise more than their competitors to impress customers and make their way to the top. However, this strategy requires significant investment in costly performance improvements. Otherwise, consumers will eventually learn and punish brands that fail to live up to their promises in the long run.

Impact of Similar Claims on Consumer Evaluations

We conducted seven studies across diverse product categories, including an actual consumption study where participants used and evaluated noise-canceling headphones to explore how equal claims influence consumer evaluations. This means that consumers interacted directly with the product, providing genuine feedback based on their experiences. Findings revealed that consumers tend to evaluate weaker brands more favorably. This happens when both stronger and weaker brands present similar performance claims. However, this favorable evaluation only occurs when the claims are salient at the time of product usage. Through various studies, we demonstrated that consumers’ evaluations hinge on the similar claims made by brands during the purchase, allowing weaker brands to leverage their lower prices as an advantage. Additionally, we found that stronger brands could mitigate their disadvantages by claiming superior performance in key attributes, emphasizing the strategic importance of managing consumer perceptions in the marketplace.

Imagined performance of competing brands

The key to our argument is that consumers associate brands with similar promises in their minds, believing they are similar. We extend this finding by arguing that when consumers remember the similar claims of both brands from the purchase stage, they will imagine that the other brand would have performed similarly – even though they have no way of knowing it. This logic is akin to a student believing they would have received a better or worse grade if they had made different choices. Once consumers imagine that the other brand would have performed similarly, the less-known brand’s performance will appear more impressive. This perception arises regardless of whether the performance is good or bad. Moreover, the customer actually paid less for the brand, which enhances its appeal even further. If the claims at the purchase stage differ or the consumer does not remember the other brand’s equal claim, this advantage disappears.

Retail Strategies for Brands

Our work suggests strategic actions that both stronger and weaker brands can take in the marketplace. First, it offers managers of weaker brands a path to impress their customers without needing to invest heavily in performance improvements. Weaker brands should match the stronger brands’ claims and, if necessary, pay retailers to be placed next to them. Additionally, they can incorporate both numerical and verbal claims on their packages to increase the likelihood of consumers remembering them once they use the product. On the other hand, stronger brands are better off avoiding numerical claims (e.g., 20 hours of battery life) and instead using verbal claims (e.g., best battery life in the market). This strategy may make it more difficult for consumers to understand and evaluate the actual performance. Existing research shows that when it is more difficult for consumers to evaluate performance, they tend to give the benefit of the doubt to stronger brands and evaluate them more favorably. For example, Hilke Plassman et his colleagues found that consumers evaluate more expensive wines more favorably during tastings, even though they cannot objectively judge their quality. If the product category necessitates numerical claims, stronger brands should aim to outperform their weaker competitors in these claims. If this is not possible, they could seek placement further away from weaker competitors on retail shelves, potentially by paying the retailer. Alternatively, strong brands can highlight superior performance in other attributes to break perceived similarities with weaker competitors.

Ultimately, it is crucial to understand and closely follow these strategies in the marketplace to improve brand evaluations.