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What's in a label?

A few years ago Windowbase, the independent database of fabricators and installers, conducted a survey of all window, door and conservatory adverts that appeared in local, regional and national papers in one week. Analysis showed a significant contradiction in much of the advertising: many firms promoted their company as the best, while also claiming to be the cheapest. To say this lacked credibility is an understatement. More than that, such an obvious mismatch does nothing for a company's reputation or the industry's.

In order to charge a premium price, a product must be perceived to differ substantially from similar items in the marketplace - to last longer, to look better, and in some way enhance the customer's life. The more crowded the marketplace, the more difficult it is to be accepted as different, and therefore 'premium' in the eyes of your prospects.

Perception is paramount - hence the importance of marketing and advertising. In order for companies to use the 'premium' label, they must recognise that people aspire to own products and buy into brands that reflect themselves in an ideal light - something that is better than they perceive themselves to be. Successful marketing strategies take this into account.

Companies often choose where to compete on a price basis - they'd like to charge a high price, so they promote a premium image, or they believe that price is what consumers go for, so they plump for the budget sector. Some perceive - rightly - that there is a higher risk of rejection when you go for premium but don't live up to buyer's expectations. Many just head for the 'safer' territory of the middle. It's where most firms land, but it is anything but safe. With more like for like competition in the middle ground, it is harder than ever to stand out, especially in mature markets like ours.

Changing position isn't easy - it's a big decision and needs careful thought. Premium isn't better; it's different and appeals to people looking for premium quality or service. And margins don't necessarily follow price. Premium also requires investment in the added value, and costs tend to be higher. Choosing where you compete must take account of the potential in your market - are your customers more likely to go for budget or premium?

Positioning matters. It's a good idea to review it regularly and ask: "Where are we? Who are our customers and what do they want? Where is the market going? Choosing the right label for your company is one of the basics of good marketing practice.

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