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Computers vs Congress

Posted on 2015/12/17 by admin2015/12/14

Apple and McDonalds are doing far better than Congress and insurance companies.

gallup-consumers-industriesGallup poll last summer gathered public perceptions of various industries and agencies, and asked people to score them as either generally positive or negative. All the sectors that scored positive were in the private sector, with even airlines and banks scooting in under the wire. Every government sector and a few industries closely intertwined with federal protections and regulations scored underwater. This isn’t to say that everything government touches is lousy. That’s just the way people perceive it.

In all exchanges – voluntary or otherwise – value is largely based on the desirability of the outcome versus the cost. If the cost is zero, nobody expects much and nobody cares about the brand. If it cost a bundle – be it an iPhone or the IRS – people either see great value and award a great brand score (Apple) or they trash it (IRS).

This fundamental aspect of cost and perceived value is the first measure of the unspoken brand math everyone calculates in their minds. BMWs have a high price, but the perceived value of a BMW to middle aged men is high, so the brand equation works. The cost of the Department of Education is also high, but if the literacy of today’s average high school student is any indicator, the delivered value of public education is low, and this explains why the agency’s brand score has fallen faster than anything aside from Congress and Ebola.

For marketing strategists, this most basic of measurements is important. The higher the price of your product, the more perceived value it must deliver. A lady’s Hermès Etribelt handbag doesn’t offer any more functional value than a garden variety bag from Walmart, but costs $3,500. Hence, the perceived value is more important than the functional value. If there is a mismatch between perceived value and price, one or the other needs adjusting.

There is, however, no way to change the perceived value of Congress, so they should lower their costs. Returning their salaries to the Treasury would be a good start.

Posted in General Tagged branding, cost, price permalink

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