Producing a Quality Brand

If you’re a video game fan, you probably had this past Tuesday marked on your calendar. On Nov. 8, Activision released its latest addition to the massively popular gaming franchise, Call of Duty. With over 55 million games sold and over $3 billion in revenue, the series is now arguably one of the most well-known entertainment franchises of all time. Its newest installment —  Modern Warfare 3 — had more than 1.5 million people lined up outside 13,000 stores the night of its release and is expected to reach record sales. Despite all of this, MW3 has recently received a lot of negative online criticism from its fans. On Meta-Critic, a popular website that aggregates online user reviews, MW3 received an average score of 3.1 (out of 10) based on more than 5,000 ratings. Much of the overarching criticism can be boiled down to something like this: “We were tricked into buying this game because of Call of Duty’s brand. You [Activision] made a product that is all marketing and no substance … and we’re pissed that we wasted our $60 believing you.”

It’s not clear whether these reactions are justified — it’s probably too early to make a definitive judgement on a product that is little more than a week old. The strength of Call of Duty’s brand, however, gave fans high expectations for the game. This behavior is not unique to fans of the Call of Duty series — today, more than ever, we rely on brands to make purchasing decisions. In today’s hyper-competitive business world, having an established brand can be critical to financial success. At the same time, brands carry implicit promises for their users. A brand has a responsibility to keep those promises, and not doing so can result in a business losing its most important asset: its customers.

Today, with more media platforms around, businesses are constantly vying for our limited time and attention. We’re increasingly bombarded —  with 1,000 ads on average per day, in fact — by companies trying to sell us something. New technology, however, has better enabled consumers to “call the shots.” We have Caller I.D. to deal with annoying telemarketers, automatic spam filters and pop-up ad blockers for our computers, satellite radio without interrupting advertisements, and DVR on our TVs to record our favorite shows and bypass commercials. Needless to say, we are increasingly tuning ads out. This means two things: one, it’s harder for companies to reach us. And two, an established brand, because it signals trust and familiarity in a world with too many product choices, is essential for consumers and businesses alike.

In a business world filled with intense competition, brands allow companies to charge a premium for their products. And most of the time, we’re happy to pay that premium. As consumers, we simply do not have time to research all of our everyday purchases — we’ll go with a Colgate toothbrush or Tide laundry detergent because they’re familiar and easy. Even for some of our more important buying decisions — like a new computer, kitchen appliance or car — it’s sometimes worth it to pay a little extra for a brand that has reliability and gives us “peace of mind.”

But brands are about more than just convenience, recognition and marketing. Behind any great brand, there’s a great product. And a truly great product keeps customers coming back again and again. There’s a reason the NFL, for example, is considered America’s most valuable sports league — it has a great entertainment product and consistently grows its fan base year after year. The NFL brand, like any strong brand, is based on an informal promise. From August to February, its fans expect football each and every Sunday, and the NFL is happy to deliver on that promise.

The problem, however, is when companies fail to deliver on their brands’ promises. And an even bigger problem arises when businesses take advantage of a brand’s wide recognition and success, and sacrifice product quality for short-term profits.

For example, up until recently Detroit’s automakers were guilty of just that. The Big Three of Detroit — General Motors, Chrysler and Ford — are century-old, American household names. But over the past 50 or 60 years, their brand names have slowly lost value in the eyes of consumers because of poor internal product decisions. Despite heightened consumer demand for small sub-compact cars, General Motors, Chrysler and Ford produced expensive SUV vehicles with low fuel mileage and downgraded quality standards. Detroit continued to produce expensive cars for the sake of the bottom line: Profits — in both margins and absolute dollars — for large vehicles were greater than those for smaller vehicles. Simply put, the Big Three placed profits over good products. And decisions like that led General Motors and Chrysler to bankruptcy in 2009, only to be “bailed out” by the federal government soon after.

What any company and any organization must realize is that short-term financial benefit is never an excuse for a poor product, especially when it could involve damaging the value of a strong brand name. If that happens, everyone loses — first the customers and then ultimately the company, its investors and its employees. The late Steve Jobs was well aware of this. In his latest biography by Walter Isaacson, Jobs states, “My passion has been to build an enduring company where people were motivated to make great products. [Former Apple CEO] John Sculley flipped these priorities to where the goal was to make money. It’s a subtle difference, but it ends up meaning everything.” It was Jobs’ relentless focus on product quality that helped generate massive profits for Apple in the late 90s after years of poor financial performance.

Today, it’s not a coincidence that Apple — the world’s most valuable company [3] in terms of stock market capitalization — is also considered the world’s most valuable brand, with an estimated worth of more than $153 billion. More organizations must understand that in the digital age, with more information available on everything we buy, the product is king. Offering products that consumers love and that provide real value is not just a good thing for people, it’s good business.

Christopher Henty is a senior in the School of Industrial and Labor Relations. He may be reached at chenty@cornellsun.com [4]. #TheStartupBiz appears alternate Wednesdays this semester.