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Leadership

When Being #1 Can Hurt Your Brand

Being the biggest can in some cases be counterproductive to the image you want to create.

Striving to be number one in sales or volume might be an appropriate goal for some brands or products—think movies, hamburgers, books, computers, air carrier routes. But certainly not for luxury products or services, where the value proposition is about prestige, exclusivity, and cachet.  

Why, then, are two luxury auto makers angling to see who sold more cars in 2011? It seems a bit odd, but in fact it's classic auto industry behavior.

According to the Wall Street Journal, BMW and Mercedes-Benz recently played a cat-and-mouse delay game about reporting their December sales because they were competing to see who would emerge as having the most sales for 2011. Each wanted what the paper called "bragging rights" to having the luxury car brand volume title for the year.

For some products, there is something to be said about trumpeting their popularity. Volume success signifies market acceptance and this "me too-ism" can be a factor in moving people towards a purchase. In fact, for some car lines, like hybrids or pick-ups, a "best seller" label can be an attractive marketing device. Back in the late '90s Ford and Toyota for years battled for the #1 spot in volume for their Taurus and Camry lines, even having price wars to move the metal so that there could be chest bumping and fist pumping for being #1. 

But the luxury segment?

Luxury is a concept related to a scarcity of something that people value. If everyone owned a yacht, there would be no prestige in owning one, just as there is no prestige in owning a garden hose. It's commonplace. Everybody has one, at least where I come from. Go to websites for luxury brands like Tiffany or Hermes and you'll find words like "premier" and "glamorous," but nary a word about revenue or market share. Timepiece maker (these are not "watches") Patek Philippe even touts "rarity" on its site as one of the company's values.

BMW and Mercedes are great companies making great cars, so I just don't get the "we're bigger than you are" focus. The award for #1 in quality or customer loyalty should be a huge source of pride and a powerful marketing weapon, but volume? Maybe I'm wrong, but I think few buyers of luxury goods make their choices based on wanting what the masses have. Snobbishness? Perhaps, but it drives people to reach deeper into their wallets to differentiate themselves from others. The reason a Maserati turns heads is because you don't see many of them. That's prestige. 

GM just released its numbers and it is once again the world's biggest car maker in terms of units sold.  That's a fine reason for celebration in Detroit and that #1 claim is good for its image.  But what is a good thing for a mass producer is not such a good thing for a luxury producer. 

Author Mike Hoban is a management consultant; he can be contacted at business-at-large@sbcglobal.net

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[Image: Flickr user Urban Mixer]