Small Business Systems


Quality is important, but brands are not built by quality alone. 

What is quality? 

Everybody thinks they can tell a high-quality product from a low-quality one, but in reality things are not always so obvious. 

  • Does a Rolex keep better time than a Timex? Are you sure? 
  • Does a Leica take better pictures than a Pentax? Are you sure?
  • Does a Mercedes have fewer mechanical problems than a Cadillac? Are you sure? 
  • Does Hertz have better service than Alamo? Are you sure?
  • Does a Montblanc pen write better than a Cross? Are you sure? 
  • Does Coca-Cola taste better than Pepsi-Cola? Most people seem to think so, because Coke outsells Pepsi. Yet in blind taste tests most people prefer the taste of Pepsi.

 Common wisdom blames the testing procedures. If Coke outsells Pepsi, there must be something wrong with a taste test that shows the opposite. Quality is a concept that has thousands of adherents. The way to build a better brand, goes the thinking, is by building a better-quality product. What seems so intuitively true in theory is not always so in practice. Building your brand on quality is like building your house on sand. 

You can build quality into your product, but that has little to do with your success in the marketplace. Years of observation have led us to this conclusion. There is almost no correlation between success in the marketplace and success in comparative testing of brands—whether it be taste tests, accuracy tests, reliability tests, durability tests, or any other independent, objective third-party testing of brands. 

Read Consumer Reports. And then check the sales rankings of the brands tested compared to the magazine’s quality rankings. You will find little correlation. As a matter of fact, the magazine’s success could be attributed to its ability to find little-known brands that outperform leading brands. In a recent ranking of sixteen brands of small cars, the number-one brand in quality was twelfth in sales. The number-two brand in quality was ninth in sales. The number-three brand in quality was dead last in sales. If quality translates into sales, the numbers don’t seem to show it.

Another factor in building a high-quality perception is having a high price. Rolex, Häagen-Dazs, Mercedes-Benz, Rolls-Royce, Montblanc, Dom Pérignon, Chivas Regal, Absolut, Jack Daniel’s, and Ritz-Carlton are all brands that benefit from their high price. High price is a benefit to customers. It allows the affluent customer to obtain psychic satisfaction from the public purchase and consumption of a high-end brand.

A better strategy in a sea of similar products with similar prices is to

deliberately start with a higher price. Then ask yourself, What can we put into

our brand to justify the higher price?

  • Rolex made its watches bigger and heavier with a unique-looking wristband.
  • Callaway made its drivers oversized.
  • Montblanc made its pens fatter.
  • Häagen-Dazs added more butterfat.
  • Chivas Regal let its Scotch whisky age longer.

There’s nothing wrong with quality. We always advise our clients to build as much quality into their brands as they can afford. (Hey, it might save you money on service costs later on.) But don’t count on quality alone to build your brand. To build a quality brand you need to narrow the focus and combine that narrow focus with a better name and a higher price.


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