• BusinessWeek, Monday, April 18, 2011 10:30 AM

Steve McKee, president of McKee Wallwork Cleveland, says brand marketers can fight commoditization pressures without succumbing to a price war. "While many companies host sales, offer discounts, and flood the market with coupons, more enlightened brands understand that it's the denominator of the equation that matters," he writes.

McKee says brands merely add to a cut-rate mindset by offering their products at prices to compete with generics. He writes that margin-focused brands succeed by doing the opposite: improving their product or service, by adding features and benefits, improving packaging, and enhancing their image. Which, he says, is where advertising comes in.

"Advertising, all by itself, can improve the 'value' side of their price/value equation. Michelin, Bayer, and Fiji are all premium-priced brands that, logically speaking, shouldn't be able to command a premium. How they do it holds lessons for us all," says McKee. But he also points to a joint Nielsen Analytic Consulting and Institute of Practitioners in Advertising (a UK-based trade association) study showed that those brands whose share of voice exceeded their share of market were better able to catch up with competitors. "The study emphasized the importance of the advertising message as well, but it made the point that share gain can happen, independent of message content."

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