Creating a Brand: Win by Competing on Value, Not on Price

by | Jun 28, 2018 | Entrepreneurship

Trading is an action embedded so deep in our psyche that it was able to develop us as a species. Nothing would be as we know it if we were not able to put our trust in another human being and that way to trade with him or her. And although trading is something that we do from as long, as the humanity exists with the passing of time and the development of what we know as the market, the rules changed.

Nowadays, to buy something, most often than not, we need to put our trust in an abstract idea. An idea that often is a complex construction of words, design, and symbols which are selected in such a way, that they are sometimes able to provoke feeling so deep that we perceive them as a living organism.

These complex construction of words, design, and symbols are, of course, what we refer as a brand. And all of these brands get to be trusted, or untrusted, loved, or hated. Much like human beings, only if no one knows about the existence of a particular brand, no one feels anything about it.

On every other occasion, they provoke strong emotions in us. The most polished, and well known of these brands, of course, receive the most love… and hate. As cited in Walter Isaacson’s book, Steve Jobs claims that only the mediocre people, brands, and ideas do not provoke feelings in us. And these feelings could be either positive or negative, but never indifferent.

Therefore, the more love a brand gets, the higher it can charge for the products or services that it offers. But it’s not that simple.

Creating a Brand

Creating a brand is a complex and time-consuming task. Of course, you are perfectly capable of selling without putting all these efforts to build something trustworthy, but in almost every case by salting away energy, you will hurt your business’ future.

Thus, if you are about to count on your business to help you in any coming moment of your life, you probably should invest the time necessary for brand creation.

Creating a brand is, in essence, a single task. Yet, you could easily split it in a few, smaller and easier to achieve ones.

Even before you start building your brand, you need to know a few things which will help you not only with its creation as a whole but also with coping with the smaller tasks. Namely, those brand building elements are what your target audience is, what your core values will be, and what your competitive advantages will be.

Figuring these factors out will determine whether you’ll compete on price or on value.

Before we examine them, let’s find out the difference in those competitive advantages and why you should prefer the one over the another.

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Creating a Brand by Competing on Price

Pricing is a whole another set of knowledge, impossible to fit in the bound of this or any other article. Thus, it will be better if we look at it through the prism of brand creation.

Price competing is a vicious game. You may lower the amount you charge your customers to a limited amount. At a certain moment, the amount that you charge could reflect harshly on the existence of your business. When, and if that time comes, you’ll be unable to pay your duties. And while you were charging a, more or less, the symbolic amount for your services or products, the technology was developing right in front of you. And the next thing you see is someone who took advantage of this technological development and thus, was able to present the same(or even better) product for half of what you charge for it.

Mainly, because you were had a small profit margin to begin with, you couldn’t save any money in order to implement the new technology into your business. Thus, dooming your business to a certain disappearance.

There are of course businesses that are more than successful by competing on price. But they are merely exceptions that confirm the principle. That aside, the businesses that are using price as a main competitive advantage, are presumed mediocre in a global market where people can buy the desired products from every part of the globe.

Just think about the smartphone market. There are a few brands, selling value and everyone knows them. All the other brands compete on price, and most of them merely surviving.

Creating a Brand by Competing on Value

Continuing the last mentioned example (the smartphone market), I am sure that when a few phone manufacturers poped-up out of your mind. Automatically. You know them. I know them. Everybody knows them.

These brands, above all else, are absolutely capable not only to create a really beautiful product, but they are also the ones that you and I think about when the words ‘premium smartphone brand’ are said.

Creating a brand by competing on value is harder to accomplish. Yet, doing so will present you a lot of important options, unavailable for those who are competing on price.

  • Being at the top of the consumer’s mind – When we say a ‘premium brand’ almost every one of us is getting an idea of a brand that they perceive is a premium one. And the perception of a brand as the premium is associated with the higher price of the product or service, but also with a higher quality. We all love the higher quality. Thus, when we think of a quality in a certain field, we almost instantly (and always) think of a certain brand. Period.
  • Ability to charge higher – Value costs. Everyone knows it. And if you are about to create a high-quality product (or service), people will eagerly pay higher for it, once they know what they are paying for. And to let them know that they’ll get higher quality takes time, but also efforts and focus on the brand creating process.
  • Instant recognition, and thus, trust – Once you obtain the position of a high-value product in the mind of your target group, your brand will be so recognizable that, it will instantly perceive as trustworthy.
  • More distributors and resellers will be willing to sell your products – Of course, the more people know and search your product, the more distributors will be eager to work with you. Better contract conditions will be offered to you.


Key Elements of Brand Creation

The Free Web Hosting pioneer AwardSpace have a great article on How to Build a Brand Identity. Thus, it is virtually meaningless to cover the topic once again.

They’ve figured five main factors of brand identity building.


  • Defining key qualities
  • Knowing your target audience
  • Designing a unique logo and tagline
  • Web presence
  • Staying true to yourself

If you missed it, here is a link to AwardSpace’s article.

You need to keep in mind that all of the listed factors have to be congruent with each other. And for your newly created brand to be perceived as a high-quality one you definitely have to keep its integrity and independence.  One of the most obvious ways to do so is to build your brand’s web presence on owned domain.


Life is colorful. Businesses, as well as people, are very different from one another and do have their personal characteristics that help us to distinguish them from one another. That comes to show that every one of us can decide to whom to sell and how to sell. How to compete and how to win.

Honestly, it is possible to win by competing on value, as well by competing on price. But if you are after brand creation that will last, the chances are that the best approach is to go for value.

Valuable services and products are selling themselves automatically.

Taking care of your brand, and thus, of your customers is an always repaying effort. Investing the efforts and (if necessary) the money to get a nice website design, a company policy that serves the customers, and a few additional small but nice touches on the service as a whole, are actions that you definitely should consider when starting a business.

Whether you decide to compete on value or on price, you have the obligation to take care of your customers. And if you are about to do the latest, why don’t you give them the high-quality product they deserve?


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