Value over cheap: How Bembos in Peru gives McDonald’s a headache

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It is crucial to understand that the most valuable asset a company has is its brand and consequently it is important to have long term branding strategies to strengthen it, putting special emphasis in the construction of value. This in turn means that consumers look for brand loyalty and will avoid a purchase only decided by the low price.

Competing only for the lowest price without highlighting an attribute that truly differentiates your product will lead the consumer to link the product to a cheap price and as soon as another company enters with a lower price, will force you out of market.

We have heard so much lately of companies launching sales, deals, 2×1, etc. At the end of the day the consumer is really confused because of the continuous bombarding of offers with these type of short term strategies, up to the point that he hardly remembers which company is launching the bargain price. Short-term strategies may increase sales for a short period of time, but will leave no promotional inheritance to the company, so it is vital to identify the attribute that differentiates you from your competitors when planning the campaign. Thus, it is vital for companies to investigate and find out why the clients buy and pay close attention to the perception that current customers have of your brand. So, ask continually your clients what they like about your product but especially ask them about what could be improved.

The Bembos example 

Quality burgers such as thing one is how the Bembos, a Peruvian chain, beats out the American chains. (Photo: C-Monster/Flickr)

A Peruvian brand I think has done a wonderful job in this sense is Bembos, the local fast food restaurant that gives a hell of a headache to McDonald’s and Burger King in Peru. Bembos has positioned itself as the Peruvian hamburger targeting of young adults, in contrast to the American brands of fast foods whose target are children. Their differentiation not only lies in their target group but in the possibility of offering a real hamburger that can actually be served on a dish and is big, fat, juicy and full of Peruvian flavor — it doesn’t need to hide in between two big slices of bread!

The Bembos hamburger has it’s own personality and a rich Peruvian flavor: this point of differentiation and extra value is what enables the brand to charge more for its hamburger and thus avoid a price war with multinational companies.

In a marketplace where consumers purchase luxury products together with bargain products, it is important for companies to clearly communicate the reasons why they are selling expensive or cheap. The perception of a fair price occurs when the value is aligned with the price a consumer has in his mind and is willing to pay for this specific product or service. Therefore, it is easy to understand how fundamental it is for a company to know how to communicate that value to the customer and to do this one should start by getting to know the consumer and understanding if your competitive differentiation really matters to them.

Beatrice Ciabatti.

Beatrice Ciabatti is marketing director of ILARIA-PERU. Read more of her articles about business strategy and Peru.

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