cowdery
01-28-2004, 20:58
Profits are good. Profits allow companies to pay their stockholders better dividends, which encourages more people to acquire the stock, which raises its price, which makes all of the stockholders wealthier. Profits also allow companies to expand, invest in infrastructure, invest in new product development, take risks on innovative products, hire more workers, pay better wages, etc. Naturally, if profits are good, more profits are better, so companies naturally and appropriately look for ways to increase their profitability.
While I seldom buy either whiskey, I have tremendous admiration for Brown-Forman and Allied-Domecq, owners respectively of Jack Daniel's and Maker's Mark. We've seen complaints on this board about how those evil, greedy companies have taken price increases or reduced bottle proof (effectively a price increase) in order to increase profits, but think about why this is possible. Why don't consumers simply abandon these evil, greedy products for some available, less costly alternative?
That's where the brilliant part really comes in. In both cases, the products have been so brilliantly marketed that their perceived value is actually higher than their retail price, as evidenced by the fact that their consumers have been willing to accept price increases without objection. In both cases, the brands have been positioned and adopted as badges of identity. The identity profiles are slightly different, but in both cases they appeal to sufficient numbers of consumers to keep sales growing and profitable.
We can deride these two products, mock their consumers and bemoan the fact that both firms seem to put more emphasis on making great profits than on making great whiskey, yet if I held stock in either company (which, sadly, I do not) I would have to applaud.
I also, as a marketer, feel compelled to point out that great marketing often can be the most cost-effective way to ensure a company's long-term profitability. (So please start investing in marketing again. I need the work!)
While I seldom buy either whiskey, I have tremendous admiration for Brown-Forman and Allied-Domecq, owners respectively of Jack Daniel's and Maker's Mark. We've seen complaints on this board about how those evil, greedy companies have taken price increases or reduced bottle proof (effectively a price increase) in order to increase profits, but think about why this is possible. Why don't consumers simply abandon these evil, greedy products for some available, less costly alternative?
That's where the brilliant part really comes in. In both cases, the products have been so brilliantly marketed that their perceived value is actually higher than their retail price, as evidenced by the fact that their consumers have been willing to accept price increases without objection. In both cases, the brands have been positioned and adopted as badges of identity. The identity profiles are slightly different, but in both cases they appeal to sufficient numbers of consumers to keep sales growing and profitable.
We can deride these two products, mock their consumers and bemoan the fact that both firms seem to put more emphasis on making great profits than on making great whiskey, yet if I held stock in either company (which, sadly, I do not) I would have to applaud.
I also, as a marketer, feel compelled to point out that great marketing often can be the most cost-effective way to ensure a company's long-term profitability. (So please start investing in marketing again. I need the work!)