If you’re read the article without knowing the authors you would think: What the hell is this?
This of course is branding too! The way you view the article will change the more you know about the authors. So maybe someone would think I am criticising this article because they are writing negative things about Business school – being employed by one. Had I been part of the faculty, maybe I would.
But please: “In other words, the reason that branded products command a higher price is because the product is (or was) better, not because it’s branded.” (As compared with generic products).
There are a lot of studies that will prove the opposite. People might even know that the generic product is as good as the branded one; still they prefer the branded one. And it’s all about the fact that it is branded. A branded product can command a higher price because people believe the brands story and they trust the brand. It’s all about branding!
But I do agree that J&J is in trouble. What surprises me with their brand strategy is the fact that they use their name (brand) on all these different products – and so different products.
The trend is that most big consumer companies (at least those with this amount of different product – and there is a different between products and product extensions here) choose a more diverified strategy. One example from my part of the world is Orkla who is one of the biggest consumer companies in Scandinavia. They have chosen a diversified brand model where each product is a brand in it self, while J&J have chosen a monolithic structure with one strong brand on many products.
If one of Orklas products had a problem, people wouldn’t stop buying their other products, because they would not know it came from the same company. This is the danger of J&Js strategy when they put all the eggs in the same basket.
So I agree that J&J has chosen a dangerous path. And all good Business School cases (as this will be in the future) are full of these examples.