Saturday, March 24, 2012

Why I Pay Premium for Top Brand Name Goods

I love my Tumi carry-on roller luggage. It's six years old. It's been to all corners of the globe, well not quite all but it has taken a lot of abuse. It usually fits nicely in airplanes' overhead compartment. But there are times when it has to sit alone down in the baggage compartment - especially when I want to take bottles of wine or shochu with me or when my contact lens solution doesn't quite fit nicely in a 3oz bottle.

Yes, it was expensive compared to similar sized roller luggage, but I thought "why not"? I look good with a Tumi; and besides, I've always wanted to be a cool frequent traveler with my Tumi luggage dutifully following me quietly behind me as I walk through famous airport terminals of the world - the likes of Changi, Heathrow, JFK, Charles de Gaulle, Incheon, Narita, and O'Hare.

So I was very disappointed and distraught when coming back from our vacation last summer from Florida, the airline temporarily borrowed my Tumi for a couple of days and had the nerve to return it to me (no pun intended) with pieces missing. That's right, my Tumi had one of its wheels torn out and missing. To make matters worse, by the time I discovered the damage it was past the 24-hour window the airline allowed o report and file a claim - 24 hours since the luggage was delivered to the concierge in our apartment building. Believe me I called and tried but with no avail. That was

The damage didn't look that bad. Perhaps all I have to do was to replace the wheels. So I dropped in at the Tumi store near our apartment and explained what happened. They said to bring in my Tumi and they'll send it to the main repair facility somewhere down in the South. The repair center will assess the damage and give me an estimate of the cost. That was last fall and I never got around to actually lugging (note: the wheel is missing) my damaged Tumi to the store.

Finally, I got around to taking my damaged Tumi to the store last month. The clerk assessed the damaged, filled out the work order, and asked for $20 (handling and shipping). I should get it back in 2 to 3 weeks. Well, it was actually more like 5 weeks. I called the repair center (at the number the Tumi store gave me) to check on the status. The parts were delayed so it took longer than usual - but its not fixed and my Tumi is on its way back to New York. Oh, and by the way, its no charge to me. That's right, I don't have to pay anything to get this fixed (except for the $20 handling fee I paid the Tumi store).

My Tumi arrived last week. All fixed up with a new set of wheels and a new handle. It gave me good six yeas and now I can get another six years out of my Tumi.

Products from top brand name do cost more. But you get "something" in return for the premium you pay. It could be excellent customer service, it could be unbelievable support, it could be the quality of the product, it could be the best overall customer experience, or a lifelong relationship. For many (although may not admit it) it could simply be the conspicuous showing of your wealth. Whatever that "something" is for a particular consumer, its worth the premium to purchase the good because the customer see the value of the "BRAND". The more consumers see that value, the more valuable the "BRAND" gets. It takes investment of time and money to build up the value of the "BRAND"; and requires continuous investment to protect that value because it can easily be devalued. There are brand owners who see the importance of investment; then there are also many brand owners who do not see that importance.

As a consumer, I pay the premium for the "BRAND" because I'm investing in the "BRAND" so that over time, I get that "something" in return. The tough part (as in any investment) is to discern what brands are worth investing in.

... or maybe I pay the premium because, damn it, I can and I just want to flaunt my wealth.

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