5 Buzzwords That Can Cost You Big Bucks

Burgeoning Craft Beer Industry Creates Niche Market For Limited Release Beers
Justin Sullivan/Getty Images
Consider these marketing terms: artisan, craft, curation, custom and designer. They may reflect the higher quality they promise in the merchandise, at a premium price. But be aware, they may simply reflect the premium price: Products with these monickers aren't always "all that and a bag of (artisanal) chips."

Caveat Artisan

Originally, artisan -- or the more fashionably pretentious artisanal -- respectively described a worker in the field of art and products created from scratch, by hand, in small quantities or by traditional methods.

The New York Times suggested retiring this overused term. Certainly artisanal/artisan can describe a superior food made by a small farmer that may be worth the extra shekels. However, an artisan soup manufactured by a major company like General Mills' (GIS) Progresso -- which retails for $3 to $4 for 12 ounces -- is stretching the term. Of course, Whole Foods Market (WFM) is the temple of artisanal food and has the prices to justify it. But large chains like Kroger (KR) and Safeway offer many lines of "artisan" foods, including in-store bakery breads.

Careful of Craft

Craft is commonly denotes attention to traditional, small-batch manufacturing, but it can be a weasel word to raise prices on all sorts of products.

Craft beer is an easily understood case. Kudos to Boston Beer Brewing (SAM), whose Samuel Adams beers resurrected the craft beer industry in America. But big-boy brewers like Anheuser-Busch ImBev (BUD) have introduced craft brews and are buying up small craft brewers.

The definition of craft has been debated in Congress for favorable tax treatment. Craft brewers want to make it official that a craft brewer is defined as one producing 6 million or fewer barrels a year. That said, craft beers -- or "premium" beers, as they are known in the industry -- can taste better than canned mainstream beers and may be worth the extra dollars.

Cautious About Curation

Curation has gained great popularity among retailers. It refers to a collection, ideally chosen with great care by a judicious buyer with taste. Curation particularly appeals to those lacking confidence in their own design prowess. Restoration Hardware (RH), the home goods retailer, is a great example. Past earnings calls could inspire a drinking game for how often "curation" is uttered. To be fair, consumers seem to like the concept, and the formerly ailing company has had increasing sales over the last few years.

"At its best, curation offers more than the products consumers already want," according to gcimagazine.com, a retail industry site. "It offers them products that they should want."

Curation is now morphing into a social media trend as retailers use what's trending on Facebook to edit their collections. This further dilutes the traditional meaning of experts' careful choices into a crowdsourcing mode and should make you even warier of "curation."

Steer Clear of Custom

Custom houses, custom cabinets, options on cars -- everyone knows these terms will cost you. But there is a new retail trend to customizing. Nike (NKE), Uggs from Deckers Outdoor (DECK) and Vans, a unit of VF (VFC), all offer options to personalize your shoes.

%VIRTUAL-article-sponsoredlinks%Taking a page from automakers' and homebuilders' playbooks, apparel companies are boosting profits by letting you customize. "I think the next trend ... is to have users really express, offer, and market their own content, their own persona, their identity," billionaire investor John Doerr said in seeing the future of his company, Zazzle, a cutomizing website. "Apparel is a way we express our identity."

Designer Danger

The status of a recognizable designer name can mean a 400 percent markup or more. A good example is designer eyeglasses. These can cost much more than $100 because these designer names on the earpieces (and who can really see them?) are licensed by eyewear monopoly Luxottica (LUX). Warby Parker, a small online company, is tilting at this enormous windmill with glasses $100 and under, as are Walmart (WMT) and Costco (COST).

Designer fashion, especially accessories like handbags, do offer higher-quality construction. Some brands, like Hermes and Chanel, are so revered that they can even be investment pieces that can be resold to collectors.

There is also the danger of paying up for counterfeits. Buying known fakes makes you more prone to cheat in other parts of your life, an effect dramatically studied in an experiment by Harvard Business School and Duke University. Not only were women who were knowingly wearing fake designer sunglasses more likely to cheat than those sporting the real thing, but researchers also found them more prone to believe in others' immorality.

The 20 Most Valuable Brands In The World
See Gallery
5 Buzzwords That Can Cost You Big Bucks

Brand Value: $27.8 billion

Percent Change v. 2012: 34%

What Happened: MasterCard's rank flew up nine spots this year to the 20th most valuable brand in the world, and Millward Brown VP Oscar Yuan attributes that ascent to "the growth of mobile technology." As consumers up their online shopping habits, brands like Mastercard and Visa reap the rewards for offering noncash payment methods.

Brand Value: $34.36 billion

Percent Change v. 2012: 34%

What Happened: "They're really into the big data," Yuan explained of the German tech brand, "So [the increase in value] is reflective of a consistent storyline: The growth of mobile shopping." SAP has the big data solutions enterprise companies need.

Brand Value: $36.2 billion

Percent Change v. 2012: 5%

What Happened: Walmart, however, has mastered the art of brick and mortar shopping. "You can't buy milk online," Yuan said. The retail giant has a large and loyal consumer base that is constantly growing - even internationally.


Brand Value: $39.7

Percent Change v. 2012: -8%

What Happened: Vodafone's 8% drop in value can be attributed to O2 and Orange's recent success. But at almost $40 billion, it is still one of the largest mobile carriers in the UK.

Brand Value: $41.1 billion

Percent Change v. 2012: -1%

What Happened: While Americans might have never heard of the Industrial & Commercial Bank of China, Yuan explains that in its home country, "the logo is ubiquitous." ICBC is the first of two Chinese brands in the top 20, a number which is largely due to the countries growing middle class.

Brand Value: $42.7 billion

Percent Change v. 2012: 15%

What Happened: "I think a lot of the growth is really tied to several consumer trends - and I'm talking about the need for consumers to shop online mobile devices," Yuan told BI. Consumers need to get the products they bought on the internet somehow, and that's where UPS comes in.


Brand Value: $45.7 billion

Percent Change v. 2012: 34%

What Happened: It's almost impossible for brick and mortar shops to compete with Amazon's wide selection, low prices, and mastery of the mobile marketplace - easily allowing consumers to buy anything from anywhere on their phone or tablet. Recent acquisitions of Audible.com and Goodreads also show the company's determination to dominate all aspects of mobile book consumption and sharing.

"There's no stopping amazon as they go international," Yuan said."


Brand Value: $47.7 billion

Percent Change v. 2012: 20%

What Happened: After acquiring Wachovia in 2008, Wells Fargo successfully expanded from a California-based bank to a national name. Coming from California also helped Well's Fargo's image with consumers considering that it was one of the few banks to remain unscathed during the financial crisis. "It also started a major rebranding strategy expansion," Yuan said.

Brand Value: $53 billion

Percent Change v. 2012: 8%

What Happened: Verizon got a boost after Apple opened its services to carriers other than just AT&T. While Verizon and AT&T's rivalry heats up, Yuan predicts that the competition will up both brands' game. "As data devices continues to proliferate, we will continue to see Verizon do well," he said.

Brand Value: $55.3 billion

Percent Change v. 2012: 21%

What Happened: "GE ... continued to be one of the most well respected consumer and industrial brands in the world," Yuan said. And the public is starting to see that it makes more than just light bulbs. General Electric has dedicated major marketing dollars to making sure that consumers know it produces everything from airplane engines to wind turbines to medical equipment. Hammering in its dedication to innovation, a recent ad campaign even enlisted the help of famous robots.

"In terms of B2B, GE is one of the most well respected brands," Yuan continued, citing that it was often used in business school case studies.

Brand Value: $55.4 billion

Percent Change v. 2012: 18%

What Happened: China Mobile is the largest mobile carrier and brand in China, so it's a no-brainer that it's one of the most valuable brands in the world. "There are more mobile phone subscribers in China than in the U.S.," Yuan said.

Brand Value: $56 billion

Percent Change v. 2012: 46%

What Happened: A key way to bolster global presence is to sponsor the Olympics. But that's not the only thing that upped Visa's brand value so drastically. As one of the most trusted names in non-cash payments, Visa has gained clout in the world of online shopping and mobile payments.

Brand Value: $69.4 billion

Percent Change v. 2012: -6%

What Happened: Marlboro is a top 10 regular, which goes to show that even though smoking is restricted in the U.S. doesn't mean that the rest of the world has laid off the habit. "Marlboro has consistently invested in the brand ever since its inception," Yuan said. "The rugged cowboy is very strong and consistent globally."

To put it another way, "about 25% of world's population are smokers, and they use it 5 to 10 times a day. I don't drink 10 bottles of water a day." That's getting your brand out there.

Brand Value: $69.8 billion

Percent Change v. 2012: -9%

What Happened: As a $70 billion brand, Microsoft is in great shape even in spite of a 9% value decrease. Microsoft is a powerhouse and has a reputation as one of the strongest tech brands in the business. But, Yuan notes, "with consumers, there's confusion as to where Microsoft fits." The company's fortune is largely tied with the PC business, but it has emerged on the mobile scene with the Surface and other devices. The company went through a major rebranding in the summer of 2012 to stay relevant.

Brand Value: $75.5 billion

Percent Change v. 2012: 10%

What Happened: AT&T is another company to gain value due to the increasing U.S. consumption of mobile products. For a long time, the service provider had an exclusive deal with the iPhone, so it became synonymous with the new technology. What's really interesting, however, is that even when Apple opened the iPhone up to Samsung and T-Mobile, AT&T's value didn't go down.

Brand Value: $78.4

Percent Change v. 2012: 6%

What Happened: "What's consistently impressive about Coca-Cola is its ability to innovate," Yuan said. "People think that soda consumption is declining, but Coke is turning the business on its head." For example, this year Coca-Cola released a series of freestyle machines which allows consumers and retailers to mix their own flavors of the soda syrup to make their own individual Coca-Cola. The company is constantly innovating and staying fresh.

Brand Value: $90.3 billion

Percent Change v. 2012: -5%

What Happened: Yuan noted that one of McDonald's gifts was the ability to listen to consumers' sentiments and adapt, particularly to growing health concerns. "It has come out with a much healthier menu with apple slices, oatmeal, and a Chicken McWrap which has done well," he said.

McDonald's is also gaining a stronghold in the coffee space, which should be an interesting new endeavor to follow.

Brand Value: $112.5 billion

Percent Change v. 2012: -3%

What Happened: At $112.5 billion, IBM's three percent value decrease is not a substantial figure. IBM is known as a company that consistently delivers year after year, Yuan told BI. And it is particularly hailed in the B2B sphere.

Yuan also noted that its Ogilvy-made "Smarter Planet" campaign, in which the company explained its plans to help clients innovate and make the world a better place, inspired consumers to believe in the brand.

Brand Value: $113.7 billion

Percent Change v. 2012: 5%

What Happened: Google has effectively taught consumers that it is more than just a search-based company. With maps, mail, shopping, and more, Google is integrated into everyone's lives. The company also made recent headlines about its new contribution to the hardware world in the form of Google Glass. "It will be interesting to see how Google Glass will contribute to the brand value, but now it's too soon to tell," Yuan said.

Brand Value: $185 billion

Percent Change v. 2012: 1%

What Happened: In spite of harsh Wall Street analysis and media speculation regarding Tim Cook's leadership capabilities, Apple continues to be a strong brand in the eyes of consumers - a major value measurement for Millward Brown. "Despite what the press says and stock market says," Yuan noted, "Apple in the eyes of the consumers is the gold standard."

In the last eight years, Apple's value has increased 1,045% - only topped by Subway's meteoric 5,145% rise. (Although Subway still hasn't broken the top 20.)

Those companies are constantly innovating to stay on the top.[Those companies are constantly innovating to stay on the top.]The gay pride Oreo, from Kraft's Facebook page.

Read Full Story