Perception of Brands
After reading this article by Value Edge, it made me think about all the lower perceptions brands in Singapore.
While walking along Orchard Road, I came up with a list:
1. Bata (vs Charles & Keith, Pedro)
2. Bossini (vs Giodarno)
3. Giodarno (vs Top Shop)
4. OG (vs Isetan, Takashimaya)
5. City Chain (vs The Hour Glass)
6. Yoshinoya (vs Mcdonalds)
7. Burger King (vs Mcdonalds)
Other than looking at the brands, I believe we should also looked into the products. A mass-market product will definitely be better than a niche market product as their target market is bigger (Burger King vs City Chain) - Read Post.
Next, we should check if the brand has some sort of popularity in Singapore. A lower perceived brand may not mean it has lower sales (Giodarno and Bata).
If the brand is popular, we should review if these brands have any sort of competitive edge to keep the crowd from coming back (Bata).
Cash sales is also better than instalment plans sales or receivable sales. For receivable sales, such as pre-booking of products, will given clients the opportunity to back out. For instalment plans sales, such as jewellery, clients may want to have some sort of discount or the company may need to provide more fees to the banks, therefore reducing its profit margin.
Lastly, we should still drill into the financials. Not all lower perceived brands are value stocks.
On the other hand, Singapore is actually a small market and the popularity shown here may not be indicative of their popularity around the world. Most of these brands are also not created in Singapore, thus these brands focus may not be in Singapore (Unlike Charles and Keith).
In short, other than just looking at lower perceived brands, we should also look at;
- Competitive Edge;
- Cash Sales;
before we can conclude they are value stocks.
At the end of the day, sudden popularity may not last. Creating a legacy is more important.
PS: Most of the brands stated above are not listed companies in SGX.