This is Part One of a three part series. It discusses what is, in effect, the driving force of reading online reviews of products and services – that is when money is scarce, no one wants to make a bad purchase.

John Penrose thinks it’s a good idea, but do we?

The new UK Government’s minister of tourism thinks that phasing out the existing star rating system for hotels makes a lot of sense because it’s “out of date” and “doesn’t reflect value for money or what guests want”. He argues that consumer-led reviews on the Internet are the way forward and are central to the Government’s tourism strategy for the future.

Of course, scrapping the roles of the independent assessors who grade hotels will patently save money and maybe their costs do not reflect value to the public any more. Moreover, consumer reviews are usually fresh up to date, contrary to the hotel assessor’s verdict which may be well out of date by the time a new tourism guide is published.

But none of these points are the real issue. That’s because whilst we all increasingly read online product and services reviews, recent malpractices that have come to light provide strong evidence of serious fraudulent manipulation. The real debate centres on the contradiction of reading reviews numbers going up, whilst credibility and trustworthiness of what you’re reading is going down.

So is scepticism regarding consumer provided reviews to be the new norm? Well, there are lots of reasons, both large and small, why you should be guarded against what you read. For in the middle of a recession when we all have less money, no one wants to make a poor purchase that offers bad value. Do you really want to buy a CD album at £10 say, without having never heard it first, listened to a few tracks or read a critics review? Probably not!

Part Two of this three part series will detail some of the scams and malpractices that you should be aware of.

Firstly, in PSM the client purchases are generally intangible, for example, a conveyance on a house. The client may never see the conveyance form as they will be kept as security by the mortgagor, usually a bank or building society. Secondly, the service may be based on the reputation of a single person such as a hot shot lawyer such as Nick Dawson, the highly recognised solicitor for North West England celebrity speeding cases. Thirdly, with PSM, it’s generally more difficult to compare the quality of similar services unless you are talking a ‘commodity’ such as conveyances on new houses. And finally, the professional services buyer generally cannot return the service unlike a faulty product such as a kettle.

So whereas in product marketing, marketeers talk about the traditional “4 P’s,” Product, Price, Place, Promotion, in PSM there are three additional “P’s” consisting of People, Physical evidence, and Process. Charles Revson, one of the founders of Revlon, the Global cosmetics company once famously said” In the factory we make cosmetics, in the store we sell hope” This especially true of many litigants going into expensive court cases.

Put simply, a brand is a name or logo that helps a consumer what to buy. In business to business commodities such as steel, that name might just differentiate one business from another – after all steel is pretty much the same wherever you buy it; price is the only discriminator.

However, in consumer products, that name or logo should be a psychological symbolisation of how people think about that particular business or product. The best brands create a special relationship with customers, based on intangible qualities that evoke strong emotional responses. In essence, a brand will be a durable, unique business identity (Cadbury’s have been around since 1801), often protected by trademark and patents, and inter-twined with perceptions of high quality, personality, origin, and pleasurable experiences. The whole brand experience should be holistic – the whole should be greater than the sum of the parts. So having spent time, creativity and resource developing a brand, what sort of benefits might be expected.

1. Lowering the purchasing risk. So when someone feels under pressure to make a wise decision, he or she tends to choose the brand-name supplier over the no-name one. As the saying goes, “You’ll never be fired for buying IBM.” Similarly, buying PG Tips tea bags over a supermarket’s generally inferior own label bags will always work out a good decision.

2. Building a brand helps customers shorten their decision-making process, by creating a perceived knowledge of what they are going to buy, before they buy it. Most people, for example don’t think long and hard before buying a Mars bar! In a similar vein, great brand images and logos can create memorability which in turn, help shorten the decision making process. For example, BP’s flower logo indicates inter alia, good clean forecourt, most likely a well-stocked convenience store attached and, above all, quality petrol. FedEx’s purple and orange van livery suggests the ubiquitous and quiet understated efficiency of this global delivery company.

3. Brands create and reward the confidence in a business, product or service by doing exactly what the customer already believes it will do. A can of Coke will refresh you and always taste great, year on year – it always delivers the expected emotional response

4. Purchasing a branded product should evoke an emotional feeling in the customer. For example, Giorgio Armani makes his clients feel good about what they wear, feel good about buying clothes from his shops, and helps send out a positive fashion statement to the client’s peer group.

5. Good brands create loyalty which means consumers are more likely to buy that product or service again than competing brands. People who closely bond with a brand identity are not only more likely to repurchase what they bought, but also to buy related items or brand extensions of the same brand, to recommend the brand to others and to resist the lure of a competitor’s price cut.

6. Brands command premium prices and therefore help generate greater turnover and profits.

7. Brand advertising can have latent and long lasting effects. Seeing your adverts regularly in newspapers or displayed on the sides of local buses can all be very positive. A consumer might not want your offer just now, but in the future when that need or desire occurs, your brand could well appear in the persons mind as the solution.

8. Brands have the ability to spawn extensions such as KitKat and KitKat Orange. With a well-established brand, you can spread the respect you’ve earned to a related new product, service or location and more easily win acceptance of the newcomer. Most UK consumers have lost count on how many extensions the Virgin Group have launched.

9. Great brands can create greater company equity. Cadbury’s in the UK is currently defending a £10 billion hostile takeover manoeuvre from Kraft of the US (14.12.2009). The company’s defence is based primarily on a perceived undervaluation of the iconic Cadbury brands. Brands valuations are often classed as intangibles in the balance sheet

10. Lower marketing expenditure is possible. Although you must invest money to create a brand, once it’s created you can maintain it without having to tell the whole story about the brand every time you market it. For instance, a jingle or tune associated with a brand can be used on its own to generate excitement or interest. The James Bond Theme or Intel’s TV jingle are good examples.