Monday, February 18, 2019

Will Brands Even Be Around in Ten Years?



As a brand strategy consultant, I have ridden the upward trajectory of brands and branding for the past 20 years. In the 1980s and before, brand management was mostly practiced by consumer packaged goods (CPG) companies. By the mid- to late-1990s, large companies were beginning to manage their corporate brands at an executive level. This was the timeframe during which I was put in charge of the Hallmark brand. Since then, brands and brand management has become ubiquitous. I have been called upon to brand museums, universities, trade associations and other not-for-profit organizations. I have also branded municipalities and geographic regions...and restaurants and medical practices and health care systems and medical devices and individuals. It seems that everything is branded these days. 

And yet, there have always been prophets predicting the end of brands. Naomi Klein argued against brands (and, in particular, the consumptive environment they fuel) in her book, No Logo in the late 1990s. And many have come out since then either predicting their demise or calling for their demise. In fact, I have always wondered how long the phenomenon of branding would last. 

So, here are my arguments for and against the end of brands.

Arguments for the end of brands:

  • Big data analytics, automated sales funnels and individual targeting make brands far less important in the purchase decision process.
  • Product and service quality have gotten so good across the board that almost any brand will meet or exceed our needs. Therefore it doesn't matter which brand we purchase.
  • Information access provided by the Internet creates much greater brand transparency and gives consumers much more power over brands.
  • No brand lasts forever and with the rate of technological disruption, increasingly, brands will come and go in a matter of years rather than decades or centuries.
  • Because of the maturity of markets, few brands are really that different from any of their competitors.
  • Most markets have gotten so hyper-competitive that most purchase decisions are now based on price.
  • Mergers, acquisitions, venture capital (VC) takeovers and other significant changes in ownership lead to inconsistent brands that cannot be relied upon. This reduces the value of brands.

Arguments for the end of all but a few mega-brands:
  • Very simple, Amazon, Google and Facebook will end up owning the world. No other brand will matter.

Arguments for the continuation of brands:
  • Brands are all about relevant differentiation and unique value propositions. If your products or services do not have these, they are commodities and their sales will largely be driven by price. No one wants this.
  • While technology lowers industry entry barriers and allows for the emergence of new brands at a very rapid pace, it is only the long-term reputation of a brand that guarantees quality, service and desirable attributes. Brands are the way to break through the marketplace clutter to purchase something that you know you can rely on.
  • Brands imbue products and services with human qualities. This is the only thing that can result in emotional connection with consumers and consumers are mostly driven by their emotions. 
  • Strong brands still result in many financial and other business advantages: increased sales, market share, profitability, stock prices, shareholder value and customer loyalty, decreased price sensitivity, increased ability to charge a price premium, increased ability to attract and retain talented and motivated employees and increased bargaining power with business partners.
  • Brands can share powerful values with their customers, so much so that they can become the self-expressive vehicles for those shared values and the organizers of communities for people who share those values. This is an extremely powerful "glue." 

As you can see, there are some arguments for brands slowing fading away and arguments that they will continue to be an important part of our world. I would love to hear your thoughts on this.

2 comments:

  1. I work in FMCG - brands will always be around due to the way the retailers interact with brands which is different to the way consumers do - meaning bigger brands have stronger relationships with the retailers that far exceed small brands capabilities, and ensure the ongoing survival of the bigger brands

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