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The future of brands

Karthik Kumar
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Actor Shriya Saran, once a brand ambassador of Lux _ MOHAMMED YOUSUF
The Hindu Actor Shriya Saran, once a brand ambassador of Lux _ MOHAMMED YOUSUF

It is accepted wisdom that brands add significant value to a business because they signify its differentiation for which consumers are prepared to pay a premium.

At its simplest level, the construct of a brand is that it meets the ‘wants’ of the consumer, even while the underlying product meets consumer ‘needs’. Thus, products have tangible attributes that can be evaluated sensorially. Brands, on the other hand, are perceived as having characteristics that make them relevant to the individual. The main strategic benefits of this evolution have been two-fold; first, the perceived personal relevance of brands implies that the price it realises from the consumer is higher than the cost of the underlying product; second, since brands are defined by the personal relevance of the consumer rather than the product, they have straddled product categories – often across different sensorial needs.

The strategic value of the brand to an enterprise is clear. However, as we head into the teenage years of the 21st century and beyond, it is perhaps appropriate to re-examine the basis on which brands are constructed, and if ‘business-as-usual’ will continue to hold sway when it comes to branding.

The end of World War II seems a good starting point in examining this. This event signified the beginning of a long and sustained period of economic growth and social transformation – in the developed world, by the emergence of a large, consuming middle class and in the developing world, a period when the shackles of dependence were shed and more voices were added to the global marketplace.

Visceral needs vs aspirational wants

Looking back, at a simplified level, it seems that technology drove to sate the needs of the growing band of consumers. Thus, products became less expensive to produce and could be produced in ever-larger numbers, making them affordable. In a seeming paradox, though, as availability became more widespread, the needs started appearing to be fragmented. In actual fact, it wasn’t that needs were fragmenting – after all there are natural limits for sensory and tactile stimulation – it was that consumers’ needs were getting leavened by a desire to be seen differently than their peers. After all, say, how much ‘more pleasant’ could a perfume be without it becoming cloying and leading to its rejection. Thus, for example, enter perfumes with different notes and bouquets together with associations of privilege and elitism.

Brands, originally labels to establish ownership and provenance, thus became vehicles of aspiration. The wants were diverse and led to products being bundled with the wants, and thence brands. Since wants are rooted in deep-seated personal desires, their association with brands is also superficial, often derived from tenuous connections. Why should Wills be the epitome of togetherness, epitomised by ‘Made for each other’ or Lux the symbol of film-star like beauty? Nonetheless, these associations were perceived by consumers, embellished by advertising and deeply associated with brands.

Brands thrived in this environment notwithstanding the derision of social commentators. This was not because consumers could not reason out the superficiality but probably because consumerism was a means of expressing their affluence and their freedom from economic concerns of living.

Consumer wants at the crossroads

The development of brands thus far, as is apparent, has been shaped by personalised wants. Thus, it was about ‘me’ and ‘myself’. Coming as it did after periods of darkness that were characterised and sustained by poverty and strife, this wasn’t surprising. Will the drivers of consumer wants remain the same as we move forward?

Six emergent trends show that this is not likely to be so.

First, the belief that affluence will grow unabated has been punctured. Real incomes have not grown for the vast majority of populations of the economically developed world. In fact, in many parts of this world real incomes have declined, and many are living in poverty today. A scenario unimaginable even ten years ago.

Second, even though the growth of affluence has abated, consumers earn enough to meet their needs and wants for a comfortable middle-class life.

Third, the spread of education has vastly improved the ability of individuals to question the status quo. The consumers of tomorrow may well question their choices rather than ‘rationalise’ their response.

Fourth, information is available at their fingertips. Moreover, with new means of content sharing, news, particularly bad news, can spread at a rapid pace.

Fifth, technology today is no longer the bastion that can provide brand values. While technology will lead the way for newer products and services, its replicability can break through the barriers of proprietorship.

Sixth, the emergence of a more diversified world order. Gone are the days when the East was a provider of raw materials and resources, while the West fashioned value-added products and services out of these raw materials.

The implications for brands

Wants will not vanish. They will continue to be at the core of brand choice. However, the nature of wants will change and the ways they will be manifested will undergo significant change. Recognising these changes will be the key to brand successes in the future.

And, how might these changes happen?

The first impact will be in the notion of ‘wants’ itself. Access to a reasonably comfortable lifestyle will reduce the consumer's narcissism. Thus, the importance of brand as a signaller of ‘myness’, will reduce. On the other hand, the reduced narcissism has the potential to lead to a ‘collectivism’ of common good. Thus, the ‘myness’ of wants will likely be replaced by the ‘ourness’ of common good, leading to a new paradigm of ‘wants’.

The second impact will be in strength of the association, and conversely, the consistency with which the association is maintained. Brand ambassadors could endorse any product from cement to cosmetics and the reality would have been suspended. In the event, it didn’t matter that the brand ambassadors did not use the brand themselves, for the consumer did not really believe the endorser actually used the brand.

So far it didn’t matter that a brand’s promise could not be demonstrated. Consumers are still happy to buy Lux even if they believed that the star actually did not use Lux. Perception was the reality. The over 500 million hits on YouTube for the Gangnam style parody of the consumerist culture is testimony to our ability to laugh at ourselves. It doesn’t matter because the stakes of losing are inconsequential. After all, we do wake up from our fantasies and carry on.

Going forward this may not hold true. So, first, because the wants will be rooted in a reality rather than imagination, there would be ample scope to demonstrate the brand’s commitment to the reality. Take, for example, “Red Bull Energy Drink has been developed for people who want to have a clear and focused mind, perform physically, are dynamic and performance-oriented whilst also balancing this with a fun and active lifestyle.” Call it a vision statement if you will. The important thing is that Red Bull doesn’t treat this as an ‘advertising promise’ but also supports activities that demonstrate its vision. The most recent one, of course, was the unassisted, faster-than-sound, skydive of Felix Baumgartner. Second, given the velocity with which news travels, transgressions in a brand’s vision will quickly be caught out, and activities that are perceived to be mere lip service will rapidly erode a brand’s value. This is further compounded by the multiple sources of information – Web sites, comparison sites, social media, etc – that consumers have access to and use to educate themselves about brands.

It is not that brands will lose their importance. In the changed environment, to marketers, brands will mark the shift from ownership to assurance. Consumers will see the brand as an assurance that the underlying product is compliant with accepted standards.

The current reality for a majority of brands appears to be focused on driving sales rather than building brand value. Thus, one sees a messaging landscape littered with messages that drive sales, rather than activities that build brands. The combination of the mojo of market share and the desire for results, here and now, has probably caused this. The end result, though, is that brands, even in their current avatars, are being given the short shrift and the investments required for branding ignored.

This myopia not only erodes the existing brand values, but the elixir of growing sales also has the potential to blind marketers to the emerging forces. So, little thought is being given to how yesterday’s brands have to prepare for the tomorrows to come. The combined effect of this will be a day when an upstart supplants today’s leaders, leaving them little better than commodities unless they wake up.

Karthik Kumar is Director of the Chennai-based Rage Communications Pvt Ltd.

(This article was published on February 7, 2013)
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