R. T. Narayanan

BRANDS often face the criticism for restricting consumer choice by raising entry barriers. This is especially so for MNC brands. With deep pockets and considerable power over the media, the latter are highly visible with their advertising helping them to snare high market shares. They can, therefore, continue to charge higher prices, which makes for large advertising budgets, in turn, creating entry barriers.

The criticism is somewhat muted today (Naomi Klein "No Brands") but every now and then gets revived in the context of globalisation (WTO meetings) or the intermittent diatribes of the Left parties in India against MNCs.

The criticism is not entirely without justification though no longer valid. Today, brands have to visibly pass on more power to consumers in order to survive and grow in the new environment where three key factors are driving this transformation the Internet, consumer activism, and Emerging Future Markets.

Even P&G, which has a $4-billion-plus ad budget and spends 90 per cent of it on TV spots, has dramatically changed the media mix to be more consumer- than seller-centric. The 30-second TV spot, on which P&G relied so much, may be living on borrowed time! Let us look at each of the key transforming influences.

The Internet

The Internet is the new conduit to the consumer, and advertisers have recognised its interactive advantage. It provides a new dimension to communication and distribution. A fragmenting media is steadily replacing the `one-to-many' to an almost `one-to-one' communication. The Web provides new ways of accessing finely targeted consumer groups. The interactive mode allows consumers to compare notes and judge brand performances.

Advertising over the Internet is becoming more like a dialogue. Media domination by large spenders is not possible. Its affordability is a major advantage for smaller players. Budding writers and not-so-well-known authors have found new outlets through

Amazon.com

and

ebay

. The Internet has led to better and wider information dissemination and, in the process, engendered more competition.

Consumer activism

Consumers are becoming more vocal about the values they hold dear, for instance, such issues as ecology, conservation, non-exploitation of Third World resources, and so on. So, they are willing to buy a brand or willing to pay more if the company appears to represent ideas/values that reflect such closely-held beliefs.

There are increasing instances of protests by consumers about what they believe are unethical and unhealthy management practices. Slowly but steadily this kind of activism has given consumers a lot of power in the choice of brands and, by implication, make companies comply with their expectations.

Related to consumer activism is another important development: The growing market for self-actualisation. Though at the upper end of the spectrum it is growing rapidly because economic growth has put greater disposable income in the hands of scores of young professionals. Being sensitive to various issues around the world that affect human welfare is at the bottom of some of these self-actualisation needs.

For instance, volunteering to do specified kinds of social work is one such need. Similarly, lobbying for preservation of various cultural artefacts, monuments, etc., is another. High on the agenda are, of course, new areas of self-development to improve one's marketability. And Web-based learning too is on the increase.

Future markets

Futurists, like Rolf Jensen, talk about the market for feelings running ahead of products and services. Jensen has identified six themes which he feels will create the great markets of the future;

  • that for adventures;
  • for togetherness, friendship and love;
  • for care (giving and receiving);
  • for the who-am-I market;
  • for peace of mind;
  • for convictions;
  • Not all of this may necessarily happen but, looking at it in another way, there is an emerging market for `re-defining experience and adding value'.

    Nike, for example. The `just do it' slogan gets right to the spirit of sport as is etched in the consumer's mind. It has re-defined the simple task of walking and jogging and added value by articulating a new experience.

    Another example is the Harley-Davidson motorcycle. The company has re-defined the simple activity of riding a motorbike. It has created the experience of strapping on some leather and riding down an open road, feeling the raw power of a Harley-Davidson and reviving the cowboy spirit of adventure and conquest.

    The H-D `tribe', with its own customs and rituals, gets together at some remote place each year and the company goes all the way to generate and sustain the passion and excitement. In the process, the company has introduced a sharing and collaborative component to the brand experience.

    Take Starbucks. What can be simpler than drinking a cup of coffee? Of course, the time, place, and circumstance can make all the difference even for such a routine activity.

    Among the three parameters, Starbucks has focused on `place'. It has re-defined the experience of drinking coffee by giving the consumer a third option in terms of `place' away from home and away from the place of work. What do you do when you sit there and drink Starbucks coffee? You just watch the world go by but the ambience invests the customer with a unique sense of tranquillity and a feel-good effect.

    All three examples are of what can be called `cult brands'. They redefine experience and add value brilliantly trivial pursuits get transformed into enduring passions! The power shift to consumers is becoming clear for survival and growth. Brands have to bond with the people's lifestyles and blend with the landscape; and new strategies have to be evolved to get there.

    (This article was published in the Business Line print edition dated February 10, 2006)
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