Branding in the past was a business strategy that enabled companies to sell products at a fictitious markup - the brand being the imaginary factor that enabled this premium to be charged successfully.
In the future, branding will not be useful in this way, at least partly because of the following factors:
People are now able, thanks in large part to the Internet, to find out the truth behind the brands, in three important ways:
- They know where to get similar products cheaper.
- They know what ingredients are going into the brand - good and bad.
- They know about unethical labor practices.
Mass production techniques are getting better and better all the time.
Today, everybody can partake in brands because technology enables branded-looking products to be created quickly, cheaply, and in high volume.
Not only that, but cheaper imitation brands spring up so quickly that even a functional brand advantage is quickly gone.
Consider for example the "Skechers Shape-Up" sneaker (see below), which retailed for more than $100 when it first appeared on the market.
Now Payless (the Wal-Mart of shoe store chains) is selling the Champion "Pace Fitness Athletic" (see below), which looks very close to the original Skechers version, for less than half that price - about $40.
Consumers today vote with their pocketbooks, and we continue to evolve toward a greater sense of spirituality, and connectedness with an underlying life force that powers all things. Both religious devotees and the spiritually inclined are included this category.
- The book Faith-Based Marketing estimates that "America's 140 million weekly church-goers spend $5.1 trillion annually and support the businesses that understand and respect them with near-religious devotion."
- Lifestyles of Health and Sustainability (LOHAS) is a demographic segment "focused on health and fitness, the environment, personal development, sustainable living, and social justice." One site quotes LOHASjournal.com in estimating the potential U.S. market for spiritual products & services is $10.63 billion.
4. "Status Inflation"
When everyone has access to a version of a premium brand, the meaning of the premium brand is cheapened. There are three reasons why this inflation is happening:
- Imitation brands (as mentioned above)
- Secondhand sales, online and off
- Outright counterfeiting - obviously a crime, but also rampant and often conducted right out in the open (see New York Mayor Bloomberg holding a "closed" sign in a store full of counterfeit bags).
5. DisillusionmentTo put it simply, people are not fooled by marketing anymore. Not only do they see through the illusion, they are angry at such phenomena as photoshopped models and the distorted messages they send.
A good example was the scandal over the Ralph Lauren model fired for being too fat, who then appeared in a photo retouched to make her look abnormally skinny.
All of this does not mean that branding is "dead."
Branding remains an incredibly powerful tool, in at least 5 ways, despite the above trends:
- Businesses can use it to engage employees with the organization so that they are more productive
- Governments can use it to help citizens find the information they are looking for and help them ensure that the information they are getting is trustworthy
- Businesses as well as nonprofits, charities, and other socially responsible organizations can use it to promote ethical behavior and engagement with good causes
- Individuals can use their consciousness of it to help them avoid potentially damaging behavior (your actions create a lasting brand)
- Individuals can also use it more broadly to clarify their goals in life so that they do not waste time and energy on irrelevant, unhelpful, unprofitable, pursuits.
The key thing to remember is that in the past, branding was about creating fictitious value. Although your product may actually have a functional advantage over your competitor's, the underlying strategy was to take every possible advantage - both real and the kind you could psychologically manufacture - and pump that up.
So in the past, success meant making the product look as attractive as possible to one's audience group and then convincing them to purchase only your product, paying dearly for it.
No wonder so many people hate marketers.
Branding, though, is still alive and well. This is because people have learned (or should be learning) that the right way to use branding is to focus your personal or organizational skills to create actual value for the customer.
Nothing in life is inherently good or bad, and branding is no different. The utility of branding and its purposes can change. But the fundamental skills associated with it remain constant and are incredibly valuable to those who understand them.