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Thought provoking read as ever.
My view is that we should consider an alternative approach that views each customer as an individual business almost and treat those customers as individual profit centres. Because the customer really does define the success of the brand. And she doesn't do it by choosing brands based on their brand equity. So company attempts to 'value' the brand are redundant (although it may have a place when it comes to valuations but M&A are not on the radar of most companies and never will be).
As customers become increasingly demanding thanks to the tools that allow them to have almost instant fulfillment, brands that are successful will focus on immediacy, personalisation and other individual driven values. In other words, success will be determined by the brand's ability to incorporate, respond to, satisfy individual customer requirements. We're already seeing this with Mattel (Barbie dolls), Airbus (A380) and so on.
It may not apply to every company but then no branding rules do anyway.
Violently agree.
– Axle Davids
This seems to suggest that the economic purpose of a brand is to change the relationship between margin and volume. So that at a given volume a 'brand' can spin off more margin than a 'commodity'; conversely at a given premium a 'brand' can sell more thus increasing the overall contribution. Works on paper for the finance dude.
But why would people allow a new curve to be created in the first place?
If a brand is a proxy for information (as Chris Anderson suggests) then the transaction costs, search costs, discount for uncertainty all work in favor of a brand that has established itself as delivering to expectations. There is a premium for 'not thinking' which is why order of entry into a category is very important. The leader eliminates a lot of those hidden costs and thus reaps the benefits of market share.
Since decisions are made emotionally and then defended rationally; a brand could also be defined as an emotional short cut to a decision. This is where the creative side plays – aspiration, experiential, and fulfillment are all benefits that figure into our choices.
To the extent that marketing can understand how and why people make decisions then curve shifting is a distinct possibility.
Anthony,
Thanks for your response. You bring up a valid point. However, it is one we intentionally avoided. The purpose of this specific post was strictly to get marketing and finance to see eye to eye on the subject of branding. As we stated, “For the purpose of this discussion, let’s avoid the higher level view of a brand being an experience, a promise, an expectation… and stick with a more pedestrian definition of brand.”
Although, “Curve shifting” might make a good topic for a latter post. We’ll keep it in mind.
Cheers
Laura Savard
Brand Expressionist®