Since the idea of a brand has been around for at least 5,000 years, why is it such a big deal now?
Simply, our society has moved from an economy of mass production to an economy of mass customisation, and our purchasing choices have multiplied. We’ve become information-rich and time-poor. As a result, our old method of judging products – by comparing features and benefits – no longer works. The situation is magnified by competitors who copy each others’ features as soon as they’re introduced, and by advances in manufacturing that make quality issues void.
Today we base our choices more on symbolic attributes. What does the product look like? Where is it sold? Who are the kinds of people that buy it? Which ‘tribe’ will I be joining if I buy it? What does the cost say about its desirability? What are other people saying about it? Finally, who makes it? These days, what is more important is the degree of trust I feel towards the product, rather than an assessment of its features and benefits. That is what will determine whether I’ll buy this or that product. If I trust the maker, I can buy it now and worry about the rest later.
The Buyer’s Perspective
From the buyer’s perspective, a brand acts like an insurance. A brand on the side of a cola can says, ‘I’m going to taste the same every time’. In clothing, a brand on a tag says ‘even if you don’t have taste, you’re still in fashion’. In sales, the buyer often doesn’t know what he wants or what she’s buying. As a result, a brand says ‘even if you don’t know what you’re buying, you can count on us to help you figure it out in a way that’s going to benefit you’.
A brand insures the buyer against needing to know everything before they buy, and it insures them against risks after buying.
The Seller’s Perspective
The basic purpose of a brand from the seller’s perspective is to help educate the potential buyer and reduce the impact of price on the purchasing decision. Doubters of brand value will argue the real reason behind the greater margin is better quality of service, or reduced risk based on track record. No doubt, these come into play. At the same time, alumni from these companies will attest that the differences are not as great as might be imagined.
The bigger difference occurs at the margin (bottom line) – and in terms of ‘permission’.
Look at out for the Five Brand Permissions in my next blog posting next week.