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Monday, November 08, 2004
The decline of brands
I wish I had a dollar for every session on brands and branding offered at every conference I ever attended; I could probably buy a new car. Brands are big, especially in the marketing and PR worlds. Maybe it’s time to focus elsewhere.
Despite a tripling in the number of brands available since 1991, consumers are less loyal to them. According to a study by NPD Group, about half of those who described themselves as highly brand-loyal a year ago now say they no longer are. In another study, only 4% of consumers said they would remain loyal to a brand if a competitor offered an improved product or service for the same price.
The studies and their implications are the subject of a Wired News piece that suggests…
The single biggest explanation for fragile brands is the swelling strength of the consumer. We’ve seen a pronounced jump in the amount of information available about goods and services. It’s not just bellwethers like Consumers Union and J.D. Power, established authorities that unquestionably shape people’s buying decisions, but also the crush of magazines, Web sites, and message boards scrutinizing products. Consumers have also become more demanding: Even as the quality and reliability of products have generally risen, satisfaction ratings have not budged, and in some cases they’ve actually fallen. Businesses are now dealing with buyers who are armed with both information and harsh expectations. In this environment, companies that slip up - even if it’s simply failing to match customer tastes - can no longer count on their good names to carry them through. And consumers have become far more willing to experiment with products, because the amount of information out there makes taking a chance far less risky. By the time you think about buying that digital altimeter barometer, chances are the bleeding edge has already weighed in at Epinions. This gives nascent brands an opportunity to succeed, but it also makes staying power a lot harder to come by. Welcome to the What Have You Done for Me Lately? economy.