August 28, 2006

End of a Brand

I just finished watching Andre Agassi compete in the first round of the US Tennis Open. This is Andre's final US Open, and 20,000+ spectators literally willed him to win this evening. Eighteen years ago, Agassi was not the most popular person. But this evening, with his career nearly over, people celebrated the brand known as "Agassi".

We do the same thing when a co-worker decides to leave a company. We forgive past transgressions, and celebrate all of the positives.

We don't do the same thing when a brand is tired and weak, and ready to retire. We are more likely to bury a tired and weak brand. Few people rallied to support Montgomery Wards, when it was tired and weak. Not a lot of consumers are showing loyalty to GM or Ford, at a time when they are tired and weak. With brands, we are much less forgiving than we are with co-workers. Given the amount of money that changes hands between consumers and brands, and the ways that a brand will fall on the side of "increasing shareholder value", we probably should be less forgiving.

The lesson of the past two days, for me, is that there really isn't a relationship between customers and brands. And if I am wrong, I speculate that the depth of a relationship between customer and brand is very, very shallow.

2 comments:

  1. Anonymous6:03 AM

    Kevin:

    Excellent proposition. I would add that, not only is the relationship relatively shallow, but it is rooted in "utility," the classic element of economics. If I get the same utility from a non-branded box of soda bicarbonate as I do from the venerable and instantly recognizable Arm & Hammer brand, and if the price is less, I will likely choose the non-branded product, thereby invoking the ever-present economic element of "substitutes."

    If we look at strong versus weak brands, there are almost always echoes of utility and substitutes within the intellectual dialogue of the customer's decision-making processes. As a relevant example, the Ford Motor Company, in its present state of extremis, is failing to honor its extended warranty policies and, as a partial consequence, the brand has deteriorated due to a failure of utility (in this case, satisfaction). Of course, there are substitutes to that tired brand, and the marketplace has decided that Honda, Toyota, and other brands offer greater satisfaction and, therefore, greater utility.

    Like the four cardinal elements in the upper right corner of the Periodic Table of the Elements, there are only four classic elements to the branding issue: 1) Utility; 2) Substitutes; 3) Demand; 4) Supply. These are a linear relationship. All demand and--as a result--supply begins and ends with utility and substitutes. For a brand to be relevant and successful, there must be--in this order--utility, satisfaction, demand and supply.

    Marketers within any and all channels would do well to harken back to Economics 101 and reflect more often on the concept of utility.

    For the textbook study on massive brand failure, look at the entire airline industry. Brand value is almost non-existent because the entire industry is a 75-year failed experiment in transportation. There is no utility, no satisfaction, no profitability, and no substitutes; it cannot exist in its present economic structure and is, therefore, doomed to failure, bankruptcy and a subsequent re-invention of transport systems and structures. Unfortunately, because there are no substitutes, there is only demand and a poorly managed, inefficient, unprofitable supply. If there were high-speed inter-continental rail systems, both short and long-haul, there would be a lessening of demand on airlines and the system would either crumble entirely due to effective substitutes or be scaled back to something that delivered competitive utility at a competitive price.

    But, nowhere in this equation does brand have any relevance.

    Is it possible that we are in the sunset era of brands?

    Don Libey
    Libey Incorporated

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  2. Kevin H.11:30 PM

    Well said!

    It does seem to me like a generation of marketers need to read your statement, and re-invest in marketing strategy, focusing on the concept of utility.

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