Brand power, or consumer power?

A brand is more than a name, a logo, a company or a product. “A brand is a product’s total presentation beyond merely its functional characteristics. In other words, a brand carries more evocative associations which, added to the company’s product functions, will discriminate the company in the minds of all its different audiences: customers, opinion leaders, partners, or suppliers.” (Mallik & Sadhna, 2009, p.303)

Brands have tremendous power and influence, providing benefits to both consumers and companies. Sure, part of a brand is a name, a symbol, an icon, but it is also the embodiment of the collective associations, benefits and MEANING that it adds to consumers lives.

Consumer benefits

In our modern world where consumers are riddled with options wherever and however they shop, brands provide an easy way for us to make purchase decisions – they provide consumers a sense of certainty around the benefits they’ll receive. Brands also act as status symbols for us all, “by owning a Mercedes I am proving to everyone that I am a successful person”. People don’t buy products, they buy better versions of themselves.

Mercedes - Brands

Company benefits

For companies, brands build competitive advantage in a market place crowded with products and information. Products can and are often imitated – but for consumers the perceived quality consistency, the positive associations and the status symbol that brands provide, means that companies can charge higher prices for their branded goods, whilst maintaining consumer loyalty.

Taking this a step further, brands have a measureable financial benefit for companies, for example the Qantas 2013 Annual Report lists ‘Brand Names and Trademarks’ at a value of $22 Million under Intangible Assets.

Do brands have a responsibility towards greater society?

Many believe that brands have the power to make the world a better place. We are seeing the rise of sustainably focused brands such as the Thankyou Group who are doing inspirational things with multiple product lines and a marketing campaign that sells their brand and purpose as a company.

Consumers are seeing the wider benefits that such brands are providing and recognising these as benefits for themselves (i.e. some consumers are willing to pay more for brands when they value the greater benefits to society). But the Thankyou Group are a not-for-profit organisation, and by definition their purpose should be aligned to the good of greater society.

What about one of the biggest ‘House of Brands’ companies in the world, Proctor & Gamble (P&G)? With over 50 leadership brands that are among some of the world’s best-known household names, the advantage P&G have with their House of Brands approach is that they can provide different products and target different consumer segments without confusing their image (Iacobucci, 2014, p. 82).

Part of the purpose statement of P&G states “We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come”. Their bio on sustainability does demonstrate that they’re making efforts in this is space:

But what does this really mean? Until 2014 brands within P&G still used Palm Oil that contributed to deforestation. In fact the change made in 2014, according to Greenpeace, was the result of consumer power and a huge campaign against the company to (begin) cleaning up its act.

P&G - Palm Oil

P&G’s sustainability site also has a section on animal welfare and alternatives to animal testing – they pitch themselves as market leaders with their efforts and investment into alternatives to animal testing. However, by their own admission they are not 100% clear of animal testing and P&G are still listed on PETA’s list of companies that DO test on animals. Will this naming and shaming by PETA cause consumers to turn away from the brands of P&G? Will we associate P&G with cruelty towards animals and look for alternatives, making them lose brand equity. A unique thing about our digital age – if the cause resonates with enough consumers, they have tremendous power. Both to research and expose company activities, and also to find alternatives and walk away from undesirable brands.

What do the above examples demonstrate? Firstly it confirms what we know – companies aim to make profits, the use of ‘bad’ Palm Oil was significantly better for P&G’s bottom line. It took conservation groups and consumers to unite and demonstrate that they cared about this issue for significant change to be made. With such a spotlight on the issue P&G faced negative brand equity (a true financial cost), if they chose not to act.

The learning is that if companies won’t make sustainable change of their own accord – they may eventually respond to consumers. If consumers’ show that value from brands is not just based on their individual benefits but also those of greater society, companies can occasionally be forced to respond in order to maintain brand power.

 References

Iacobucci, D 2014, Marketing Management (MM4), Student Edition, South Western, Cengage Learning, Mason USA.

Mallik & Sadhna, 2009, Brand Management (1). Jaipur, IN: Book Enclave

Qantas 2013, Qantas annual report 2013

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