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Branding Is not such a Big Deal

Posted: September 22nd, 2014 | Author: | Filed under: Business Strategy | Tags: | Comments Off on Branding Is not such a Big Deal

As usual, just one single remark and the spark caused the fire… I simply said: “I don’t think brands play such an important role as in the past” and I didn’t have time to explain my argument before an avalanche of negative comments from my dinner colleagues buried my statement. Thus, be this humble post an explanation of my incendiary point of view.

The new information environment allows consumers to have a better and more precise understanding of the quality of the products, services, or experiences they are going to purchase. As a result of this, brands do not play such an important role as a quality factor.

When consumers pay attention to what it is said about a brand in the Internet (social media, blogs, forums…), they forget about previous experiences and the loyalty level towards that brand decreases. Previously, when it was difficult to foresee quality, brands were an easy shortcut to know what was good or bad, and even also the origin: coffee from Colombia, watches from Switzerland… For instance: some years ago BMW cars were positioned as reliable vehicles with insurmountable engines -again the origin: the best cars, from Germany. Nowadays this positioning is much more difficult to be accepted, when consumers use sources of information different from the hackneyed marketing messages from the German brand.

Nonetheless brands are still valuable assets regarding name recognition, emotional attachment, and maybe prestige, but brands are not paramount upon gauging the quality of the product. The positive aspect of this brand decline is related to competition: since brands are not any more a quality index, the entry barriers for new players in the sector diminish.

As a conclusion, a statement by James Dyson -inventor, industrial designer, and founder of the Dyson company-, in a conference in 2012: “I do not believe in branding. What makes us good is the last product we have launched to the market”.

I hope my dinner colleagues may understand my point of view now.

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