Is the internet killing off brands?
Brands are one of the most valuable assets of a company, and account for more than 30% of the stock market value of companies in the S&P100 index. Given the muscle power companies put behind their brands, it should come as no surprise that globally, Ronald McDonald is better known than Jesus! Historically, brands grew in response to the needs of consumers stuck in an information-poor environment. Brands gave consumers a certain level of assurance about the quality of the product or service. This continues to hold true in some areas such as pharmaceuticals, where many consumers prefer, for instance, to buy the more expensive branded Tylenol over the generic acetaminophen (certainly true for me, after a bad reaction to a generic). However, the rise of the internet and the growth of e-commerce have given consumers access to more information such as detailed product data, expert reviews and user reviews, and now 80% of consumers read online reviews before making a purchase. So are brands dying? Maybe not. This is because while the information-providing aspect of a brand may not be that relevant any more, a brand still continues to provide meaning and satisfies the emotional needs of a consumer. And therefore brands will continue to influence a purchase decision, though may be not to the same extent. With competition getting intense in almost every industry, and product differentiation getting increasingly blurry, a strong brand may be the only reason consumers buy a product over a very similar one. However, brands do seem to be on shaky ground. Social media can sway consumers powerfully, and the speed of information dissemination on the internet can topple a brand far more quickly than before — witness the recent fall of the Lululemon brand. Also, millennials are said to be less brand loyal than their parents were, so marketers will have to work harder today to win the millennials’ wallet share. As in almost every other sphere, the internet is changing the rules of brand management as well! Written by: Gayatri. Also Read Here