Why Brands Matter

Over the past decade or so there have been sporadic attacks against the idea of brands and branding. This is mainly when branding gets thrown together with the idea of globalisation, reaching an early crescendo with the publication of “No Logo” by Canadian author Naomi Klein in 2000.

Perhaps due to the fact that brand advocates tend towards an almost religious belief in the virtues of branding, or because they believe that people who subscribe to anti-branding rhetoric are arguably just a disaffected rabble who live off the benefits from the capitalism that they condemn, the people who should fight the fight on behalf of brands are generally fairly passive in its defence.

There are clear advantages for society in large numbers of strong brands being available in all categories, be it in hospitals, dishwashing liquid or washing machines. Below we look at why brands matter from a consumer’s point of view and why branding should be defended.

Choice
Although too much choice can have its own issues (i.e. selection paralysis), people fundamentally like having the power to choose between comparable options. The market sustainability of that choice is largely regulated by market forces that tend to sort out the number of brands that can be viably supported in a given market. 

To survive in this competitive environment, brands must meet their promises made to the market, or consumers will no longer support them with future purchases and will shift to an alternative. This is natural selection at work in a commercial sense.

Innovation
Given the competitive nature of brands competing for customers, there are two main options available for brands who want to improve their competitive position. 

One is to discount, giving them a price advantage over competitive brands. Whilst discounting can increase volumes sold, longer-term it also often tends to erode profit margins and brand equity. 

The more attractive alternative is to differentiate a brand through innovation around the needs and desires of target markets. This is enormously beneficial for consumers, who generally enjoy the benefits of such innovation without significant price increases (as competition tends to act as a natural dampener on price rises). Side curtain airbags in vehicles, large screen TVs and iPhones are just three examples of innovations in product design that have been driven by the desire of brands to differentiate.

Consistent Quality
When many brands compete in a category, there is simply no room for poor quality.  Consumers will vote with their wallets if they feel that product or service quality is below an acceptable level. And once a customer is lost, they are very hard to lure back. This forces brands to ensure that quality control is maintained at all times and leads to incrementally improved quality in the longer-term.

Brands were the original form of consumer protection, with the marks identifying the maker and origin of goods, such as on pottery in the ancient world, being used to guarantee quality.

Relevance
Any given market contains a multitude of distinct consumer segments, with different needs and desires, so having a one size fits all approach doesn’t work.

Where strong brands compete, brand owners attempt to differentiate themselves by segmenting their market and targeting different consumer groups with specific products suited to each group. They try to ensure that their product or service is designed to make it as relevant as possible to the needs of the target consumers. The desire of brand owners to be relevant creates a broad range of options for consumers to consider, be they wanting a loaf of bread or a new car.

Reputation
Reputations are earned, not given, and brands have to continually work to maintain the trust of consumers by continuously meeting or exceeding the promises they make.  Because most brand owners understand this, in general there is a natural inclination towards being a good corporate citizen. And for those that are not good corporate citizens, the surge in social media channels nowadays will ensure that few will get away with bad practices untarnished.

Selection
Reputation also makes the process of brand selection easier. Consumers choose between brands based on a range of variables, including value for money, function and (often) emotional connection. Brands that consumers trust act as a signal that they are a better choice and thereby make the selection process easier.

And reputation can run both ways, with consumers choosing brands that they have an affinity with or which make a statement about their status or beliefs.  Greenpeace sell t-shirts and Prada retails handbags and shoes based partly on this idea.

So, there are a few of the reasons why, next time someone nearby goes on an anti-brand rant, you should consider arguing for the defence of brands. Or take the easy route and ask them if they would prefer to live the life of a Russian in the 1980’s, with little choice and poor quality products that often break down. That should quieten their objections.

Simon Rowell is Founder and Managing Director of Australian branding agency Brand Intellect Pty Ltd.