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Branding
It seems that everywhere you go in the business world these days
people are talking about brands. Executives in practically every
sector of the economy will tell you that brands are their core strategic
assets, worth more than all of their property, plant, and equipment
combined. Whether they are marketing to consumers or other businesses,
senior managers have awakened to an astounding truth about their
activities. What isn’t matter is what matters.
Brands are intangible assets of extraordinary value
because they define a company’s holdings in a realm of scarce resources—attention
in the minds of customers. One might argue that brands— those curious
amalgams of design, messaging, and symbolism—characteristically
define the visual landscape of the modern world; they are emblazoned
on buildings and apparel, embedded in media and events. But their
ubiquity underscores a deeper truth. Successful brands signify relationships
between companies and customers. Brands that command consumer attention
sell products and services; those that don’t, don’t. (Or they sell
those products and services at depressed prices.)
We all know about companies that offer world-class
products and services but fail as businesses. More often than not,
the explanation has everything to do with brands. Companies that
command attention create the basis for dialogue with consumers
and markets. Dialogue, whether simple or complex, is the basis of
commercial relationships—and it begins with brands. It’s no wonder
that the most dramatic examples of branding have occurred in recent
years on the World Wide Web. The Web is a market economy born out
of dialogue; the problem it presents for marketers
is the sheer abundance of opportunities for conversation. Brands
that command attention on the Web have achieved enormous commercial
success, which, in some cases, has led to wealth creation measured
in the tens of billions of dollars.
It’s hard to believe that only a few years ago the marketing
world was abuzz with the implications of Marlboro Friday,
the day Phillip Morris cut prices on its Marlboro cigarettes. By
any measure, Marlboro was rated one of the world’s truly global
brands; some claimed that it
was recognized
by more people in the world than any other brand in history. If
it could
no longer sustain elevated prices for the products it was designed to sell, then this was
a sign that brands were dead. In their place, marketers reasoned,
companies would emerge with a panoply of generic products and private
label or retail brands.
In truth, Marlboro Friday was a false sign. And
it stemmed
more from the peculiarities of cigarette marketing in the 1990s
than from any change in the role of brands. Certainly, major brands
were under attack by new entrants of all kinds. But much larger
changes were afoot that would establish the pre-eminent importance
of brands in the 1990s and beyond.
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