Wednesday, August 11, 2004

It's Downhill for Brands

A little change of pace.

With all that's going on in the world these days, we tend to be distracted from things that impact more directly on our way of life.  A changing geopolitical world coupled with the information age, have given new meaning to nostalgic remembrances of the good old days and the comparatively simpler life that accompanied them.  One of our most cherished ideas that seems to have lost some of its luster is the power of big brands.  We're a long time from when Wall Street accorded high multiples to companies that owned these icons of commerce.  Indeed some of the once nifty dozen, brands like Coca-Cola, American Express and Marlboro no longer are the revered names they once were.  Coca-Cola has suffered from uneven management and changing lifestyles, American Express no longer has exclusive right to wallet cachet and Marlboro, along with other cigarette brands, has to hover in the shadows of embarrassment rather than in the spotlight of manly pride.

I won't suggest that brands or branding have become irrelevant, but it seems to me that a lot of consumers are simply moving on past their former fixation with reliable names.  Decades ago, brands faced what seemed like severe competition by retailer house and generic entries.  To be sure, some of their business was lost in that period, especially to the cost conscious and constrained.  But the truth is that the hey day of brands, the time when everyone was speaking and writing of their incredible value, came after the onslaught of value competition.  No, I think what troubles brands today is a combination of changed times and most especially of self-inflicted wounds.

Brands have been whipsawed by a series of social and health trends and by an increasingly well educated (in the practical sense) consumer.  Whether greater sensitivity to the consequences of high cholesterol, the growing awareness that obesity and even simple overweight is becoming a major health crisis or the more widely accepted risks of smoking, Americans have become readers of back panels and cautionary notices.  A pretty picture on the front simply won't cut it any more.  Moreover, many have discovered the true parity between most competitive products.  Perhaps people once bought into the idea that Bayer delivered something superior, but most know that aspirin is aspirin whatever brand name appears on the package.  Pepsi, because it was in second place, discovered long ago that cola (as most people's one and only) may have run its course, and has been rolling out the alternative beverages that consumers have grown to include in their daily life.  And specialty stores like the ever growing Whole Foods that opened a blockbuster destination flagship in New York earlier this year and Trader Joes that is expanding rapidly are offering an alternative to the traditional supermarket.  Brands, including their own, are present but no longer playing the starring role.  Finally the increase of channel options on TV, the threat of Tivo-like filter systems and the still unresolved challenge of the Internet as a medium has put somewhat of a lid, even if temporary, on the power of advertising.

But these are all externals.  Much of the problem comes from the marketers themselves.  What ails the branding giants can be ascribed to two intertwined phenomena, lack of true innovation and greed.  Together they have commoditized product offerings and diluted brand franchises.  When something is new only because it claims to be on the label, then at some point in time the Emperor's nakedness will reveal itself.  When a new kind of cleaning or of eating is just more of the same old, the promise becomes empty.  When a brand is deemed so powerful and profitable it is interminably leveraged and ultimately milked to death by line and franchise extensions, one begins to forget where it all began and why it mattered.  I can develop an attachment to a one and only, but not to a variety some of which don't ring my bell.  If Oreo is so many different things, what makes the original so special, not that a newborn will even know that one of them was its version of the real thing.

Perhaps even more damaging is the continuing and ever growing trend of me-too copycat marketing.  Today's fad is low carbs and it's a wonder we haven't been offered a low carb cleanser, air freshener or allergy medication.  There is a kind of shameless silliness to all of this that bespeaks a disturbing degree of branding bankruptcy.  Innovation and creativity seem to be headed for Chapter 11 and that's really sad.  Perhaps I am in the minority, but somehow an unending series of disappointments has made even me, a curious early adopter, lose interest.  Take for example the Gillette Mach3 razor which was introduced so effectively by BBDO close to a decade ago.  Mach3 was a demonstrable improvement in shaving; at least I found it so.  Next came Mach3-Turbo whose incremental benefits were so invisible that the only improvement I could discern was a higher price per blade, good for the company but certainly not for the consumer.  Finally, the most recent entry, Mach3-Power, a battery powered razor that supposedly reduces the number of passes and improves the shave.  Really?  Well I certainly see the benefits to Gillette of a twofer – replacement blades and Duracell batteries in one product, but my own experience with this new "system" was disappointing to say the least including that two of the even more expensive blades broke in half while I was shaving.  I probably won't even try Mach4 or whatever it is called when it inevitably hits the market.

I don't mean to either pick on Gillette (who incidentally never replied to my complaint email), nor to use personal anecdotal information as the proof of anything.  That would be unprofessional.  But I do think it's an example of a much larger problem spread across all categories and businesses.  If we don't start focusing on our own unique mousetraps and making them, not to mention their communications, distinctively different then say goodbye to brands.  Perhaps the end won't come in the next few years or even in my lifetime but, absent some change, I see it happening within this still young new century.

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