A research firm has just bestowed the title “world’s most
valuable insurance brand” on a mainland Chinese company. Other outfits issue
similar announcements in diverse industries, despite that in 2014 The Economist made this remark about
brands: “Their importance may be fading… no one agrees on how much they are
worth or why.”

The decline of brands: We should have seen it coming, when mass
customization first began to overshadow mass production. Scholars point to info
tech to explain the growing irrelevance of brands; online customer reviews and social
media now substitute for the “shorthand” information packages that brands once
provided.

IT is not the only force that undermines branding; the other
force is confused management. But, like the movie villain who has a last-minute
change of heart, IT will be the one that ultimately saves the brand.

Scholars in the 1980s declared that branding is the most
powerful idea in marketing. Companies devoted the ‘90s and ‘00s to measuring
their “brand equity.”

In Germanic languages the word brand archaically meant
“burning.” The brand or symbol burnt into a calf’s haunch indicated ownership,
identifying the calf as belonging to a ranch that was known by the same symbol.
As the word began to be used in the consumer product context, it lost the
“burning” connotation, at first meaning only the manufacturer’s symbol or logo.

From there, the meaning expanded. Brand became a sign that
customers could take confidence in the uniformity and consistent quality of the
manufacturer’s offerings. Later, it grew to mean an identity or image seen as a
corporate asset; the value of the asset was called brand equity. Today’s
managers use brand to mean a unified company-wide view of quality and customer
service that defines the company culture and differentiates it from others.

Unfortunately, “brand” has ceased to carry these positive connotations.
Uniformity, differentiation, and ownership of offerings are things of the past.

Name-brand stores issue discount coupons. The coupons say,
in small print, “Good at participating locations only.” Carry the coupon to a
store location, and you are told, “Sorry, we are not a participating location.”

Needing help with a bank account in foreign country X, you
are relieved to find the name-brand bank has a branch in your home country. You
phone, and are told, “We share the name, but we are a different corporate
entity. You must call country X.”

Code-sharing means airlines are no longer airlines; they are
simply travel agencies. You book a flight on airline A, only to find that the
flight is “serviced by” airline B.

Department stores used to be powerfully branded. Now they
are just mini-malls, leasing space to other entities. There is no Macy’s shirt department.
To choose a shirt you must travel from the Levi’s sublease to the Tommy Bahama
sublease, to… And thus no difference between Macy’s and Mitsukoshi’s.

Franchising and its growth further erode branding.
Franchisors enforce less than total uniformity among franchisees who sport the
same logo. Ask a question, and a franchisee may reply, “Take that up with corporate,
we are just a franchise.”

Outsourcing of manufacturing means a garment bearing the
brand of your favorite athletic shoe company was not in fact made by that company. The actual
manufacturer may not uphold the stated values of the name-brand firm.

A global branded fast-food chain deletes beef products from
its menus in Hindu neighborhoods. The company then backtracks on its brand
definition, saying the brand means fast, inexpensive service, rather than a
consistent menu.

A hotel chain has announced it will use big data to
personalize your experience. Your room’s configuration, instead of being comfortably
predictable, will be an algorithm’s (probably faulty) idea of what you want. As
soon as all major hotel chains do this, you will get something like what you want at any chain! So much for brand
differentiation.

“Place branding” is a standard tool of touristic and
economic development. Ironically, it defeats itself if it succeeds. New
buildings invade traditional neighborhoods. Tourists find small match between
their guidebooks and the reality. Hong Kong’s appearance transformed totally
between 1976 and 1994, the changes including disappearance of the Aberdeen boat
community, the Kowloon YMCA, and other landmarks.

All these experiences erode the meaning of brand. The
“burning” question is: What will replace brand as a focus for customer
confidence?

In a globally hypercompetitive economy, there is constant downward
pressure on the salaries of front-line personnel, and on the budgets for
training them. It was IT (cell phone videos) that broadcast the recent misdeeds
of the three major USA airlines – including the physical dragging of a peaceful
passenger from a United flight – damaging their brands nearly to the point of
no repair. Yet it was poor management policies that led to the misdeeds in the
first place.

Quality of personal service will continue to be a
differentiator only for premium-priced luxury brands. Confirmed passengers in
the first-class cabin are never bumped from a flight! For the rest of us,
quality will depend on our interface with the vendor’s A.I.s (artificial
intelligence algorithms).

Savvy vendors will let you talk back to the A.I., to fine
tune your interaction with it, and its idea of your preferred flavors, sizes,
and services. The new brand differentiators will be the “personalities” of each
vendor’s A.I.

Sources:

Yiu, E. China’s
Ping An rated top insurance brand. South
China Morning Post, May 2, 2017, page B1.

Tenet Partners,
Top 100 Most Powerful Brands of 2016. https://tenetpartners.com/top100/most-powerful-brands-list.html
, accessed 5/6/17.

The Economist, What are brands for?
August 30, 2014. http://www.economist.com/news/business/21614150-brands-are-most-valuable-assets-many-companies-possess-no-one-agrees-how-much-they,
accessed 5/6/17.

Singh, H. Big
data hotels make you feel more at home. South
China Morning Post, May 2, 2017, page C2.

Metric
Marketing. The Importance of Branding in Your Marketing. http://benchmark.metricmarketing.ca/marketing-resources/why-is-branding-important-to-marketing/,
accessed 5/6/17.