the crisis of branding and the theory needed to solve it · the crisis of branding and the theory...

© 2002 IBM Corporation

IBM Global Services

The Crisis of Branding and the Theory Needed to Solve It

Paul K. MagillSeptember 2003

Crisis of Branding – Paul Magill

© 2003 IBM Corporation2

A key focus for Services Research and Marketing should be evolving management practice for the on demand era

Required Approaches

“Social”Approaches“Social”Approaches

“Engineering”Approaches“Engineering”Approaches

Elements to be managed in on demand enterprise

Brand Capital / market influence

Human Capital / organizational behavior

Working Capital / operating expense

Physical Capital / capital investment

Management Practice Today

Management Practice Today

Opportunity for IBM differentiation by “mainstreaming”emerging management practice



A Point of View

Management practice today is rooted in an “Engineering” paradigm while the main drivers of profitability increasingly require “Social” approaches

Brand Capital, Intellectual Capital, Human Capital are increasing in importance while the techniques to manage them remain underdeveloped

Managing Brand is a special case of a general need to manage player behavior in ecosystems

Look at Branding practices over time as a guide to the type of theory required for managing player behavior in ecosystems in the future



Eras of Branding



1900 – 1920: Era of ClaimsBranding was used to…

Establish names and labels

Provide instruction on product use

Convey the strength, stability & prestige of manufacturer

And…Make outrageous “snake oil” claims



1920 – 1960: Era of AssociationsBranding exploited emotional and psychological associations

Drive associations of product with high status and the aspirationallifestyleUse behavioral psychology to pull consumers to brandsLeverage rising income, suburbanization and televisionInstruct Americans on how to live, what to value

Branding practices had become public knowledgeJournalists, authors, filmmakers and academics described the manipulative aspects of brandingConsumers started to actively resist cultural engineering by marketers

But by the 1950s and 60s…



1960 – 1999: Era of AuthenticityMarketers struggle to find a new branding paradigm…

Cultural revolution of the 60s

Marketing – engineered prescriptions become less compelling

Resistance to cultural engineering of marketers becomes the means through which consumers express themselves

Marketers who can engage the new consumer sentiment win big

Brands become cultural resources for consumers to express their own identity

Value of “authenticity” skyrockets

But… the market remains the primary arena for expression



Branding Practice c.1999

Adopt the opposite of the authoritative voice of the 1920s-60s –poke fun at traditional advertising, use ironic voice, distance brands from overt persuasion

Connect brands to aspirational and authentic communities

Establish real-world authenticity and / or historical authenticity

Create brand allegiance among the influential elite – guerrilla and viral marketing

Cool hunting



The Developing Branding Crisis:Tensions in the current branding paradigm

Authentic becomes cliche and scarce

Influential elite lose influence as they sell out

Brand puppetmasters revealed

Intermediaries manage clutter but create new cultural authorities

Ad agencies and branding firms cloak the true corporation

Denial that the brand is motivated by a search for profits losescredibility

Conflict emerges between the brand value proposition to the consumer and the corporation’s treatment of non-consumers



Today: A Crisis of Branding

No Logo

Second Superpower

Most valuable brands are becoming most the hated brands

No actionable theory for addressing the crisis or profiting from its resolution



Marketing Theory Today

QuantitativeSales-Support Marketing

QuantitativeSales-Support Marketing

“The quant jocks will move from Wall Street to Madison Avenue”

- Hal Varian

“The quant jocks will move from Wall Street to Madison Avenue”

- Hal Varian

Holistic BrandingHolistic Branding

Brand intent, strategy

All customer touchpointscoordinated

External / internal alignment

CEO as brand steward

Semiotics and critical social theory are niches at best



Marketing / Branding Theory Required

Quantitative sales-support Marketing

Holistic Branding

Detection and diagnosis of emergent consumer cynicism

Projection of potential equilibrium arrangements between branding paradigm and consumer culture

Framework for innovation and creative experimentation

Strategies for intervening in networked markets

What we needWhat we have



Definition of an Advancement in Branding Practice

An advancement is a transition to a new equilibrium between the branding paradigm and consumer culture. It is fostered by crisis and resolved through innovation. It results in market rejuvenation.



2000 – 2020: The Era of Subservience?

Corporations will need to cede more of their cultural power to consumers

Consumers will express themselves not only through selective embrace of brands but also through changing the corporations behind the brands

Brands which exhibit corporate responsiveness and flexibility will gain a dynamic resilience

A new equilibrium will emerge in which responsive brands co-exist profitably with citizen-activist consumers – who still buy

Eventually the limits of corporate responsiveness will become clear and a new crisis will develop



The Social Theory of Branding

Firm behavior in pursuit of profitsFirm behavior in pursuit of profits

Crisis

Mediated through the market

Crisis Crisis

Individual behavior in pursuit of sovereigntyIndividual behavior in pursuit of sovereignty



Implications

We need to recognize that the on demand business not only exhibits increasing automation and information-intensity in its business processes, it also proliferates its relationships and networks

Firms in the on demand era are seeking to engage the beliefs and behaviors of others – consumers, employees, ecosystem participants. Traditional management practice provides very little guidance on how to do this

We need ways to sense emerging crises, project future equilibrium states, innovate and experiment with new influence approaches, and intervene to stabilize or disrupt emerging patterns

We should be drawing from social theory to pursue management tools and techniques for helping firms make informed choices about their behavior in multi-player networks

the crisis of branding and the theory needed to solve it · the crisis of branding and the theory...

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