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East versus West: brands and the cycle of sophistication

Brands and the cycle of sophistication

Although marketing practices are increasingly similar around the world, the way consumers respond to brands differs dramatically. Dominic Scott-Malden describes how consumers in the West view brands with a mixture of sophistication and cynicism, in contrast to the newly emerging middle classes in developing countries, who are wholeheartedly enthusiastic. How long will this last?

BRANDS are the footsoldiers of capitalism, carrying the philosophy and culture of ‘consumerism’ across the world.

In this article, I start with the hypothesis originally put forward by Guy Murphy, global strategy director of JWT1, that while we in the West are having doubts about many brands, in much of the world brands are riding a wave of enthusiasm. In the West, we have moved from a state of general enthusiasm about brands to being more ‘knowing’, more sophisticated and more critical of brands.

I will build on that hypothesis by suggesting that brands have an immediately accessible light side but also a (generally neglected) dark side, which becomes more apparent over time. As brands move from being more product focused to being more image focused, they have to communicate in a different way but they also become more vulnerable.

I believe digital communications will accelerate that process. Brands will have to get used to having every aspect of their product and image analysed, attacked and criticised, especially in the digital space. Many brands may be ‘found out’ and become ‘contaminated’. However, this is not an apocalyptic prophecy of doom for brands. Provided they have nothing sinister to hide, transparency will lead to a more sophisticated and ultimately healthier relationship between consumers and brands.

Brands guarantee consistent quality in an uncertain world

BRANDS' LIGHT AND DARK SIDES

Brands exist, at least partially, in the mind of the consumer, not the producer, so they are what we think they are. But I would pull out three things about brands – perhaps a mix of the obvious and less so.

I would argue that brands have always had both a light and a dark side to them. In meetings with brand owners, at conferences, in research and in advertising, we tend to focus on the light side of brands. Sixty per cent of consumer brand conversations in the UK are positive, according to word-of-mouth specialist Keller Fay Group, and more than one third of those conversations are recommendations to try or buy.

On the light side, brands guarantee consistent quality in an uncertain world. You can trust them to perform. That may seem a pretty basic observation but back in the 1960s in the US, in the 1980s in the UK or right now in the BRICs – Brazil, Russia, India and China – that is the fundamental guarantee that drives the growth of brands.

Perhaps less obviously, brands have an artistic quality. Andy Warhol and the pop art movement recognised it most famously in the US in the 1960s. Brands can be beautiful objects of desire that are at home in an art gallery, a design museum, a supermarket or on display in a backlit bar. From Apple to Smirnoff, one of the reasons many brands appeal so strongly to the subconscious as well as the rational mind is that they look and feel good. Even in functional categories such as medicine, buyers of painkillers talk of the ‘shiny, glossy packaging’ and ‘sweetlike’ qualities of brands such as Nurofen. When people talk of brands being ‘iconic’, they are expressing an essentially artistic admiration for brands and subconsciously comparing them with religious icons.

Brands are political. In the right context, they can represent Western values of freedom, democracy and choice, and ultimately they add up to a lifestyle. When I was researching US brands in Moscow and St Petersburg in 1993, they represented the freedom and choice that people had been denied for so long. Western brands carry Western values with them.

Some companies/brands are taking corporate and social responsibility to new levels: Unilever’s Sustainable Living Plan and Nike’s Better World, for example. Both aim to do more good and less harm in the world, particularly when it comes to sustainability.

But there has always been a dark side to brands. Luxury brands personify the obscene juxtapositions of rich and poor across the world; so there are people spending the equivalent of £2,000 on a Louis Vuitton handbag in India while outside in the street children are begging. Brands throw the contrast between rich and poor into high relief in a way that can ultimately contribute to revolution. Conspicuous consumption in a poor country can have a profound effect – as a contributor to the Arab Spring, for example.

On a more everyday level, they represent the forces of consumerism and materialism, which people in the West have always questioned but are now questioning more than ever. Books like Affluenza by Oliver James are just the tip of an iceberg of antimaterialism in the UK. People are questioning whether they should devote their whole lives to the task of earning money to buy and own brands in a Faustian bargain – selling their souls for an idea of happiness that owning the right brands may fail to deliver.

ENTHUSIASM FOR BRANDS VARIES ACROSS THE WORLD

There appears to be a cycle of sophistication that individuals, societies and, ultimately, the world will go through in response to brands.

The thesis put forward by Guy Murphy (Figure 1) demonstrates a dramatic variation in enthusiasm for brands across the world. The Netherlands, UK and US, for example, tend to be at the less enthusiastic end of the spectrum, while the BRIC nations tend to be towards the more enthusiastic end. This analysis was undertaken several years ago but the pattern is widely endorsed by our recent research in those countries2.

I suggest this is a cycle of growing sophistication (Figure 2). Stage 1 is the Discovery phase, when brands are essentially new and exciting, and more and more people within the community are starting to buy them.

This is the phase that the emerging middle classes, with their ‘eager consumers’, are going through in countries such as the BRICs, in spite of the world recession.

To the BRIC list originally devised by Goldman Sachs, commentators increasingly add South Africa, which is seen as the gateway to Africa as a whole, where the same combination of natural resources, entrepreneurs and eager consumers means it is widely viewed as the next region for economic growth, albeit from a low base.

GOLDEN AGE FOR BRIC BRANDS

We therefore are seeing a golden age for brands in the BRIC nations today, and we may do so in Africa within the next 20 years. These regions all have a growing lower middle class, moving to the cities, earning wages, with (some) money to spend, and they are able to afford brands for the first time. People further up the class pyramid are growing in affluence, buying brands regularly, and the wealthy at the top of the pyramid are buying luxury brands to demonstrate their status.

Among the BRICs and other emerging nations, there is massive enthusiasm for consumerism and brands of all kinds. There is open adulation of brands and very little criticism of any kind. In a sense, brands can do no wrong. It’s a parent/ child relationship: the brand ‘positions’ itself the way it wants to be seen and broadcasts to its audience. People believe brand stories, brand motives are trusted, and the fundamental guarantee of consistent quality can be proven.

Characteristic of some of these countries is a massive market in fakes. On the one hand, this could be a problem because if the fakes are good, they could undermine the brand. But poor quality fakes reinforce the brand’s superiority and prove that people want those labels, even if they cannot afford them.

But this golden age for brands in those markets may not last long.

THE SOPHISTICATED BRAND ENVIRONMENT

In a more sophisticated brand environment, people know how it’s done. TV programmes such as The Apprentice and Dragons’ Den show executives creating brands and inventing brand stories. People have come to realise that brand images are as carefully manufactured as the product.

People don’t really believe brand stories. For example, beer lovers know that in common with some other ‘foreign’ beers, San Miguel is brewed in Hereford, not Spain. It says so, on the bottle: ‘Brewed under licence in the UK.’ If you at review sites such as Caio on Bing, San Miguel is described as a ‘forgery’ by one reviewer for this reason.

People become suspicious that branding is about charging more for ‘the image’. The relationship between brand and price is not clear. People bring up their children not to believe what ads say, and to be wary of commercial motives – ‘they just want your money’.

Increasingly, individuals use brands to differentiate themselves and show discernment. Authenticity is prized and people are looking for smaller brands with more personalised credentials.

The result is polarisation and fragmentation, with individuals thinking other things are far more important than brands – still loving and revering some brands (such as Manchester United, or Apple) but sceptical about others. It’s an environment where brands need to work harder and think differently, and where brands, if they try to lie, will increasingly be found out. It’s an environment where brands may need to get used to cynicism.

THE CYCLE OF DISILLUSION

Stage 1, the ‘discovery’ phase, will eventually give way to stage 2, the ‘knowing’ phase, as it has done in the West. There is no predicting when this will happen, but it will happen one day, and probably much faster in the emergent world than it has in the West, because cycles tend to accelerate with greater availability of information. As the novelty of brands wears off and brands become more commonplace, naïve enthusiasm for them will start to wane.

Typically, and crucially, brands start to lose their first raison d’être: to guarantee consistent quality versus the local competition. When all products generally deliver to a reasonable standard, differences between them grow smaller, and brands get taken for granted. The added value comes increasingly from the image, rather than the product: brands promise image, status and fulfilment of roles (‘be a good mum’), rather than performance.

The brand’s story and personality become more important than its function, and the marketing battle is to try to embed the brand’s story into the mindspace of the population – to make it the automatic choice within its category.

DIGITAL WILL ACCELERATE THE CYCLE - EAST AS WELL AS WEST

According to Rory CellanJones, the BBC’s technology correspondent, the most important story of 2012 will be the spread of internet access to the next billion global users. One main characteristic of the BRIC countries is the younger generation’s love of ‘online’.

As we know, people shop differently online. They find it easier to research and compare different brands. Above all, they are strongly influenced by user reviews. Now they can quickly find out about a brand, what the media says about it and what other customers say about it. There was always wordofmouth but now, good or bad, wordofmouth is on speed. Google and/or Amazon has become an instant first response to any decisionmaking process.

Brands can be put on trial online, in the court of public opinion. In advertising you can say what you want; in the media it’s up to the journalist; but online it’s beyond any control. In January 2012, the iPad was under attack for being made in China, using lowcost, virtually ‘slave’ labour: a classic example, if true, of the ‘dark side’ of brands becoming available for all to see.

BRANDS WILL HAVE TO GET MORE INTERESTING

Brand leaders will need to realise their potential: to lead their categories using big ideas that are entertaining, interactive, tweetable and long lasting.

Of the 10 toprated digital campaigns of 2011, according to Campaign magazine, some were TV ads that were then accessed with lots of hits on YouTube, while others had looked at what was popular on YouTube (such as dancing weddings, Angry Birds and ‘stunts’) and used that medium for their brand.

What they all had in common was that they were highly entertaining and engaging – sufficiently so to be passed on by people who chose to watch them.

On the one hand, brands will have to learn to be defensive – to face their ‘dark side’ before they get found out and to make sure there are no skeletons in their cupboards.

On the other hand, they will need to learn to be welcoming, interesting and entertaining guests online.

In a more sophisticated world, consumers will have a far greater sense of who brands really are and this transparency will lead to a more realistic and ultimately healthier relationship between consumers and brands.

Ironically, by subjecting brands to the fire of consumer interrogation, the digital world may actually rescue them from the cycle of cynicism to which they might otherwise eventually succumb.

This article featured in Market Leader, July 2012.

Dominic Scott-Malden is research director at Jigsaw Research

[email protected]

REFERENCES

1. Guy Murphy: Emerging Brand Wisdom, Admap, February 2010.

2. Dominic Scott-Malden: The Global Consumer: Is sophistication growing around the world? MRS conference paper, March 2012.

Author’s note: thanks to Julian Boulding, president of Thenetworkone, for his help with researching this article.


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