It’s the real thing
“Authenticity” is being peddled as a cure for drooping brands
BUSINESSES have always told stories about their products. But in recent
years they have become particularly verbose, bombarding consumers with
any small detail that might enhance the brand.
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Brands began as badges of product quality, going back at least as far as
the medieval guilds of craftsmen who used them to distinguish their
work. In the modern age they have sought to convey emotional and social
values, too: think of Nike’s “Just do it”, or Kodak’s “Share moments.
Share life”. Now, in inundating consumers with a cascade of fascinating
facts, companies are striving to bestow “authenticity” on their brands.
Interbrand, a consultant on branding, describes authenticity as “an
internal truth and capability”, a “defined heritage” and a
“well-grounded value set”. This slippery quality, the pundits tell
firms, is what the public is yearning for, in an age of doubt and
mistrust.
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For a range of consumer goods, brands’ strength as a signal of quality,
and their power to open people’s wallets, are fading, argue Itamar
Simonson and Emanuel Rosen in their book, “Absolute Value: What Really
Influences Customers in the Age of (Nearly) Perfect Information”.
Of the top 100 consumer packaged-goods brands in America, 90 lost market
share in the year to July, according to Catalina, a marketing firm. In
China and other big emerging markets, foreign-branded goods are losing
their allure, as shoppers realise that local products are no longer so
inferior.
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The consulting firms that value and rank brands, such as Interbrand and
Millward Brown, report that their top 100 names are still increasing in
value. However, such firms have different and quite subjective
methodologies, and often disagree on what any given brand is worth.
Christof Binder of Trademark Comparables, an adviser on brand values,
and Dominique Hanssens of the University of California, Los Angeles,
sought a more concrete measure: when brands are sold as part of
corporate takeovers, what price do investors put on them? They found
that these prices, as a percentage of deals’ total value, have dropped
since 2003. So, at least for those firms being taken over, the strength
of their brands is becoming a smaller share of their overall worth.
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