Are Brands Losing Their Power to Attract?

Some have suggested that consumers today are more apathetic toward brands than in the past, and there is at least scattered evidence to support the notion. Brand loyalty in the financial industry, for example, as reported by the Carlson Marketing Company, decreased by 25 percent between 2000 and 2001. This is a particularly strong trend with the important under-thirty-five age group. ^[24] The reputable PIMS research organization reports that in the year 2000, four out of ten consumers in the UK described themselves as having a genuine preference for branded merchandise. By 2001, that number had slipped to three in ten. ^[25]

Fortune magazine also reports an earthquake occurring in consumer product brands that is shaking the marketer's world: "Retailers—once the lowly peddlers of brands that were made and marketed by big, important manufacturers—are now behaving like full-fledged marketers." ^[26] And the private-label brands are winning market share. It should be pointed out, however, that in these situations, one brand category is winning over another. This is brand warfare, not that brands themselves are losing.

One reason that perhaps explains brand slippage is that branding used to differentiate quality. Today's product quality, however, has dramatically improved everywhere. Even fakes churned out in Asia are largely indistinguishable in quality from the famous European brands they copy. As Brian Kardon, with Cahners Business Information, says, "Quality itself is a commodity in the consumers' eyes—it's easy to get. It's the price of entry." ^[27] As a result, unless brands are distinguished on something other than product quality, many of today's consumers are not likely to remain loyal to their brands.

^[24]The driver for this trend may be a loss of confidence compounded by early 2000S losses in the stock market rather than a loss of brand power. 2001 Brand Loyalty Survey, Carlson Marketing Company.

^[25]PIMS research as cited by Peter Burgess, "Customer Value Measurement for Competitive Advantage," Admap, no. 428 (May 2002).

^[26]Matthew Boyle, "Power Shift," Fortune, July 21, 2003.

^[27]Brian E. Kardon, "The New Rules of Branding," The Advertiser (October 1998).