Sign of the times
Bird's-eye view how it started and how it is going in brand land. Branding is constantly in flux. New technology and a call for system change drive what it’s about. What’s next?
It’s one of those topics in business that seems constantly in motion. Branding today is different from the past, and it will be different in the near future. As branding is a social science, it constantly adapts to the dominant economic system, technological possibilities, and world-changing events. While the Western world seems to be shifting from shareholder to stakeholder capitalism, branding shifts accordingly. In this article, you’ll find a quick overview of the different stages brands have gone through in the last 120 years. Also, it ends with a little promise of where it could be going.
Agreeing what a brand is…
There are many definitions floating around, but the one we tend to choose is: ‘a brand is a network of associations in the brain’. These associations are triggered by visual or verbal cues, such as a brand name, a logo, or even a specific product. A brand cue can trigger many associations, stronger ones, weaker ones, functional and emotional ones. It can trigger memories, experiences, features & benefits, feelings, aspirations, and much more. Some of those are stronger in the brain, others weaker. While we are not consciously aware, these associative networks strongly influence what we think and what we do.
Brands silently influence our behaviour.
It’s not easy to build a strong brand. First, it takes a lot of time. The strongest brands have been around for many years, and you cannot expect a ‘new’ brand to be strongly represented by lasting associations in the brain. These associations have to be reconfirmed over and over again to build a strong, lasting mental position. Second, choosing the mix of associations isn’t easy, either. They must be attractive, relevant, true, and sticky. The strongest brands have rich and deep networks of associations, weaker brands narrow and shallow associations. Third, it makes only sense if many people believe they all have the same network of associations. One has to think other people have the same ideas, feelings, and opinions about a certain brand. Once many people assume they have the same associations, a brand becomes a social connector and as such a powerful instrument to steer collective behaviour.
Brand positioning is about defining, steering and activating a network of associations. It’s about designing the composition of associations in our neural system. You got to build it up step by step. Reconfirming and strengthening the existing associations, and gradually adding new ones to make the brand stronger, more powerful.
Let’s look at the development of brands over time and how they evolved in the function of societal developments.
In the beginning of the 19th century, with the rise of industrialization and mass production in the capitalist world, brands were needed to identify a product from a certain manufacturer. Coca-Cola is a nice example. In those days, it wasn’t about ‘happiness’, but about a syrup with a delicious, refreshing taste and made in Atlanta, USA.
Identification is the basic function of a brand, and it’s very handy, otherwise, you wouldn’t know what you were buying. This identification function of a brand often goes hand-in-hand with claiming the benefits of a product.
From identification to aspiration and compensation
With growth of business due to globalisation and the free market economy in the 80-ties, branding evolved from a simple means of identification to more complex psychological aspiration and compensation. Amplified by the possibilities of mass media (radio & television), brands increasingly triggered associations related to lifestyle and social roles. For example, Unilever’s Blueband brand in the 80-ties started showing mum’s promoting the idea that feeding Blueband to their families made them good mothers.
By then, brands triggered associations related to both product features & benefits and psychographic characteristics of consumers. Blueband: margerine, on bread, tastes like butter, I’m a good mum, love for my children, etc.
It is in these times that, in the developed Western world, consumerism took flight. Shopping became a pastime and people started accumulating more and more goods. Not only manifest needs were satisfied, but also many latent needs were activated by a constant stream of product innovations marketed by mass brand communications. This is also the time people started overfeeding with industrially produced sugar-loaded foods. Obesity is nowadays a leading cause of death, including diabetes, heart disease, stroke, and certain types of cancer.
By the turn of the century, digital branding became in vogue.
With the introduction of social media and internet-based digital communications, a rapid transformation of the branding practice happened. Suddenly all sorts of new branding professions emerged, such as search engine optimization specialists, content marketers, interactive communication experts, branded content and paid influencers. Driven by the digital possibilities of the mobile phone and websites, the branding arena changed rapidly. Accelerated by the proliferation of media, and the addiction of consumers to their new devices, new business models emerged. Branding now definitely lost its innocence and truly became the turbocharger of shareholder capitalism.
By 2020 branding has evolved into purpose marketing, woke and activism.
From features & benefits, aspiration & compensation and the addiction to social connection, brands in the Western world are nowadays increasingly touching on political topics such as gender, diversity, and many topics related to sustainability. The unbridled linear growth of our economies and fossil energy-based manufacturing has led to global warming and climate crisis. Further, fair access to prosperity is becoming impossible as the gap between rich and poor, between capital and labour, keeps widening. Many brands now take a stance and are no longer neutral on political topics. Also, a new generation of politicians, employees and consumers demand change. Are we at the brink of a new era in our economic system? Many great thinkers, philosophers and even the ordinary man start to believe shareholder capitalism is coming to an end, and we are at the forefront of something new. A leap from shareholder capitalism to ‘stakeholder’ capitalism is foreseen by many.
The social responsibility of business is to increase profits.
Nobel Prize winner Milton Friedman's doctrine, introduced in the ’80s of the previous century, was, "The social responsibility of business is to increase its profits. Friedman's doctrine centres on the belief in the division of labour and capital. In such a society, the sole role of companies is to act as profit machines for investors. Other interests are the responsibility of others. Employees must represent their own interests through unions via contract negotiations with the corporations. And the government must make laws to secure the public interest. Voilà, the simple recipe of neo-liberalism!
The call today for stakeholder capitalism stems from the breakdown of this orderly division of labour and capital. By 2020 the power of unions has diminished, governments compete with each other for favourable conditions, such as tax breaks for establishment, and meanwhile, the interest of our biotope is completely falling short. That is why companies themselves now start taking the interests of all stakeholders seriously: employees, customers, local communities, and yes, even future generations.
This also means that brands start taking political positions about all sorts of controversial issues. Are the working conditions of Uyghurs acceptable? Is a legally correct donation to a political party morally acceptable? Should an ice brand stop sales on the West bank of Palestina? Is your chocolate made by slaves? Brands are transforming into public advocates, with politically coloured views on anything and everything. But then with a bag of money to turn those views into a preference for their business, so they can earn even more money. Is that what we want?
Do we want ‘purpose’ brands to interfere with democracy and politics?
Neoliberalists believe not. Their argument is all this is undemocratic. In a decent democracy, elected representatives of the people make politically sensitive decisions, not the big brands. The stakeholder capitalist model empowers the bosses of large brands to influence politics. And that is simply not their role, they are the hired guns to enrich the shareholders.
To counter this, a good case can be made that we all should do what we can to deliver on the 17 Sustainable Development Goals as defined by the United Nations. Every individual household, every business and every nation must take action. All nations in the world have signed off on these 17 SDG, so what’s wrong with corporate brands pursuing such more noble motives next to profit?
What’s next? Will our system evolve from stakeholder capitalism to something new?
While many believe that the capitalist economic system is the best ever, we must recognize there are many flaws. The United Nations have made plans to achieve health and happiness for all people on earth by 2030. Capitalism as we know it has not sufficiently delivered on this and, even worse, the rich get richer and the poor get poorer. And on top of that, heavy industry and consumerism have polluted our living environment now to a crisis level.
Could it be that this ‘stakeholder’ capitalist model will be short-lived and that we must see it as an intermediate phase, while we transfer from capitalism into a new economic order? Increasingly we see signals this might happen. On the horizon, we see the emerging circular economy, where nothing is wasted. Regenerative farming in combination with free and clean fossil-free energy will take the CO2 out of the atmosphere. We see the rise of co-operating eco-systems, with much more focus on cooperation than competition. We read about advocates of free basic income, hierarchy free self-steering organisations, and animal-friendly diets. Cities are becoming car-free and green again.