One of the more enjoyable business books I’ve read recently is Jonathan Salem Baskin’s Branding Only Works on Cattle: The New Way to Get Known (and drive your competitors crazy) ( New York: Business Plus, Hachette Book Group, 2008). Drawing on his decades of experience in marketing, Baskin takes an iconoclastic approach in exposing the folly of modern views on marketing and the illusion of branding.
Baskin challenges the mystical notions of branding in which consumers are supposed to develop deep emotional associations with products beyond the logic of utility. Commercials aimed at merely creating associations or “brand awareness†ultimately fail to drive sails. Like the troubling Burger King mascot with a crown, many of the images used to promote brands do nothing but waste our time and corporate dollars. “Most branding is a waste of money,†he insists (p. 14). “Branding is based on an outdated and invalid desire to manipulate and control consumers’ unconscious. It looks good and feels food to the people who produce it, but it has little to no effect on consumer behavior†( p. 14).
He argues that rise of branding occurred during a brief era in history after the rise of network TV and other centralized media, when consumer information really was tightly controlled through a few major channels. During that brief era, a few major channels of information dominated what we learned about products and left us at the mercy of advertisers. But now, as we return to the way things almost always have been, with many fragmented sources of information based upon people’s experiences with products (think the Internet, instant messaging, and the return of other less centralized ways of interacting), what matters most – once again – is not our metaphysical relationship with a brand at some subliminal level evoked by exposure to abstract and often meaningless ads, but the performance and value of the products.
“Consumers don’t interact with brands. They buy stuff, and purchase real things.†p. 15
And now most of us already live without branding. Branding is dead. Facts, experience, word of mouth, and value are what matter. Enter the rise of private label “brands.â€
Private brands (in store brands) have been with us for years, but it is only recently that they have really mounted a massive assault on established brands. Major manufacturers are learning that they must work harder than ever before to offer differentiable products that justify the premiums they want or need to charge. Some retailers have foreseen the power of private brands and have worked aggressively to form the partnerships and skills needed to bring private brands to a new level.
In the news now, we see Safeway offering some of its private brands to other retailers, a wonderful example of innovation in business models and of magnifying the profit potential of unique skills and value chains that have been developed.
We see Wal-Mart announcing bold new plans for expanding their already extensive private brands, a move which may have many old-school marketers of national brands trembling. We also see 7-Eleven announcing the role out of over 100 new in-store products that will compete with national brands.
There planets are shifting in the retail solar system, with bodies orbiting around a new gravitational center in the cosmos of consumer products: private labels. This is not to say that national brands are dead, but the pressures and threats are evolving, and they must evolve rapidly to avoid death nipping at their hills. We will see interesting new coalitions between national brand manufacturers and private label manufacturers, and perhaps an increasing emphasis on non-commodity aspects of consumer products such as improved packaging, novel dispensing, novel functional ingredients, and new business models for co-packaging, cross-promotions, and other ways to add value and meaning to threatened national brands.