Digital technology will still not deliver an “uber-rational” consumer

There’s a fascinating article in The Economist magazine this week. ‘What Are Brands For?’ presents an intriguing summary of the apparent flaws in the general obsession with brands now exhibited by much of the commercial world.

Mark Ritson

It’s fascinating because it highlights the two most contentious and cogent current critiques of the branding discipline.

It’s worth noting, before we look at each, just how immature the discipline of brand management actually is. Ignoring the fact that brands have existed for thousands of years in one form or another – the actual business of theorising how they work is a relatively recent pursuit. Thirty years ago the world of management had plenty of theories about consumers and advertising but almost nothing to explain brands.

And you get the sense that certain parties, economists in particular, preferred it that way. Once upon a time economics was the Archimedean peak for most business theory while marketing was a crude and unworthy distraction that occupied itself with jingles and promotions. Imagine the creeping horror felt by many economists over the past 50 years, then, as marketing became increasingly established, with branding as one of its central areas of specialty. How could this have come to pass?

That’s the tenor of the first critique of branding represented by the likes of Itamar Simonson and Emanuel Rosen, authors of the recent book, Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information. The authors point to the sheer amount and accessibility of external information available in the digital age and hypothesise that this will diminish the role and importance of brands. It’s an argument that’s been banging around since the internet emerged and posits that when a consumer can search and compare unlimited purchase options side by side, the influence of brands on decision making will dramatically diminish.

It’s an extraordinarily economic argument. Remember that economics was built on a theory of ‘economic man’ (the implied sexism is an indicator of the age of the concept) – a consumer who processed information in a rational manner to make informed, selfish choices. Partial information, limited access and emotion were all alien to the economic model and so they were ignored in favour of the more rational approach. Of course, as the 20th century progressed and consumers became increasing irrational, emotional and fleeting in their decision making, the potential for economics to explain quotidian buying behaviour was eclipsed by the upstart discipline of marketing and its apparent ability to handle slippery concepts like brand image and desire.

Despite the apparent certainty with which many scholars now predict the demise of branding in favour of the omni-digital, uber-rational decision maker, I would not hold your breath. The digital age will not make economics any more relevant to understanding consumers than the TV age that preceded it.

The other salvo from The Economist article comes from Professor Byron Sharp and his staunchly held view that both differentiation and loyalty have been wildly overstated in their impact on most consumer decisions. Brands, he argues, succeed on the far more prosaic basis of being both more mentally and physically available to consumers. To his credit, Sharp makes many persuasive points, not least in his discomfort with experimental psychology and its stranglehold over most top university marketing departments.

But the central problem with Sharp’s critique is he positions brand equity as predominately about brand associations and differentiation. It’s certainly a big part of the approach and up for debate, but any decent model of brand equity has always been split between the brand awareness that is achieved and then the associations that are subsequently garnered. In classic low-involvement categories like confectionery, where Sharp does much of his work, no one would argue against a model of brand equity that was anything but awareness-heavy and associations-light. Making the same critique of targeting and differentiation in, for example, luxury leather goods might prove more of a stretch.

But that’s really not the point. What’s invigorating about The Economist article (apart from its brevity) is that branding is being critiqued. And that can only be a good thing.

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