Excerpted from BrandChannel “Best Global Brands: Lessons Learned” by Jim Thompson, September 17, 2008
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Despite this past week, the year 2008, in general, has been an excellent one for developing nations. China, Brazil, Russia, India and other historically troubled economies continue to enjoy burgeoning middle and upper classes that are spending money on purchases they could not afford in the past.
In contrast, this has not been a good year for developed nations. The United States, and now every country tied to America’s radioactive financial service industry, is suffering because deluded borrowers and irresponsible lenders were circulating money they never actually had.
So, what can Interbrand’s 2008 Best Global Brands report teach us about the world’s top 100 brands in this bipolar global economy? Plenty.
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Lesson #1: Brand Engagement is Crucial
Here is how Merrill Lynch positions its brand online:
Merrill Lynch demonstrates its commitments to clients and shareholders through the firm’s emphasis on excellence, integrity and ethical behavior…
Though individual citizens share much of the responsibility, financial services touting a devotion to fiscal responsibility and economic viability failed to maintain brand engagement among their ranks, and the result has been a devastating collapse of trust and shivers of recession that are reverberating across the globe.
Investing in the proper training of employees so they embrace and live corporate brand attributes is a key component of branding, so it is not surprising that myopic financial service brands such as AIG, UBS, and Morgan Stanley have all dropped in Interbrand’s 2008 Best Global Brands rankings…
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Lesson #2: Luxury Brands Adjust to the Tides of the Global Economy
…Luxury brands benefit from a consumer-driven psychological buoyancy that allows them to paddle the currents that stir the global economy…
People like nice things. Unfortunately, most of us can’t afford the highest in quality, the finest in elegance, and the sleekest in design. The vast majority of the human race cannot afford a Rolex watch. However, as many economies around the world thrived during the past year, increasing numbers of people came within financial reach of luxury brands…as these demographics become accustomed to nice things, something compelling happens.
Ricca explains, “In a mature economy, a consumer’s self-confidence derives from being discerning rather than merely rich. Subtle details, which add depth to the product experience, are not within reach of the wealthy, but the wealthy cognoscenti.” Indeed, being able to afford Iranian caviar, and being able to deconstruct Iranian caviar, represent two different levels of experience with the luxury-brand lifestyle.
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Lesson #3: Know Thyself and Build Trust in Others
Branding communicates a set of values and promises to customers. When a brand delivers on those promises, trust is created, and a relationship based on shared experience and loyalty ensues. That bond is vital to brands, particularly when the economic climate sours and consumers shift their spending habits.
As the 2008 Best Global Brands Executive Summary states, “The uncertainty of a downturn drives consumers to want more for their money and demand a more emotionally rewarding experience for their hard-earned and limited cash.” In such times loyalty often competes with necessity. “It’s no longer a choice between Nike or adidas shoes. The question becomes, ‘Do I buy shoes or an iPod?'”…
Brands that have and continue to consistently build trust with consumers are better off in tough times than brands that seek to capitalize on the latest trend or exploit the sincerity of the moment…
Brands who aren’t true to who they say they are can be more susceptible to outside forces and peer pressure from changing markets and emerging trends. There is a difference between being thoughtful, engaged, and flexible, and simply being something you are not. Like trustworthy.
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Lesson #4: Brands are Defining Borders in the Global Economy
…With the incredible expansion of international commerce and advances in transportation over the past 100 years, immigrants—both legal and illegal—have become the blood coursing through today’s economic circulatory system. The phrase “Made in _____” should be expanded to say “Made in _____, by _____.” For example, “Made in the U.S.A., by Mexicans.” …Or even “Made in France, by some Algerians, four Russians, a Brazilian, and nine Saudi Arabians.”
Dr. Häusler explains that when consumers around the globe think of fine “Italian” menswear, they aren’t thinking of Italy, the actual country, at all; they are, in fact, collectively thinking of Italian brands such as Armani, Brioni, and Ermenegildo Zegna…Though particular nations may benefit from the halo effect of these brands, which is certainly warranted, credit should be attributed to the brands for the quality of their products and their admirable unwillingness to compromise the brand values that consistently ensure quality.
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Lesson #5: Technology Continues to Empower the Consumer
…Understandably, a brand’s worst nightmare is of being hijacked by disgruntled customers with plenty of attitude, heaps of time, and a high-speed Internet connection.
Brands, however, must respect social networking. Corporations spend millions of dollars on marketing research to understand what their customers, and potential customers, are thinking. With the Internet today, that information is everywhere.
Brands must deal with positive feedback by being grateful, intelligent, and gracious, reaching out to loyal customers and building mutually beneficial relationships with prospective ones. Negative feedback should be treated deftly and honestly, and never create the impression of being defensive, paranoid, or dismissive. How a brand reacts to negative feedback and criticism speaks volumes about its values, ethics, and maturity. Above all, respect the power of pedestrians on the Web…
After all, brands that don’t value input from their customers don’t have much value themselves.
At least that is what online consumers are telling us.
Edit by SAC
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Full article:
http://www.brandchannel.com/start1.asp?fa_id=441
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