Although becoming a recognized brand brings many advantages as recorded in the history of commercial activities, there are still opinions that go against the whole above general concept.Particularly since the early years of this decade and with the release of Naomi Klein’s widely circulated book “No Logo,” many have blamed brands for the current state of international trade.
Even without such anti-globalization activities, we still have to admit that many famous brands in the world today are not as strong as they used to be. In previous years, the list of the world's top 10 brands used to change very little from year to year, but most of the brands that were on the list a few years ago have now dropped much lower on the list.
In fact, strong brands can still command premium prices, but the premium has decreased. And while business reports may vary widely, it’s clear that customer loyalty to brands is not as strong as it was a decade ago.
To understand why this is happening, we must first understand why brands used to be so much more powerful than they are now. Many brands have been around for more than a century, when products were largely commodities and branded products offered customers assurances of quality and consistency, and thus were worth paying a premium for.
In later years, as the number of products increased and the choice became more diverse, brands made shopping easier. Together with mass media advertising, building a brand became much easier and less expensive. And once a brand was established, it became easier to maintain a competitive advantage over many years.
Today, most consumers in free-market economies live in a very different world. Their lives are busier and more complex, and they get their news about the world around them from a variety of sources. More importantly, consumers are more likely to experiment with new products, because with the convenience of information comes a reduced risk of making bad choices.
So what does this mean for brands that aspire to thrive? It turns out that they have to really work to grow. However, the branding trends in Vietnam may differ from those in established free market economies around the world.
The Vietnamese market does not have a hundred years of experience in brand development like the markets above, so it is not too passionate about brands but also not too indifferent. Besides, over the past decade, with half of the time in Vietnam, I have had the opportunity to record my own observations. I see a repetition between what is happening here and what happened when I lived in Japan in the first half of the 1960s – when Japanese consumers were interested in anything made in the West and were skeptical about the quality of domestic products. Just a decade later, this mindset has completely changed, which is similar to what is starting to happen in Vietnam.
Furthermore, most observations of brand decline are based on the world’s largest brands. But branding is not just for the largest brands, but for any business that is passionate about the products and services it offers and is smart enough to develop strong relationships with its customers.
Today's markets and media choices are increasingly segmented, and information spreads faster, giving small businesses more opportunities to leverage what they have and establish a foundation for growth.
In this way, branding has come full circle and returned to where it started. Consumers are actually looking for more than just quality and consistency in brands. And they expect trusted brands to reach out to them in more subtle ways than ever before. Gone are the days when a logo was enough. Consumers now lead more challenging lives and if brands truly reach out and understand their needs, they will be rewarded with customer loyalty.
Richard Moore Associates
