John Gerzema and Ed Lebar recently published a book which speaks to a previously unknown bubble in the US economy. This bubble represents $4 trillion dollars in the S&P market capitalization alone. It's twice the size for the subprime mortgage market and accounts for one-third of all shareholder value.
Give up? It's 'brand value'!
The book is entitled “The Brand Bubble: The looming crisis in brand value and how to avoid it.” Learn more about it on their website: www.thebrandbubble.com.
Marketers refer to 'brand value' as the value consumers put on one brand over (or under) another. Think of it as how much more you would pay for brand name paper towels versus the store-brand stuff.
The Brand bubble alleges that investors are irrationally overvaluing brands as consumer brand loyalty falls dramatically.
Here’s the thing.
This Brand Bubble (if there is one) is likely relegated to the highly homogenized products and services of the B2C marketplace. Are you particularly brand loyal to Pfizer's drugs over Bristol-Myers Squibb's? I doubt it.
This Brand Bubble really comes down to those businesses who have been riding their own coat-tails far too long. They may promise new and better, but we end up with tried and true. The only way consumers and investors will see them beginning to live up to their name is when that bubble deflates a little. If a business is only worth its logo, then the bubble could burst. Since any investor who chooses his or her investment portfolio based on those businesses with the pretties logo deserves a swift kick in the pocketbook, I see no danger here.
The Brand Bubble may be crying “The sky is falling!”, but we all know how that turns out.
Branding is an important part of a successful business. However, when consumers look to the less expensive, generic product, don’t blame the brand—blame the business.
Related Links:
- Learn about Rebranding on our post: “Ruin a Rebranding in 5 steps.”
- Having a Brand Identity crisis? Check out JDM’s Brand Identity services page.
- How do your favorite brands measure up? Check out The Brand Bubble’s BrandAsset Valuator.
How in the world do they calculate "brand esteem" and the like for the BrandAsset Valuator?
ReplyDeleteSounds like a lot of hot air to me...
Justin,
ReplyDeleteGreat post. - Mark Willaman
I do agree... almost 100%. Agree totally with your closing statement, "when consumers look to the less expensive, generic product, don’t blame the brand—blame the business." Less so when you dismiss the Chicken Littles completely with "The Brand Bubble may be crying 'The sky is falling!', but we all know how that turns out."
ReplyDeleteWe don't know how this turns out. We've never been here before. Id est-- mortgage re-packages blow up, Fannie and Freddie become wholly-owned subsidiaries of Uncle Sam, the people who did the re-packaging get Big Welfare, credit freezes, unemployment at a 14-year high, GM wanting life support in the ER. What's next? Here's a guess and a clue - American Express gets to be a bank to be in line for... Big Welfare! Why would they need that? Maybe the next big default tsunami is credit cards. Just a wild guess.
Back to Brand Bubble. Brand loyalty is completely over. It was almost over before September, but now - I truly believe - it's VALUE for the PRICE I PAY. Give me VALUE for the PRICE I PAY and I'm loyal; Don't, and I'm not.
Don’t blame the brand—blame the business.
Thanks for the comment, theDH.
ReplyDeleteBy, "We all know how that turns out" I mean, we all know the sky is not falling when it comes to "Branding".
Though highly publicized books crying "The End is Near" in regards to a loss of brand value might sell, I say, "So what?"
It belittles the real problems facing us today like consumer spending and the financial crisis.
Loyalty to a logo is the least of our worries!