Branding in the New Economy

By Eleanor Haas

It began as a stamped mark of ownership on cattle.  It went on to become a banner waved in advertising to help sell more products.  Now the brand is at the heart of the creation of value, where the customer, business and product come together.

It remains a prized marketing communications tool of marketing executives and their branding and ad agencies.  But for thoughtful business executives attuned to the accelerated pace of change introduced by the widespread use of IT and the Internet and intensified by what Chris Anderson has called “the diseconomies of size,” only recently perceived as a result of the financial crisis of 2008-2009, the brand is gaining recognition as a specialty in its own right - a specialty that has implications for corporate business and operating strategies.

What is a brand?  The very essence of a business imprinted in the minds of people through their personal experience – the perceived identity. In other words, it’s no longer what a company says about itself.  Now it’s what people feel in their gut regardless of what the company says.

What justifies the new importance of this brand and its role as a specialty in its own right?  (1) The need to differentiate in a world where giant companies are downsizing and turning loose hundreds of thousands of their employees, creating an immense wave of both entrepreneurs and their new businesses and independent contractors and their businesses as well. (2) The need to be identifiable in a world where technology makes it surprisingly quick, easy and even comparatively inexpensive to create new products, some of them truly innovative, many of them all too similar to each other.  Together all these businesses and products represent an overwhelming flood of names competing for attention.  (3) The need to sustain relationships with investors, employees, suppliers and customers beyond buying and selling transactions in this world of constant innovation, commoditization and change.  (4)  The need to live the brand for it to be authentic and therefore effective.

Today’s new economy is totally different from that of the 1990s.  The latter was an illusion based on misunderstandings about the new technology.  The former is grounded in the realities enabled by that technology and the gradual dismantling of the old economy.