Entries Tagged 'branding' ↓

We think we have plenty of choice now.

That’s nothing compared to what is going to happen next.

Here’s what I predict:  new brands from cultures to which westerners are unaccustomed will find an open market in developed countries, where there is always a welcome for the new. We will see an increasing profusion of brands from everywhere in the world in our stores and supermarkets in the USA and Europe.

Just to take one example: pharmaceuticals, over the next decade, will provide the same choice as restaurants do now.  In 2020 your local Boots or CVS will stock over-the-counter conventional pharmaceutical products, homeopathic products, ayurvedic and similar products from India, plus a range of Chinese medical products, and probably also products from the Graeco Arabic tradition.

And so on.

This is a natural extension of the fact that as consumerism loses its veneer of charm and even respectability in the West, it is gaining it in the developing world.

Here’s how I see it playing out:

People in the BRIC countries—Brazil, Russia, India and China mainly, but Vietnam, Malaysia, Indonesia, Mexico and lots of other places too—are busily exchanging bicycles for motorcycles, motorcycles for cars and street markets for shopping malls. People who never had access to fixed line phone services are jumping straight to cell phones.

Initially as you might expect, these new consumers have fallen/are falling in love with previously unattainable luxury products. Western brands, symbols of wealth, self indulgence and power – Burberry, Chivas Regal, Hermes, Prada, Bentley, Ferrari and all the rest of them lead the way. A bit further down the scale other Western products like Coke, Pepsi, McDonald’s, Disney, Levis, Gap and similar brands are also welcome invaders.

We’ve seen this transformation happen a few times now, so we can follow what will happen next.  The next phase is all about learning how major successful brands do it, and absorbing the knowledge. It’s going on in China right now, that’s why Lenovo has bought IBM’s PC business and Shanghai Automotive has bought the remains of Rover and MG. In this phase of development, foreign brands are absorbed into the nation. They become naturalized citizens of their new homeland.

Next comes the phase when the nation starts developing its own brands, sometimes imitating and then surpassing the Western models on which they are based. The Japanese did this with Lexus and other cars in the seventies and eighties. Sometimes, like Samsung, countries create brands which are so strong that they overwhelm what’s frequently called the country of origin effect. In other words the new global brands have much more credibility than the country from which they originate. Samsung is much better known than South Korea.

You can see this happening right now in a number of different industries: Brazil is the world’s fourth largest manufacturer of civil aircraft with Embraer, Mexico is the world’s largest cement company with Cemex. Neither of these companies bothers to talk much about its country of origin because they add nothing to corporate credibility.

Finally, there emerge a few corporations whose brands don’t seek to emulate the Western models at all. They begin to develop products and brands which derive from the purchasing habits, customs and idiosyncrasies of the nation itself. This development has enormous potential significance. Tata, the Indian conglomerate, in everything from hotels, to steel, to software, to cars and trucks, has recently introduced the Nano – the ‘one-lakh’ car (£1300). This is new. Nothing else like it exists in the world. It’s certainly a consumer product, but it’s an Indian consumer product designed largely for an Indian (that is an aspirational, but quite poor) market.

The Nano and similar products are precursors of a new trend: brands created in India, China and elsewhere, primarily for local and national markets which also have potential in the rest of the world.
Exciting times, eh? I’ll say.

Stop for a second and think about the Toyota Prius’ basic marketing claim. This is an automobile sold not as the fastest car, the most comfortable car, the sexiest or sportiest car, or even the most economical car, but the cleanest car.

If this sort of pitch didn’t now seem to us so commonplace, we would be would be better able to notice how truly historically anomalous it is.  And if you needed any more evidence that the Western world is developing a conscience about its wasteful, consumerist habits, the not-inexpensive hybrid Prius might be it.

(What I’m talking about is not just happening in economic consumption, it’s affecting political consumption too. David Cameron, leader of the British opposition Conservative Party, had a wind-powered generator installed on his house and, rather ostentatiously, cycles to work…sometimes).

So what happens if doing good—and being seen to be doing good—becomes part of normal social and economic behaviour?  What happens if more and more people demand a philanthropic ingredient in the purchases?  What happens if, to put in another way, giving becomes the new buying?

I’m pretty sure we’ll find out soon enough, because it seems to me this is the way the world is going.

Naturally, this trend is particularly pronounced amongst the younger generation, amongst whom some are starting to examine in minute detail things like where their food comes from, rejecting the exotic and imported products in favour of environmentally healthier local foods which have racked up fewer air miles. (Since Fairtrade products come from poor but faraway countries, this is a paradoxical, not to say contradictory trend, but since when did inconsistency inhibit behaviour?)

Organizations are catching on, slowly, trying with varying levels of success to match the sophistication (or is it just a fair-minded fickleness?) of consumers.  Some businesses have gone further than run-of-the-mill CSR and set up social foundations to create products and brands for, and spread profitability to, stakeholders all of whom are one way or another deserving—people who’ve slipped through the social network. Micro banking is a classic example of a socially responsible institution which is being absorbed into the conventional mainstream banking system.  The Mexican bank Ixe has created Banco de Uno for previously unbanked people.  It’s a kind of commercial version of a micro bank.

All of this will have a massive impact on charities and NGOs, whose cosy world already is beginning to change as donors themselves are coming to bring the same levels of financial and marketing discipline into their charitable activities as they employ in their business lives.

Right now, I’m afraid there are a very few professionally managed charities and NGOs; most are, for all intents and purposes, small craft-based organizations run by enthusiastic amateurs.  And the ambivalence of charities about professionalism inhibits them from seizing new opportunities.

Over the next decade or so, charities and NGOs in the Western world will become more streetwise, more worldly and, as they say, more marketing savvy. They will become much more professional. They will learn how to attract the attention of donors (they may even call them customers), how to win them and how to make them feel a strong sense of identity and a kinship with what they do.  If, as I predict, giving becomes the new branding, then giving, too, will most certainly be branded.

As charities go through this process, they will engage with the professional branding consultancy world. The opportunity is exciting – even challenging.