Brand Destruction

Earlier today in the American Marketing Association's Brand Strategy and Brand Management SIG, a member posted an intriguing observation.

This SIG member opined that U.S. companies work more to destroy and devalue brands rather than to build and nourish them. This person then went on to challenge the group to think of any brand that is as highly valued today as it was 5 years ago. He then asked a question, "Why do companies destroy brands?"

Firstly, I don't believe that companies consciously devalue their own brands. I believe the market takes care of much of that for them in a fierce, hyper-competitive marketplace where differentiation between a myriad of offerings in any single category is extremely challenging. Further, price pressures and readily-available information via the Internet helps drive just about everything toward commoditization. (For those new to the concept of commoditization, think "unbranded" and consumer choice driven almost exclusively by price.)

I also believe that the way most companies manage brands is unhealthy to long-term brand value.

I have reached the conclusion in my independent research that brands are, by nature, long-term entities and brand managers (and other corporate managers) are critters who are more interested in short-term -- especially quarterly -- results in order to satisfy their bosses and shareholders. One is focused on the short-term and the other is, by definition, a long-term concept. The two are not always in synch with one another.

Brand managers are primarily measured and assessed on their short-term results and when given a choice between making a decision that's in the best interest of the brand vs. making a decision that's in the best interest of their immediate career and income, they'll choose what's in their own best interest first. This may or may not always be in the best, long-term interest of the brand.

Let's face it. Price promotions and other marketing activities geared toward boosting short-term sales may make the brand look good by providing short-term bumps in sales, but these practices actually hurt brands in the long-run because they train consumers to wait for sales, stock-up when items go on sale or they simply reduce the likelihood that anyone will pay full price for a product or service.

When this happens you have a recipe for brand destruction.

A brand means that a product or service delivers superior and unique value that is worth a premium price.

Self-interest, laziness and simple lack of any unique product attributes cause the brand manager to fail to build, communicate and deliver that unique, superior value.

In the absence of unique value, pressure is placed upon low price and the destruction of the brand begins.