How Internet has changed the game for famous brands

"If Coca-Cola was to lose all its production-related assets in a disaster, the company would survive. By contrast, if all consumers were to have a sudden lapse of memory and forget everything related to Coca-Cola, the company would go out of business.”

This famous quote is attributed to one Coca-Cola marketing executive outlining just how valuable the brand was to the company’s fortunes. He was probably right.

In a 2007 survey of the value of global brands by branding agency Inter-brand, Coca-Cola’s brand equity was valued at $65.3 billion (Sh5.7 trillion), just under half the company’s true market value. This goes to show just how much of its success is attributable to the brand it has created rather than the product it produces.

Traditionally, brands and brand loyalty were built on standard quality, prime exposure and extended time. You had to have a fairly standard product that was well publicised over a long time and slowly the brand sank into people’s subconsciousness.

The traditional strength of the brand used to be determined by the dictates of being the pioneer vendor with a mass product and massive advertising budget.

Couple that with the growth of mass media and in-your-face advertising and we saw the latter half of the 20th Century create one of the most brand-conscious generations in history.

The successful pioneers in mass market categories ended up creating near cult-like following and almost attaining monopolistic proportions.

If a radio was made by Sony, film by Kodak, detergent by Unilever, salon car by Peugeot, ketchup by Heinz, you had no qualms second guessing its quality.

It was not long ago that the product became the definitive identity of the category – consumers started thinking that all powdered detergents were called Omo, all margarines Blue Band and all cola sodas Coke.

Brands, like wine, became better with age and hence their value as such directly grew over time. It is this notion of longetivity that saw many advertising slogans add “since *insert ancient year here*” to their taglines to prove to customers that they have been here long enough to know what they are doing.

But then the rug of brand positioning as we knew it is quickly being pulled beneath our feet. The idea of standard quality exposed over a long time as the definitive element of a stable brand has been proven to be quicksand as the 21st Century has conjured to create a whole new element of what brand represents.

One of the factors proving to be a myth is that of lengthy exposure time as the ultimate determinant of brand depth and stability. Long gone are the days when the only brands that stood out were from companies that have been in existence for a couple of decades.

Now we are faced with the prospect of overnight successes. Consider a child born on September 3, 1998. She has to wait till September this year before she can celebrate her sweet 16 birthday.

Yet she can boast of being older than Google (at least by a day), LinkedIn (founded December 2002), Facebook (founded February 4, 2004) and a cool eight years older than Twitter (founded March 21, 2006). Even the first iPhone was only launched seven years ago on June 29, 2007.

Yet she will have grown in a world where these specific brands are as ubiquitous and probably just as valuable as iconic car brands such as Mercedes (1926), Ford (1903) and even the everlasting Coca Cola (1892).

The second item that is facing stiff opposition is that of standard quality. For a long time, the pioneer vendor set the standard for the quality of the product being produced in a particular category.

The standard of computing was set by IBM. Radio and television standards were set by Sony. Detergents and edible oil products had their standards set by Unilever.

These companies built standard products that they would expose to massive advertising and they would gather loyal customers who believed every word they were told.

The saying goes, build a better mouse trap and the world will beat a path to your door. However, in the last century, even if you built the best mouse trap and were located on top of the hill, unless you had massive resources to hire a construction company to tarmac the road to your premises (advertising), no one was going to beat a path to your door by accident.

The high cost of advertising acted as an effective barrier to new entrants and hence flattened out innovation and competition.

But then the rules seemed to have changed. Disruptive innovation has seen many upstarts create far superior products to those of former market leaders.

But even scarier for the big boys, the cost of building the road to your premise has plummeted considerably with the digitisation of mass media. Now you build a better mouse trap and you can be sure that the world will likely get to know about it sooner or later.

The Internet has transfered the sword of power from the vendor to the consumer by enabling the end user access to detailed reviews by other users and not just depending on the brand promise. Most people tend to value a stranger’s opinion about a product rather than the official brand position.

Does this mean that brands are on their death bed? Far from that. But disruptive innovation may mean some kid somewhere shy of her 16th birthday may be plotting your downfall as she innovates a superior mouse trap to yours.

For elite historical brands my advice is, be afraid. Be very afraid.

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