Branding Value

A NYT article on declining brand loyalty for automobile purchases intrigued me.

As the following graphic shows, this has been proceeding since the 80s.

The article claims the change in consumer behavior arose to a change in product quality and new options on the market. Purchasing behavior became focussed on value. I find that difficult to swallow for three reasons. Until recently most of the cars on the road had very little value in terms of economy, maintainability, safety and retention of value. Automobiles did not become homogeneous from the 90s onwards.

Cars have (at least historically) provided a strong personal statement - people very often identify with their car. As probably the most expensive appliance and the second or third most expensive item (after lodging and possibly health), a choice of vehicle is a well considered one.

Branding has increasingly become a dominant factor in sales. The corporate image, name and long running advertising messages have built for many products a form of identity for the brand that sells on its own. One often sees items (clothes, accessory, stationary, etc.) that prominently features brand imagery, though it seems to have no other intrinsic value. This tendency seems to choke off many forms of retail and product diversity. I see the same exact clothing retail venues in the center of cities (and airports) around the world during my frequent business travel. Despite the continually declining price of textiles, accessories and many other consumables - the range of merchandise seems quite uniform and plastered with the same logos. I have expected product quality and utility to diminish to the point that only a giant brand name placard remains.

The decline in diversity of offerings arises due to the intrinsic interest of market dominating concerns to push their leading brands into as many hands as possible. A 'brand franchise' has invested so much into advertising that any further diversification of the products associated with the brand threatens to dilute its value. The example of games comes to mind. American toy and game manufacturers appear to prefer to push the same set of games into every household than introduce new products. Thus, when one approaches the game rack in a retail outlet aimed entirely at mass consumption (e.g. Walmart) - the game selection available has hardly changed in 40 years! (One still sees Scrabble, Sorry!, Clue, Monopoly, etc.) Outside of this sphere of brand stasis, the game market has exploded with an increasingly rich range of products available only as repackaged imports in the U.S..

Anti-competitive practices (e.g. Microsoft successively devouring different sectors of the software industry) result in further declines in diversity, of course. The Microsoft brand has an inevitability for the consumer (the long-standing assumption was without it, one cannot get work done). However, it is doubtful whether monopolists like Microsoft have created brand loyalty by suppressing alternatives.

Similar trends to automobiles exist for other products - for example, for cigarettes. Even in 1994, Marlboro began to discount and respond to loss of established brand identification as a means to dominate a consumer market.

I wonder if brand-based consumption as an esthetic may be on the wane. I cannot hope that consumption patterns themselves have diminished, but perhaps compulsive purchases (of items that deplete, such as soaps, food, feul...) will transition to a more rationalized set of options - perhaps allowing for more diversity and an entry to local suppliers. For large purchases (discretionary items such as consumer electronics, or compulsory ones - for example, a vehicle) more attention to value arise. For the remainder of purchases in the 'habitual consumption' or 'mandatory but gradual accumulation' categories - I can only hope that brand lock-in will wane at this point, as western consumers become aware of their finite means.

This pausing in consideration of 'what should I buy?' could mean better products. Perhaps merely asking that question may result in an unexpected answer: 'Nothing!' Though this doesn't swell 'growth of economies' I would warmly welcome less spending for its own sake!