Twilight of the Brands
It's a truism of business-book thinking that a company's brand is its "most important asset," more valuable than technology or patents or manufacturing prowess. But brands have never been more fragile. The reason is simple: consumers are supremely well informed and far more likely to investigate the real value of products than to rely on logos.
Absolute Value, a new book by Itamar Simonson and Emanuel Rosen shows that, historically, the rise of brands was a response to an information-poor environment. If a car was made by G. M, or a ketchup by Heinz, you assumed that it was pretty good. It was hard to figure out if a new product from an unfamiliar company was reliable or not, so brand loyalty was a way of reducing risk.
Today, consumers can read much research about whatever they want to buy. This started back with Consumer Reports, which did objective studies of products. It has given ordinary consumers easy access to expert reviews, user reviews, and detailed product data, in an array of categories.
A recent study found that eighty per cent of consumers look at online reviews before making major purchases, and a host of studies have logged the strong influence those reviews have on the decisions people make. An undesirable product can become a laughingstock (笑柄） in a matter of hours. In the old days, you might buy a Sony television set because you'd owned one before, or because you trusted the brand. Today, such considerations matter much less than reviews on Amazon and Engadget and CNET. As Simonson said, "each product how has to prove itself on its own."
It's been argued that in a world where consumers are overwhelmed with information, the information will actually make brands more valuable. Indeed, the role a brand plays in people's lives has become all the more important, But information overload is largely a myth. And this has made customer loyalty pretty much a thing of the past. Only twenty-five per cent of American respondents in a recent study said that brand loyalty affected how they shopped.
A. But what really weakened the power of brands is the Internet.
B. For consumers this is ideal: heightened competition has raised quality and held down prices.
C. When consumers had to rely on advertisements and their past experience with a company, brands served as a guarantee for quality.
D. A large quantity of consumers fail to get a great deal of information efficiently and effectively.
E. The rise of social media has sped up the trend to an astonishing degree.
F. Most consumers figure out how to find what they're looking for without spending huge amounts of time online.
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