What is the Role of Brand in the Digital Economy
Many thinkers postulate that the role of brand is to define the organization’s purpose.
First of all I would like to wish long life to the European Business Magazine and I hope that its contribution to the understanding of the new era in the economy and the social affairs could be a matter of high utility.
I spent much time in my professional life pondering how the role of brand is changing in the midst of digital transformation. As branding grew to prominence, important branding practitioners define the role of brand as a decision tool, information search and risk mitigator. Brand helped guide customers to better purchase decisions. As we shift in new era, called the digital economy, customers are socially connected with one another in horizontal ways of communities. Today, communities are the new segment. Unlike segments, communities are naturally formed by customers within the boundaries that they themselves define. Customer communities are immune to spamming and irrelevant advertising. In fact, will reject a company’s attempt to force its way into these webs of relationship.
To effectively engage with a community of customers, brands must ask for permission. Permission marketing revolves around the idea of asking for consumers’ consent prior to delivering marketing messages. However, when asking for permission, brands must act as friends with sincere desires to help, not hunters with bait. Similar to the mechanism on Facebook, customers will have the decision to either “confirm” or “ignore” the friend request. This demonstrates the horizontal relationship between brands and customers. However, companies may continue to use segmentation, targeting and positioning as long as it is made transparent to customers. But they must take into account the brand clarification of characters and codes.
In a traditional sense, a brand is a set of images – most often a name, a logo, and a tagline – that distinguishes a company’s product or service offering from its competitors’. It also serves as a reservoir that stores all the value generated by the company’s brand campaigns. In recent years, a brand has also become the representation of the overall customer experience that a company delivers to its customers. Therefore, a brand may serve as a platform for a company’s strategy since any activities that the company engages in will be associated with the brand.
In our connected world, the concept of marketing mix has evolved to accommodate more customer participation. Marketing mix (the four P’s) should be redefined as the four C’s (co-creation, currency, communal activation, and conversation).
In the digital economy, co-creation is the new product development strategy. Through co-creation and involving customers early in the ideation stage, companies can improve the success rate of new product development. Co-creation also allows customers to customize and personalize products and services, thereby creating superior value propositions.
As we shifted into the experience economy, practitioners evolved their thinking to focus on defining on brand as actions that contribute to a more fulfilling experience. In fact when you look at new brands like Airbnb and Uber, the brand and the experience are one in the same. The brand simply took shape as the experience gained traction.
Lately, many thinkers postulate that the role of brands is to define the organization’s purpose. They hold that purpose driven brands are uniquely capable of forging emotional based connections with employees, b2b and b2c customers. This is especially true when building an employer brand strategy.
My sense is that brand plays all of these roles, but no one of these ladders up to the primary role for brand in the digital economy. A review of practitioner websites yielded no consensus. In fact, it led to more questions than answers. It seems that the branding world is at an inflection point with little clarity as to the path forward.
By Nikos Karageorgiou – President of the Greek Association of Branded Products Manufacturers
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