The Warc Blog

The Warc Blog

Category placeholder disloyalty
Robert Passikoff, President, Brand Keys, Inc
Robert Passikoff

There's been a lot of chatter about how the economy has shifted consumers' preferences away from "brands" to what people are classifying as cheaper "brands." Indeed, there is lot of talk about "brand disloyalty" these days. And yes, tighter budgets &ndash particularly over longer periods of time – usually result in consumers being more careful about with their money.

The difficulty in attributing these shifts in consumer behavior to "brands" is not so much an inaccurate reporting of behavior, it's that the use of the term "brand" is inaccurate. These shifts aren't really away from "brands," not, at least if you define a "brand" as follows:

A brand is a name, term, symbol, or combination thereof that identifies goods and services so strongly imbued with values and articulated and emotional meaning as to be easily differentiated by the public from the competition.

It's the underlined part that provides the exactness of the characterization of a real brand. The reality is that most product and services &ndash no matter what their level of awareness &ndash aren't actually "brands" anymore. Most used to be, but likely that was back in the last century. What were once brands quietly morphed into what might more accurately be described as "Category Placeholders."

Category Placeholders is a more accurate designation for products and services that have high levels of awareness in the categories in which they compete, but whose values are so basic, so rooted in primacy of product or service, and so absent of meaning that they are not meaningfully differentiated from their competition in the minds of the consumer &ndash aka, the "public." Thus, they are comparable.

And today comparable products or services that have nothing other than their awareness to trade on usually find they have to trade on price. And yes, in tougher economic times people do look for more-economic alternatives. But the market reality is that consumers still won't pay less for something that doesn't deliver some tangible, and minimally acceptable, delivery against the category promise. It isn't just about price, it's about value for dollar.

No, the reality is "brands" &ndash real brands &ndash are surrogates for value. In a soft economy, with more readily available on-line price and coupon aggregators, and in the absence of real brand values, people will always going to look for the deal. But what you are seeing isn't disloyalty to a brand. It's disloyalty to category placeholders that have been passing as differentiated brands.

This economy serves to remind us all of the unchanging reality of any marketplace, up or down: price always stands alone when value has left the building. Only true brands can own loyalty. Everything else is just short-term sales.

Subjects: Brands, Consumers

01 November 2011 10:37

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