The Death of Brands?

Not if branders really get (and give) the value of their value.

A recent Time Magazine story entitled Brand Names Just Don't Mean As Much Anymore posited that belt-tightening in the wake of the Great Recession has brought on the slow, steady decline of brand-name goods. The story cites the no-name or generic items that sit next to the similar (sometimes identical) brand-name equivalents on grocery store and drugstore shelves.

Consumers have long known that generics compare well to the brands in quality, and purely outshine them in price. It seems that in this "new normal" of everyday cost-consciousness (where 93% of shoppers report changes in buying habits due to the economy), consumers are now choosing generics with increasing regularity.

So should the brand names be panicking? Well, not exactly — especially since many of the brand-name producers also supply the generic or store-brand goods. This trend might be cutting into profits, but it isn't yet erasing them.

But consumer goods suppliers, and indeed brand managers everywhere, should definitely be paying attention. What we're seeing here is a shift in the consumer mindset, and a forecast into their brand-loyalty — or the lack of it — for generations to come.

Because brand loyalty hasn't died, it's just stopped being blind. Consumers really do want to embrace familiar brands, instead of scrambling for bargains each week. Consumers are happy to support companies, products, and yes, brands they believe in...providing they see those things as worthy of their support.

And what makes them worthy? Is it price? Not exactly.

It's value.

Don't make the mistake of conflating price with value. Price is an element of value, but it's not the entirety. Value is a complicated algorithm that's computed unconsciously in the consumer's head. It integrates variables like quality, availability, and even brand equity, to arrive at a value-based buying decision. And clearly, if two side-by-side products are identical in every way except price, that lower price tips the scales of value.

So brand managers, what can you do if you can't compete on price? Compete on value — make a better product, market it better, service it better, and build a quality-centric brand to stand behind it.

The best part of this formula for success is that it doesn't just apply to the consumer goods that Time was speaking of. If you've got a brand, no matter your business, focus on value and you can't go wrong.

The C4:

1. Time Magazine just reported that due to shifts in buying habits, brand-name consumer goods are losing market share to their generic, no-name, or store-brand equivalents. We like Time's reporting, but this particular revelation surprised exactly no one. 
2. Economies can change rapidly, but buying habits, not so much. Consumers are now in the habit of seeking out the best values, brand loyalty be damned. This is the new normal, and marketers need to get used to it.
3. It's not (necessarily) a matter of price. It's value. It's bang for the buck. If a no-name brand compares well in quality but is 20% cheaper, most consumers won't agonize over the decision very long before putting that no-name in their shopping cart. 
4. Marketers take heed. No matter what you're selling, you'd better be selling it with value. If you can't compete on price then you have to be offering something else, something of value, that the cut-rate brands just can't provide. This is an axiom we all should have been living by all along, but now it's a matter of success or failure.