Vivaldi Perspective on the Evolution of Branding: From Communications to Value Creation
The landscape of branding has undergone significant transformations, evolving from simple marks of ownership to complex ecosystems of value creation. This evolution can be segmented into three pivotal eras: Brand as Communications, Brand as Experience, and Brand as Value Creation. Each era represents a distinct approach to how brands interact with their consumers and society at large, reflecting changes in market dynamics, technological advancements, and shifts in consumer expectations.
Brand as Communications: The Madmen Era
The first era, known as the “Madmen era,” spans from the 1960s to the 1980s, the golden age of advertising where branding was predominantly about communication. Brands served as signals of quality or the source of a product, acting as shorthand to consumer perceptions. The focus was on what the brand sells and who it is, aiming to create awareness and a memorable image through a Unique Selling Proposition (USP). Brand-building was an inside-out process, emphasizing product features or benefits through one-way communications, typically advertising. Engagement with consumers was relatively passive, fostering loyalty through reward programs within a linear customer journey. The growth model relied on brand or category extensions, exploring growth opportunities in adjacencies.
Examples of brands: Marlboro Man, P&G’s Tide, Crest and Pampers, VW “Think Small’, brands are defined around major campaigns
Brand as Experience: The Brand Leadership Era
Transitioning into the Brand Leadership era, brands began to be seen as strategic assets, with their management climbing to C-Level importance. This era answers what the brand stands for and against, focusing on creating relevant differentiation and brand knowledge to spur consumer actions, and consumer response, defined as brand equity. The development of brand strategies and identity systems, like those proposed by Aaker, Joachimsthaler, Kapferer, and Keller, marked this period. The concept of brand architecture emerged which led to the management and branding of the entire portfolio of products and services of a firm. Brand-building evolved into a two-way communication process, with experiences playing a crucial role. Engagement models centered on fostering relationships and building communities, with the customer journey becoming more complex, dynamic, and omnichannel. Growth shifted from a supply-side logic to a demand-side logic, defining demand spaces based on consumer needs in daily life.
Examples of brands: Dove, Harley-Davidson, Nike, GE
Brand as Value Creation: The Human-Centered Era
The latest era, Brand as Value Creation, emphasizes brands as actions rather than mere statements, prioritizing the improvement of people’s lives through dynamic and interactive engagements. Brands are now seen as platforms for creating meaningful impacts. This era is characterized by a holistic value model that integrates an identity-driven approach, a customer-based brand equity approach, and a new value creation model. Brand architecture now involves an expanded, dynamic portfolio that extends beyond a single firm, focusing on the markets or arenas the brand addresses. Brand-building relies on dynamic interactions across multiple stakeholders, with an emphasis on context-aware engagements and commerce based on real-time data, enabling personalized experiences that are anticipatory, and deeply integrated into the consumers’ daily life context. The engagement type revolves around shared value creation, leveraging network effects, viral and learning effects. The customer journey extends to the ecosystem journey, leveraging data, analytics, and technology to create personalized experiences. Growth is envisioned through identifying future life domains, with potential for exponential growth via new business models.
Examples of brands: Airbnb, Tesla, Glossier, Warby Parker, perhaps Netflix (vs Disney) see this article.
Comparative Analysis
The progression from Brand as Communications to Brand as Value Creation illustrates a fundamental shift from a product-centric to a human-centric approach. Initially, branding focused on differentiating products and services through advertising, gradually moving towards creating meaningful experiences via innovations and, ultimately, to adding value to customers’ lives in tangible ways. This evolution reflects broader societal changes, including advances in technology, shifts in consumer expectations, and a growing emphasis on sustainability and social responsibility.
In the first era, the relationship between brands and consumers was largely transactional. As we moved into the Brand as Experience era, the focus shifted towards creating emotional connections and immersive experiences. Now, in the Brand as Value Creation era, the relationship is symbiotic, with consumers actively participating in value creation alongside brands.
Conclusion
The evolution of branding from Brand as Communications to Brand as Experience, and finally to Brand as Value Creation, highlights a broader trend towards more authentic, meaningful, and sustainable business practices. As brands continue to navigate this complex landscape, the successful ones will be those that not only adapt to these changes but also proactively shape the future of branding by creating genuine value for their customers and society at large. This journey underscores the importance of understanding and responding to the evolving needs and expectations of consumers, emphasizing that the heart of branding lies not in the products or services offered but in the experiences and values they represent.