Vikas Shah, Thought Economics, February 2012
Vikas Shah, Thought Economics, February 2012
In England, if you give someone a gift, they will likely thank you. In Germany however, you will almost certainly be arrested. Why? In the minds of English speakers, it is generally agreed that a 'gift' is a thing given out of kindness while in the minds of German speakers, it is generally agreed that the word 'gift' means poison. Understanding the semantics of language reveal the profound power of words. Hate, strength, pain and war... each of these conjures up emotions and meaning in our minds, giving them unique personal significance (supported by a definition and context which is largely agreed by the other 'consumers' of our language). At a deeper level, the very shape of each letter within each word has meaning. 愛 (the 'ai' symbol in Japanese text) means very little to a non speaker, but to a reader of Japanese, it means love.
Language provides us with a perfect metaphor for brands. Words themselves are nothing, in truth they exist as thoughts with their physical manifestations simply being a relatively organised clump of shapes on a given substrate. The act of thinking itself creates meaning to the various sensory and emotional inputs our biological system receives. In fact, we could argue (as Descartes did with his statement 'cogito ergo sum') that our very existence hinges on the significance of the fact that we are able to think.
These intangible meanings also have a very real economic significance. The top 10 global brands (as measured by the Interbrand index) have a combined value of $432 billion (against their total market capitalisation of $1.7 trillion). This means that (conservatively) just over 24% of the real economic value of these organisations manifests from the thoughts of their market.
The truth is (as Thom Braun writes in his 2004 book 'The Philosophy of Branding'), "...brands and branding are fundamental to the way we experience modern life- and the way we give 'meaning' to it." He goes on to describe how brands represent the world to us, "..they quite literally 'label' for us what might otherwise be a chaotic array of messages. Brands and branding are a feature of the way the modern (western) mind thinks. It is impossible for the modern mind to think without recourse to the sorts of models we commonly refer to as brands. We continually look for ways in which we can 'edit' the world around us. Today, however, it is far more pronounced than it has ever been in the past - simply because the number of inputs is growing at a frightening rate." So how has branding become such an intrinsic part of human culture?
In these exclusive interviews, we speak to Professor Philip Kotler (S.C. Johnson & Son Distinguished Professor of International Marketing at the Northwestern University Kellogg Graduate School of Management and described as 'the most influential marketer of all time') and Martin Lindstrom (Chairman and founder of Buyology Inc, who was voted one of the World's 100 Most Influential people by Time magazine). We discuss the nature of 'brand' and 'branding' together with the role branding plays in our economic and social world.
Philip Kotler is the world’s foremost expert on strategic marketing. He was voted the first Leader in Marketing Thought by the American Marketing Association and named The Founder of Modern Marketing Management by the Handbook of Management Thinking. Kotler’s recent work in evolving marketing strategy and practice to take in the internet, globalisation, new marketing forms and technologies, from blogging to viral marketing, places him at Number 11 in the current Thinker’s 50, the list of the world’s top business thinkers. Philip Kotler is the S. C. Johnson & Son Distinguished Professor of International Marketing at the Kellogg School of Management, Northwestern University. He received his Masters degree at the University of Chicago and his Ph.D. at MIT, both in economics. He did postdoctoral work in mathematics at Harvard University and in behavioural science at the University of Chicago. Professor Kotler has authored over 35 books on all aspects of marketing, including the most widely used marketing textbook in graduate business schools worldwide, Marketing Management, now in its 12th edition. He has published more than 100 articles in leading journals, including the Harvard Business Review, Sloan Management Review, the Journal of Marketing, Management Science and the Journal of Business Strategy. He has consulted for IBM, General Electric, AT&T, Honeywell, Bank of America, Merck and others in the areas of marketing strategy and planning, marketing organisation and international marketing. He has also advised governments on how to develop and position the skills and resources of their companies for global competition. Professor Kotler holds major awards including the American Marketing Association’s (AMA) Distinguished Marketing Educator Award and Distinguished Educator Award from The Academy of Marketing Science. The Sales and Marketing Executives International (SMEI) named him Marketer of the Year and the American Marketing Association described him as “the most influential marketer of all time.” (extracted from 2008 Leaders in London Conference brochure)
Martin Lindstrom, chairman and founder of Buyology Inc, was voted one of the World's 100 Most Influential people by Time magazine and is the author of Brandwashed published by Kogan Page which has recently been voted one of Amazon.com’s business books of the year. With a foreword by Morgan Spurlock, Brandwashed is a searing expose of how today’s global giants conspire to obscure the truth and manipulate our minds, all in service of persuading us to buy. Among the globe's foremost marketers, Lindstrom advises top executives at companies such as McDonald's Corporation, Procter & Gamble, Disney, PepsiCo, Mercedes-Benz, and Microsoft. His previous book, Buyology, was a huge international bestseller and he is also the author of Brandsense voted as one of the 5 best marketing books ever published by the Wall Street Journal and Brandchild (both published by Kogan Page). His 6 books have been translated into more than 40 languages and published in more than 60 countries globally. Lindstrom has been featured and continues to be featured in the Wall Street Journal, Newsweek, The Economist, New York Times, BusinessWeek, The Washington Post, USA Today, Forbes and Harvard Business Review. He also frequently appears on NBC's TODAY show, ABC News, CNN Money, CBS, Bloomberg, FOX & Friends, Discovery Channel, the BBC and most recently America’s Next Top Model. Lindstrom also pens a weekly column for Fast Company and TIME Magazine and appears regularly on America's #1 ranking morning TV show, The TODAY Show, as an expert on consumer awareness and advocacy. In 2011 Lindstrom appeared in the Morgan Spurlock Supersize Me documentary: The Greatest Movie Ever Sold.
Q: What is a brand?
[Prof P. Kotler] Think of “branding” as burning in a name on an animal such as a cow so that the cow’s owner would be known. This protects the owner in the event that the animal is stolen. But we can use the name “branding” whenever anyone affixes their name to something that is available for sale. Because Peter Paul Rubens signed his name to his paintings (several of which were finished by his artisans), they commanded a higher price. Today, the famous contemporary glass artist, Dale Chihuly puts his name on every work of glass although he never makes any of it. The product’s “brand name” makes a difference in the sales price of a brand.
Marketing practitioners have used the term “brand” for some decades but initially it meant only the stage of developing a name for the product or producer. Thus Coca Cola is a brand name and it may be accompanied with a logo and even an expression such as “The Pause that Refreshes.” But today the word “brand” carries much more importance as a platform and a set of promises to the buyer.
[Martin Lindstrom] A brand is really an emotional connection you have with a product or service. It's so emotional in fact that you become fairly irrational in the way you try to justify why you're using it. If you take a look at how we behave as human beings.... If you split our brain into a rational and irrational side.... a brand is what is operating at the irrational side.
Q: What is the economic importance of brand?
[Prof P. Kotler] An increasingly number of companies see their brand as the platform for running their business. The brand creates an identity for the product and/or company in the marketplace. It requires the company to think deeply about its mission, vision, and values. The company has to work hard at developing the image that it wants customers to have of the offering. The brand must not only convince prospective customers and draw them to the brand but also be deeply believed in by the employees and other stakeholders of the company. Thus if Starbucks is to earn a reputation for selling great tasting coffee, its employees must follow a set of practices, including discarding any brewed coffee not sold within two hours of being brewed. We say that for the brand to work, employees must live the brand promise.
Q: Does the nature of "brand" differ in a business to business and business to consumer context?
[Martin Lindstrom] I think it did... but it doesn't anymore. The reality is that you are looking at your private emails and Facebook and so on at work, and at home you will look at your work emails. We split our private life and work life in a different way than we did in the past. Now, these areas of our lives are totally mixed together. I don't think there is a phenomenon like a business man going to work, then taking his suit off and becoming private...there is a blend. This phenomenon has become even more apparent with the introduction of Facebook, Linkedin and so on.
Let me give you a good example. Hypothetically, if you're wife is using DHL to send a package abroad, and they totally screw up, she might tell you... then... when you go back to work and someone has a discussion about moving your company courier account to DHL, you'd almost certainly tell them not to do it!
In this case, emotions go straight from the private world into work-life. That's the reason why I tend to say that B2B brand stands for "Boring to Boring" branding. Today, people fundamentally believe that business to business branding has to be incredibly serious... black and white photos of people in suits, shaking hands, using a tired palette of grey colours... My view is that you should infuse a little bit of emotion into it. Emotions for me in this context does not mean that you just show someone smiling, it means you should use humour... a bit of British wit... something that would make you smile... that disarms you from being a corporate person (trying to be very rational) to creating an emotional connection.
That's the foundation of branding in the business world. Fundamentally it's not different to any other type of branding, but is treated differently today because the people developing it do not know what they're doing!
Q: To what extent are cultural elements such as religions, ethnicity, political groups, and so on brands?
[Prof P. Kotler] Culture is full of branded products. Brand names make a difference. There is a difference between buying a painting by John Smith and buying a Picasso. There is a difference between listening to an 18th century symphony by an unknown composer and listening to a Mozart symphony. Pavarotti drew bigger audiences than most competent opera tenors. One prefers to attend La Scala for an opera than watch the opera in a movie theatre. There are many unemployed talented singers, dancers, and actors who are as good or better than the leading figures but they lack one thing: they haven’t become a brand. A person will buy a second-rate Vincent van Gogh painting than a first rate painting by a less known artist. The buyer is proud to say that he owns a Vincent van Gogh regardless of its quality.
[Martin Lindstrom] I think all the above are brands.
The way that people typically define brands require them to have a tangible, commercial output. I'm building country brands and am working on branding celebrities, royal families and big organisations. This accounts for just as much of my work as branding specific products and services.
All this work has confirmed to me that 'brand' is a matter of creating emotional attachments. If you are an organisation... for example... the Wall Street Occupation... who has a strong message to come out to the public which is not coming across... branding can help create some sort of message that people can relate to and feel emotional connection with (rather than creating an organisation which people don't understand, and which cannot create the empathy which is required to motivate people to stand up and run with them...).
If you want to create an incredibly powerful brand, you need to be aligned on what you want to stand for. Typically this means there's one person running the show- think Steve Jobs, Walt Disney and so on. If you look at the Euro zone, there are 26 different leaders, each of whom are not aligned in what they stand for versus the population. You may, therefore, have 50 different opinions for where a situation should go. Many of these views are even inherited as they may have been in-place since before the individual even became a politician. The reality is, if you want to create a brand for "Europe" or the "UK" - you have to be aligned.
Ultimately, this is not very different to corporate Britain where we see more and more companies becoming self-destructive. There's so much politics going on, that the majority of work is to manage the politics! The underlying trend is for people to get their opinions heard in order for them to stay safe in their job... not necessarily what's best for the consumer.
If I need to align a big company with hundreds of thousands of people... I need to find the common goal-posts. This is the consumer! Typically we say, "the consumer is bored..." I get the senior management to clear a week of their calendar and spend time with the consumer. We literally move in with them! Whether it's the housewife who is using the brand, the younger guy using the product.... the CEO and Chairman all do this.. they may go out and have a drink with them, party with them, go swimming with them.. whatever it takes! It may sound really odd but after this process, the entire senior board come back with a different view. They leave behind their chauffeurs and mansions, and after living in a bedroom where they can hardly turn around they suddenly realise what their consumer is all about and then... when we want to align the brand, develop new products or change the brand- everyone is in suddenly in agreement... why? because they realise the purpose of the product or brand originally.
If we take that principle to a bigger example such as Europe... Politicians have forgotten about who their voters are, they just see them as numbers. European politicians need to swap around! They need to experience different consumers and voters in different countries and get a sense of... for example, "...how does this Greek voter live? why is this individual against paying their taxes? how does the British person live?..." Suddenly they will actually come back to the roots of what democracy is all about, why Europe was originally created, and what we must stand for in the future. If everyone, in theory, was able to do this... suddenly you would see a much more united Europe as there would be mutual understanding of where we are going to go, how, and.. most importantly why.
Q: Whether in commercial, not‐for‐profit or other contexts, to what extent does society influence brands?
[Prof. P. Kotler] Society is influenced by brands and society also influences brands. In the first case, most consumers face many brands before making a choice. Every car that they might buy is a known brand. And customers have an image of each brand. Each company strives to build a specific brand image in the minds of target customers. However, the customer is influenced not only by the company’s brand messaging but by their other experiences and acquaintances. I might think highly of a Jaguar automobile but a friend might tell me that his Jaguar is in the garage most of the time being fixed. In this new age of digital communication, the brand is highly influenced by society through word-of-mouth, independent rankings found on the Internet (such as J.D. Powers rankings of cars), You Tube, and so on. I would go so far as to say that the image that I have of a product is more influenced by factors not controlled by the brand owning company. Just walking into the dealer, meeting the salesperson, and trying to negotiate may have more influence than any brand message prepared by the company to be viewed on the TV set.
Q: What is the political and social importance of brand?
[Prof P. Kotler] Everything can be seen as a brand. The Democrats and Republicans are brands. The two political Republicans fighting for the nomination – Romney and Gingrich – are brands. President Obama is a brand. Capitalism is a brand that delivers in our mind an entirely different picture than Communism. Christianity is a different brand than Islam. Each brand has its major advocates who seek to win believers and disciples. Each is trying to project a certain image and expand, protect and maintain that image.
Q: What are your views on the nature 'country' or 'region' as a brand? what are the implications?
[Prof P. Kotler] Countries, regions, and cities are all brands. I wrote Marketing Places: Attracting Investment, Industry, and Tourism to Cities, States, and Nations, and I take the point of view that a place should not only have character but aspirations as to how they want to be seen. Singapore wants to be seen as a financial capital and a medical capital of Asia. Sarasota, Florida would like to be seen not only as an excellent resort area with beaches and tennis and golf but also as an outstanding culture city with opera, ballet, symphony and excellent educational facilities. Places have to ask: “What is our brand?” “Are we satisfied being seen that way?” “Do we want to rebrand ourselves?” Chicago did a good job rebranding itself as a cosmopolitan city even though shades of Al Capone and gangsterism still operate in its image mix.
Q: What are your views on how brands relate to the human characteristic of tribalism?
[Martin Lindstrom] Tribalism is the essence of how we, as consumers, are insecure.
Just an hour ago, I was having lunch. Here we are, three individuals sitting around a table. I'm deciding what I would like to order from my menu card, as are the others. I ask everyone (including myself) to write down what they would like to order.. then we order. Half way through, one guy says, "I'm going to change my mind..." then another says, "I'm going to change mine too!"... What changed our minds? was it because the item was in his menu but not mine? no... was it because I can't read? no... it was because they became insecure in their choice somehow...
People are tribes, and are interlinked- this is incredibly important. In particular, the more we are under pressure and in crisis... the more we try to find a tribe we can belong to. This gives us a sense of safety in a world where everything is insecure. This is why the number of rituals executed per person in the UK has gone up 25% over the last five years. When you execute a ritual, you form a safe frame around you. Within that space, you execute something that makes you feel space... you knock on wood or you do certain other rituals where you create something which makes you think, "..at least I can relate to this..."
Tribes are exactly the same. The more we are under pressure through financial problems, divorce, wars, the bad stuff we see on television and the internet... the more tribes we will create, and the more ritual we will execute.
Q: How has our understanding of branding evolved in the past decade, and what do the next twenty years hold?
[Prof P. Kotler] Firstly, branding has moved from being simply the choice of a name and logo to becoming a means by which the company defines itself and distributes this definition to its target customers and its stakeholders through its messaging, products, and services. Secondly, marketers have improved their ability to measure the value of a brand (brand valuation) and the standing of a brand (brand equity). Besides using “awareness” and “favourability” to measure the standing of a brand, now we are adding “momentum,” a quality of having energetic forward movement such as Apple and some other companies have. Thirdly, companies are increasingly adopting corporate social responsibility to humanize their brand, to show that they care for more than just making money. Some companies such as Patagonia and Timberland has built social responsibility into their DNA and might be viewed more as social enterprises and not just standard businesses.
[Martin Lindstrom] It's evolved from a situation where a brand would typically be a product or a logo with some colours on. That's what a brand was defined as a decade and more ago. Over the past ten years, our understanding has changed to encompass the fact that a brand is everything, and everything can be branded. That includes individual people!
In 2003, I wrote a book called "Brand Child". One of my predictions was that in the future something unusual would happen... there would suddenly be a phenomenon appearing on the internet that would mean that every young kid would like to have a page or two which would be their own personal brand. If they did not have this, they would be disconnected from 'life' and would not be able to survive in that social environment. That was a prediction in 2003, and then Facebook appeared two years later!
My prediction is very simple. We will all become very aware of what we stand for and how we communicate it. We will build up our own brands of self across different channels, and align our messages. That's what we're starting to get now.
In the future, everyone will start to be aware that they need their own marketing plan. They may not call it that... In the old-days, when you looked for a job, the first thing you would do is write your cv. In the future, you will write your own marketing plan. This will be a plan for how you reach out to the right people, across the right networks, what your message will be, and how you will be perceived by different people. This process will start with younger and younger people. You may even be twelve years of age when this starts. We... with Facebook and the like, are locking people's identities in from the day they are born. This means you can't change your past. If you happen to be a person who, until the age of 18 goes totally against corporations and goes out on demonstrations etc... when you leave college to try and get a job in the corporate world? you simply will not be able to do it. Your identity and your history will be locked into your online space, and you will not be able to change your past. More and more kids will become aware of what image they want to convey to the rest of the world and start to systematically sort that in such a way that they can separate the reality of their lives with what they want the 'real' virtual world to see.
This is something we never had to think about before. Everyone is saying and thinking what they want to do online, and not thinking about the consequences. The next generation will start to think... that means we'll start to see a whole new phenomenon where people have, effectively, split personalities between the 'real' self and the self they want to market to the outside world.
Q: To what extent do you think our own individuality is a brand?
[Martin Lindstrom] I think it's very much a brand if you're under 20 years of age... in that age group, you are very conscious about what friends you are accepting into your network... and are more often deleting friends because they don't fit your platform. You will be more conscious about what photos you share and even who you are with on those photos. This will get even more apparent. As you get older, you spend more time exploring this- rather than being too conscious about the image you are sending out.
I don't think there is any great social implication, but it does make people become more artificial. It makes people more afraid of letting go- and makes people always think about the moment and the context of their engagements. I really think that can manipulate people to create an image around them which is very fake, nothing to do with reality- but to do with their future perceived image, and how that will affect their prospects.
Q: How do you feel advances in technology and globalisation have influenced branding?
[Prof P. Kotler] Globalisation describes the fact that the world is more interconnected in production, trade and communication than ever before. A customer anywhere in the world is likely to find his clothes made in China, his ties made in Italy, his shoes made in Brazil, and his cars made in Japan. Each country of origin carries an image of quality and performance. A German made car is much preferred to a Russian made car; an Italian made suit carries a stronger image than a Greek made suit. Certain global brands carry a special cache: Coca Cola, Apple Computer, McDonalds. Often the competition is between megabrands: Coca Cola vs. Pepsi Cola, and Toyota vs. Ford.
On Technology, the old marketing consisted of a company spending large amounts on advertising and sales force to shape customer preferences. Persons were glued to their TV sets and saw commercial messages every 15 minutes. Aside from occasionally asking a friend about a particular product, they hardly had any way to know about a product’s standing. Along comes social media – the Internet, Google, Facebook, My Space, Twitter, Linked in, blogs – and suddenly people can learn about a product or company so much more. Before buying a new car, they can look up hundreds of reports and ratings on Google, they can go on blogs, they can solicit friend’s opinions on Facebook—all of these carrying more weight in their decision making than the company’s advertising. The availability of social media has also given individuals the means to market themselves, to become a better known brand. Today anyone can become a blogger, a publisher, a reviewer, a contributor.
[Martin Lindstrom] Branding has become more approachable from a consumers point of view. Suddenly the consumer can communicate with a brand in a way they could never do before- they can tear it down or build it up in a matter of minutes. They no longer feel left on the sidelines, and feel they have a voice.
That's opened up a huge opportunity for brands. They can let consumers do the research and the marketing for themselves! Very few companies dare to let go and let that happen. The reason? the legal and marketing departments of companies are petrified of this. Why? they need to justify their jobs....
The reality is, the brands which are born and raised with the voice of the consumer are much more solid, much more powerful, and grow much faster than anyone else. The analogy is how one must get through that cold patch of water before getting to the warmer sea. It will be at least another five years before companies realise this- at the moment, firms are too conservative to handle this.
Globalisation has an influence in the way that you are no longer, in our world, talking about releasing a brand in the local area and hoping for the best. From day one you are forced to think about a global approach. You have to think across religions, cultures, and other dimensions you would never have thought about in the past. That means that no local brands are ever born, every brand born is global from day one. This means you will get a very different looking brand, but you will see products, services and brands which are extreme niche. Brands which would never have survived before because their markets were too small, but can now find five consumers in Japan, two in China, three in Russia and so forth for their extraordinarily specialised product.
Q: Do you think the world of intellectual property is compatible with how brands are changing?
[Martin Lindstrom] I think IP is going to die. I don't think you can maintain it.
In the old days, when you invented some IP, you could go down to your local patent or trademark office... register it in that country... and that would be a central place where that happened. Now? you have the entire world.... Maybe you have an idea in one country, but because the whole world is not aligned... another person in China could come up with the same idea 5 minutes later (either on his own accord, or because he stole it).... he can then run to his local patent office and register it at the same time. So you will have two people in the world owning the same patent. You can also have a situation where things are spreading so quickly, that brands can only last for a few days... as a fad.. but those few days generate the revenues of a lifetime!
The internet is throwing the whole nature of IP out... That's what you saw with the recent demonstrations of Google and Wikipedia against SOPA. You simply can't protect anything in the future.
The consequence will be an increase in locked websites where you become a member because if you really want to have good content- you have to protect yourself or earn money.... a lot of brands will struggle to develop new things, and you will see a lot more brands stealing from each other. It will be a wild-west for a while....
We will have a situation where the internet is so locked-in that you can go back and do IP registrations in the same way as you do with .com domain names. It's safe to say that every new person thinking about a new brand name will go on the net and... in a split second... realise if someone has taken that name or not... if it's taken? they'll not go down that path. That simplicity of global registration will happen in 5-10 years worldwide in the intellectual and copyright space due to the complexity. Once that happens, we will come back to the situation we had ten years ago, but until then? it will be a mess!
On Specific Areas of Branding Research
Q: To what extent are our senses involved with our engagement with brands and hence decision making?
[Martin Lindstrom] We, as human beings, are constantly sending so many signals. When you and I meet, if I give you a limp handshake, you will immediately evaluate me and conclude I am a wimp! As brand owners, we are not thinking about signals in the same way.. for example, if we have a flimsy package design, or if the sound is really strange... or if I go to a website and the page takes forever to download and my consumer concludes my service is slow... and so on. The sensory aspect has a huge influence on how we perceive things around us and brands have to take this into account. This isn't just an idle theory, our research showed it to be true.
Today 67% of all British companies are using a sensory strategy. We now know that the more senses I appeal to... not only do I more strongly believe in the brand and the message... but the more I feel emotionally engaged and more likely to buy. If you appeal to one sense such as sight, which is most used in our world (which by the way is used by 87% of companies in isolation, meaning 13% are left to use all four other sense) then... if I double or triple the sense and add touch and sound, for example, I doubly my effect with the brand. These are not just hypothetical numbers... these are based on three individual studies using neuroscience (fMri) and another quantitative study involving interviews with 26,000 people over 14 countries. This was also combined with concrete results from companies who have built brands using sensory dimensions.
It's safe to say that these aspects have enormous influence. We're just reaching the beginning of understanding how, in the future, our senses will become more and more stimulated as we buy certain products or brands.
Q: What is the relationship of our conscious and sub-conscious states to our engagement with brands?
[Martin Lindstrom] It's safe to say that we're still struggling to understand the balance between these two worlds. I estimate that 85% of everything we do every day, is irrational (emotional)... thus only 15% is rational. I estimate that very few decisions we make are purely rational. Typically, we will commit ourselves to something as being rational if we have done it over a long period of time and it therefore becomes a habit. What we're really saying to ourselves is, "I do this because I always have..." In reality that's deeply irrational. There's very few decisions you can make with a totally rational mind. Just think about the volatility every day in the stock market!
I think it's very safe to say that we haven't the 'link'. We know now the sub-conscious has a huge influence and that's why the whole world of non-conscious research is booming as it is. We know that most of the stuff we try to predict such as elections, product sales and so on simply don't behave as we would expect, and so non-conscious research is trying to develop insights into those challenges.
Q: To what extent do you feel that "sex sells" ?
[Martin Lindstrom] I've certainly adjusted my attitude towards this over the past couple of years. My conclusion today is that sex sells enormously so long as it is related to the product category we are working with. If you are selling clothing or cosmetics, sex is by far the main driver of why your consumer buys your products. This comes down to self-esteem which, in turn, comes back to a constant search for a partner.
There are a couple of factors which influence us in a significant way- meaning that even though we know that what we're seeing isn't true, we engage anyway. One of those factors is sex. The marketers promote the fact that by using their product you may become more good-looking or whatever... we know it's not true... but we buy it anyway. It's the same with the case of celebrity endorsements. We know that the person is not really using that coffee, lipstick or perfume, but we continue to buy... why? because somewhere we hope it is actually true! It is a hard-wired tendency we have, and somehow we want to believe in it.
The more we are insecure and under-pressure... the more the role of celebrities and sex seems to increase. These phenomenon give us points to relate to, giving a boost of insight to help us get through life. It's a bit of a sad story!
Q: To what extent do marketers exploit our human tendencies toward addiction?
[Martin Lindstrom] There are cases where this goes too far, and many companies have forgotten the ethics which society must stand for.
The world is so connected, and the consumer has become so powerful. Just think about Egypt and the Middle East and how people can turn against a whole government. That is likely to happen for brands soon.... we'll have a concept akin to Wikileaks for brands. When that happens, if companies have not cleaned up their house, and if their unethical behaviours are discovered? there is no point of return, they will simply die. I don't think companies have really thought about those consequences.
Today, there is a lot of stuff going on behind the scenes... Some of those elements are where they are going too far... for example, some companies infuse addictive chemicals into lip-balm or use tricks like giving away computer games to children free of charge in which, as they play, questions appear like, "...what car does your dad drive?.... what time does your mum come home from work?" and as they fill out these questions, they get more points to feed the characters in their games!
I am taking a stand against these methodologies as I don't think anyone is. It's an unspoken area of branding where we have gone too far.
Q: Do you think branding and marketing experts use psychological traps?
[Martin Lindstrom] I think it's fair to say that there are a lot of tricks going on... some of these, nobody has thought about in a deep-psychology way, and some of them have been very well thought through. The more we see companies in crisis, the more we will also witness them going too far, or even further, to make their commercial message come through- as it's the only way they can survive.
Companies may have a particular view of where they stand, and individuals within the organisation- who may be incentivised with bonuses or other schemes- can develop quite a different ethical standpoint to their firm. One example of this is Microsoft when they came out with the 'super-cookie'. This is an advanced version of the browser cookie, but has a few differences. It's impossible to find on your computer, and it resets all your old cookies! If you have thrown out old cookies, it will recover the data and therefore knows all the websites you've been visiting, and then shares that information with third party advertisers. This was released by Microsoft but there was a problem... Microsoft was unaware of it! It was a group of people with a specific bonus and specific structure within the company who released it to meet a specific goal they had. Their ethical stand-point was not in line with other people, or the company.
I think individuals must ask themselves what their own ethical guidelines are. If you ask any advertising agency right now what their ethical guidelines are... there would be total silence... they would have no clue. They are the people who need to stand-up and have guidelines, the ethical stance has to start from there.
The real extreme of this is privacy. It may sound like a boring word... but it's incredibly fascinating and quite scary when you think about the fact that you are tracked 129,000 times a year when you use your iPhone.... This information is sold to third party advertisers. In the future there will be a map of your entire behaviour, so accurate and so detailed that you cannot escape from it. This type of data, which may be obtained by one organisation, and sold to many third parties- means that some consumers are put into a track they simply cannot get out of.... and believe me, that will affect a lot of people in the world.
Germany has taken a stand on this. The tracking features of the iPhone were discovered in Germany and banned there, the rest of the world has not taken a stand on it!
Q: Do you think we are aware of the size of our digital footprints?
[Martin Lindstrom] We're totally unaware of the footprints or their consequences!
6% of all babies, before they're born, already have a digital footprint because their parents start to upload their images and so on. That means, even before you're born, you have an identity.
From now on, everything you do on your phone, every move you make... is mapped out. There's no way you can do anything by resetting your life.... That day you were so drunk will haunt you for the next twenty years because that photo went online!
I don't think anyone is thinking about the consequences of all this. You see the consequences of this impacting shopping behaviours. There are extreme examples of this.... The numbers of friends you have, for example, can determine how companies target you. If you are very popular, the digital shopping trolley (which is already a reality in the United States) will change the prices on the shelf! If you are very popular, the prices will be lower because they want you to sample products first... they are using you as a spokesperson without you being aware of it. This sounds like a bad future scenario, but it is.. in fact... a reality.
Q: To what extent are marketers and brand professionals targeting children?
[Martin Lindstrom] It's fair to say that every marketing professional, if you ask them, will deny targeting children. Even if you ask Disney, in their guidelines they say they are not allowed to target children in their communications. It's up to you to decide whether you think that's true or not...
I think the reality is that you cannot go out and say, "we don't want to communicate to children.." What you can do, however, is create much softer guidelines which are more emotionally engaging. One guideline, for example, is to say to management, "Don't do to kids, what you wouldn't do to your own children..." That way, you put the individual in the shoes of the consumer.... and if they feel comfortable about selling drugs to children? well.. that's their problem, but I doubt a person like that would become a serious decision maker.
Ultimately, you cannot ban communication to children. Sweden is one of the most highly regulated countries in the world for advertising, and they placed a ban on all communications to children under the age of 15. Sweden is also the country where there is most peer-pressure amongst kids to wear the right brands, which is really rather ironic. Bans cannot solve it... it must be self-regulated, and I'm sure that we'll see a lot of companies falling over the line as they simply don't know how to handle the issue.
Q: Do you think branding and marketing professionals exploit extreme events such as natural disasters, conflicts and so on?
[Prof P. Kotler] Macro-events, such as the Japanese tsunami, the Great Depression, and the Texas drought become well-known terms that keep coming up in conversations. This doesn’t quite make them brands. I like to think that a name becomes a brand when there is intention to market it. Sony is a brand because the company engages in brand building. The Japanese tsunami is only a brand if a company describes it in dramatic terms as one of the worst human catastrophes and positions donors as heroes for giving money to help the survivors get back to normal living. In other words, natural events are not produced by marketers: marketers produce offerings. But raising money to alleviate suffering caused by a natural event can lead to the use of branding theory to solicit more financial support.
[Martin Lindstrom] I think some of them do. Some of them are doing it in a nice way, and some in a less appealing way.
A lot of people in the insurance industry, in the US... when there is a traffic accident or natural disaster which you can insure yourself against.... have ads on stand-by at the paper which they insert the very second that disaster strikes. You could say that's exploiting things...
In a better context, companies like Proctor & Gamble sponsor different types of weather events. For example, when you had the flooding in New Orleans as a result of hurricane Katrina, they rolled out a team to give people access to free laundry services, and gave out free Duracell batteries (a brand which they own). Are they exploiting an incident? in theory yes, but they are doing it in a better way- at least they are helping people who have a serious need for it.
I think we will probably see this more in the future, as it is a way to stand-out. A lot of companies will struggle with how to do it, as it's a fine line between exploiting and helping.
Our world is in a constant state of flux. Thom Braun describes how, "... any 'thing', at any stage in history, is not a stable entity. It is merely something in transition. Heraclitus's best-known metaphor for describing this was the flame. A flame may be a 'thing' - but, in an important sense, it is not the same thing from one moment to another. When we look at a flame, we are witnessing a process. ..This may seem obvious. But at another level, it is not. Much of the time we think and talk about our world, and the 'things' in it, as if they were permanent - or at least things which are stable for periods of time. How else could we measure things, make plans, have expectations, live from one day to the next - unless there were a guaranteed level of stability in the world?". Brands are the cognitive entities that give society this level of stability. They are conceptual entities which provide the emotive answers we need to make sense of (quite literally) everything in our environment. While this may explain 'what' a brand is in relation to society, it does not explain the 'why'.
In their 2010 book 'Storytelling: Branding in Practice' the authors note how, "...in days of old when we were still hunters and gatherers, and our social lives took place around the glow of a campfire, women prepared the evening meal while their men-folk swapped stories of the day's hunt. It was here, too, that the tribe's elders handed down the myths and legends surrounding their gods and ancestors and where knowledge and experience was exchanged and passed along the generations. These stories helped shape the identity of the tribe, gave it values and boundaries, and helped establish its reputation among rivalling tribes. It was storytelling in its purest form. In many ways the modern company resembles these tribes of old: the stories that circulate in and around the organisation paint a picture of the company's culture and values, heroes and enemies, good points and bad, both towards employees and customers. By sharing our stories, we define 'who we are' and 'what we stand for'. And just like the elders of the tribes of old, the strong leaders of today's companies distinguish themselves by being good storytellers; voices that employees listen to, are inspired by and respect. Indeed, storytelling is an integral part of what distinguishes us as human beings. The esteemed writer and movie director, Paul Auster, once said that telling stories is the only way we can create meaning in our lives and make sense of the world. We need them in order to understand ourselves and communicate who we are. And by sharing stories of our experiences, we can better understand the conflicts of our daily lives and find explanations for how we fit into this world. As human beings, stories have always formed a crucial part of our ongoing evolution. In a Western market economy increasingly driven by emotions and the pursuit of the 'the good life', our need for them seems to get stronger and stronger. It is, therefore, no coincidence that an ancient tradition like storytelling should appear in a new form-as a tool for brand building..."
The sociological observations the authors make here get to the bottom of brands as function in human culture. They are manifestations of the stories which define and explain our existence. They are emotive, powerful and paradoxically unique to the individual yet universal in nature. Brands are in our minds, they are a part of who we are, rather than an object apart from us.
Branding is everything, and everything is a brand.
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