What if all your customers decide not to buy?

Andy Warhol Polaroid

There are three levels of competition between brands:
1) Brand compete without a product and without content – products are not competitive because there is no need for them to be;
2) Brand compete with product only and without content – products are highly competitive but without added values by content;
3) Brand compete with both product and content – products are highly competitive with added values by content.

When brands compete without products and content they use regulation, sales power, and other means to control their market position. In such competition brand equity is low and brands do not depend much on the customer decision. Companies must strive to maintain this level of competition as long as possible because they are not able to offer competitive values in other levels of competition.

When products and content participate in brand competition, customers accept values from the brand. The fact that customers accept values is important and means that customers are the ones making a decision what is a value, what is valuable for them. Control is in the hands of the customer, and not the brand managers. Brand managers can only try their best that values offered by products and content are accepted while customers are open to competitive brands and their decision is unpredictable.

At some moment customers can decide not to accept the brand values anymore. In that case the brand looses brand equity, products are not sold, and revenue drops. Customers can decide to do so when competitors offer better values. These values can be hard, offered by products mostly, and soft, offered by content mostly. Brand can be replaced by a new technology or can loose its cool because of the content trend.

This is obviously the scariest moment for a company and to avoid it product technology must be constantly updated and content must follow trends while it maintains the core brand values. Strategy to manage this risk is to base the mother brand on soft values only. This allowed Polaroid to make a small comeback long after their technology become obsolete.

Brands that compete without products and content can appear to be safer but they usually have shorter lives than those which compete with products and content. Eventually competitive products and content enter their markets and disrupt them.

Written by: Nikola Tosic
Publishing date: 8 Jan 2018