Brands and Connectivity

I just attended a talk by Debbie Millman on branding. One idea that I found very interesting from the talk was discussion on the current wave of tribal branding since 2000. Ms. Millman made the point that in this wave of branding, a brand that builds/facilitates connectivity is likely to be successful. She enlisted statistics that show 1 in 3 households in America now consists of a single person, in contrast with only 1 in 10 households as a one-person household in 1950. As traditional communion places like the household downsizes to be a single’s cave, our need for connectivity as human beings has to be channeled through other places and other objects such as brands.

This association between brand and connectivity is very interesting and is consistent with the evolution of contemporary marketing. So I’d like to elaborate on this idea a little further. The marketing discipline is witnessing two interconnected trends: an increasing emphasis on building customer relationships (i.e., relationship marketing) and a perception change of consumers as objects/targets of marketing efforts to consumers as collaborators (see Vargo and Lusch 2004). Both of these are manifestations of connectivity and how marketing may play a role in building connectivity.

So to use some concrete examples to illustrate the concept, a brand can build or contribute to connectivity in two ways: physical or infrastructural connectivity; and psychological connectivity. Brands in the former category build infrastructure for people to connect with each other, such as T-Mobile, MySpace, and Facebook. These brands derive their value not necessarily from consumers’ emotional connection with the brands per se but rather from the value of relationships that are built on these infrastructures. For example, the popularity of a social networking website such as Facebook is dependent on the people that we as users can connect to through the website and how satisfying that connection experience is. Consumer collaboration dominates in this setting as a demonstration of connectivity.

Brands in the second category aim more toward establishing actual psychological connections between consumers and the brand and between consumers and consumers. While the connection between people is still essential to the connected nature of such brands, each individual’s connection with the brand is an essential ingredient to this type of connectivity. For example, Harley Davidson or Apple owners identify among themselves because of a mutual connection with the brand. In this type of situation, rather than functioning as an underlying platform for connectivity to occur, the brand becomes an indispensable bridge in the connection process. Relationship marketing and CRM become key strategies for enhancing connectivity in such cases.

It is possible for brands to crossover between categories. An example of crossover from psychological connectivity to infrastructural connectivity is the online communities that many CPG companies have established, such as Kraft community. Consumer interaction in those communities may no longer be brand-centric and may broaden beyond the brand to other realms of life. An example of crossover in the other direction is Second Life, where devotees who have been able to build meaningful relationships in the virtual world come to love SL as their virtual country, no less than the feeling of patriotism that we feel as citizens of a country. By crossing over or occupying both realms of connectivity, these brand names build a stronger hybrid form of connectivity that is valuable to today’s single-dominant world.

An “Intel Inside” Future of Branding

What I am about to say is inspired by the discussion from my MBA Internet marketing class. I was showing examples of RSS and XML technology, when a student named Natalie raised the question of what all this could mean to a business. The ensuing discussion concluded that the meaning of brand and marketing will change dramatically from what it is now now.

With semantic-based XML and RSS technologies, it is infinitely easier to pull together information on a particular topic from all over the Web into one central location. Websites such as Kayak.com have already demonstrated this concept by “researching” across a wide range of websites to find its users the best deal in travel. The news panel on the right side of this page is another illustration of the concept. All of this information aggregation and (re)classification means that existing information and services provided by known brand names (e.g., CNN, Business Week) can be shuffled and repackaged to create a new service shaped by its own creator, with or without any new content being added. The outcome is potential “generification” of brand names into mass components that consumers and resellers can mix and match to create their own “product”.

The best analogy of this business model in the offline world is that of a concierge or a tour guide. The concierge does not necessarily create a new scenery but rather put together existing events, worthwhile sights, and palatable local eateries into an unforgettable experience for the visitor. The value added is the knowledge the concierge has about what is available in the area and about what the visitor is looking for.

What this traditional business model shows is the ultimate focus on value creation and need satisfaction. Whoever can satisfy a consumer’s idiosyncratic needs better than everyone else will win the consumer’s heart. While this focus on value creation is nothing new to business, the next decade of generic services will make this even more important. What we will see is information/service aggregators collaborating and competing with each other by pulling together various mass components to create the best value for the user; and traditional brand names, on the other hand, will excel by providing quality components for these aggregators in an “Intel Inside” fashion.