Three Brand Conundrums in time of recession

Today, I read an article published by Don E. Schultz. He talks about three conundrums about brand when the time is bad.

Last year, the stock market plummeted with the fall of main financial firms such as Lehman Brothers, Washington Mutual and Wachovia. As the economy collapsed along with the stock market, many were sure that brand values fell down along with everything else. In fact, the Advertising Age published an article mentioning how "Top 100 Global Brands Hemorrhage $67 Billion in Value."

However, the questions rise from here. How do we actually measure brand values? or "What is brand value?" Shultz also asks the question in his article. Some say that brand value is created by customers and their minds and memories. On the other hand, as Advertising Age published, brand value might simply be how much it is to the investors.

Another question that rises in this hard time is that if brands really enable their owners to charge higher prices. Just from the recent outcomes, the answer is no. Simply put, Wal-Mart's brand value increased when they kept providing lower prices and put their brand emphasis on lower prices, while on the other hand, Coke and Microsoft's brand values dropped significantly charging premium prices for their products.

The last question is about consumer loyalty; does consumer loyalty have any effect in this hard time? Again, this question has two sides of answers. As in the case for Wal-Mart, people have been abandoning their higher priced brands and started to search for lower priced brands as their budget gets tighter whether it be in actual dollar amount or just their economic confidence.
So it seems like consumer loyalty is a thing of the past, now that people are switching over to other brands in search of cheaper products. However, there are still cases where brand loyalty is accounted for. One example is reusing moribund brand names and using their brand value and revitalizing customers who once were, or may be always have been, loyal to the brand. It shows that one way or the other some customers stay loyal to a brand, even after the brand is gone.


I thought that was an interesting way of looking at brand especially in the time of recession such as the one we are all going through together. I think the bottom line is that some of the traditional understandings of branding have to be rethought through in different situations including this recession.

Here is the link to the original article