Dr. Niels Neudecker
Head of Global Connect Centre
Digitization is disruptive. Industries and business models are changing. Brand management and marketing are being challenged. Right? Absolutely. But it is increasingly common to hear that these changes are also disrupting the concept of a brand (consumers are now “prosumers” or “new consumers“), and that “brand“ will soon be dead. Right? Wrong!
What all these discussions have overlooked is that the fundamental rules of human behavior, which have developed over thousands of years throughout the world in a similar, often identical form, continue to apply.
Social psychology is the science that has placed this subject at the center of its research and teaching. In order for people to meet the demands of everyday life, stressful situations, and face new experiences, they display classic patterns of behavior. People need relief; people need guidance. People need rewards and people want to avoid cognitive dissonance. They do not want to admit they made the wrong decision. The more complex the challenge, the more complex the "world", the more important are these mechanisms that people deploy to find solutions. As the digital information flow accelerates, humans seek to master and even reduce this complexity, using those same behavior mechanisms they have always used – though perhaps a little faster.
In this context, brands have a clear function, and in fact they are more important than ever before. Every day, people have to make a variety of buying decisions – and brand decisions. They also need to both implicitly and explicitly defend these decisions to avoid cognitive dissonance. In the majority of cases, these buying decisions are made unconsciously (using „System One“ thinking, as described by psychologist Daniel Kahneman). But before any unconscious decision is made, the brain draws on its many experiences and bank of information. No system one decision takes place without a comprehensive cultural background, and that includes knowledge and experience of brands.
Brands can provide exactly what people need to be able to deal with the complexity of daily life: relief and orientation, security, perhaps reward, and the avoidance of cognitive dissonance.
The role of the brand will, therefore, increase, without a doubt. Brand management and marketing will of course change. They can – no, they must – recognize, integrate and orchestrate the new possibilities available, and opportunities around virtual reality are just at the beginning. Budget allocation will change, but the objective of brand builders will not: their challenge, to nurture strong brands and to use these strong brands to help consumers make and justify their decisions. If they succeed at this, then some of the other goals of marketing – customer acquisition, loyalty, sales and profitability – will naturally follow.