We’ve stopped what we are doing and creating your personalized BrandZ™ report, which will appear in your inbox soon.


Purpose will guide successful brands and help inspire workforce excellence

Functional and emotional benefits alone are insufficient 

I remember writing the following sentence in the early 90s, as part of a brand strategy summary when I was at Unilever: “In the future, customers will want to know what the brand thinks about child labor.”

As you might expect, this idea didn’t go over well. But this finding, which our research team uncovered almost 25 years ago, has been validated with time, and it indicates where brands are headed.

What happened in the intervening years? Technology. It’s created much better- informed consumers, everywhere. In the old days, it was standard practice to charge one price for coffee creamer in Holland and fifty percent more in Belgium, just half an hour away. That’s impossible today.

In the old days, we marketers would want to customize products to people’s specific needs. That was impossible, so we’d do market research and develop an assortment strategy, a compromise at the intersection between the product range people would have liked, and the amount of variety that was profitable to produce.

Today, technology enables us to personalize more completely - sometimes in the product, but also in many other ways that communicate with the consumer. If we can’t completely personalize a tub of yogurt, for example, maybe we can provide instructions that pertain to the customer’s health or exercise regime.

But technology has even broader implications that deeply impact Brand Value propositions. Technology enables a level of transparency that makes brand behavior – good and bad – immediately known to customers and other stakeholders. They want to know what is happening in the supply chain and how brands think – and act – about topics like child labor, women’s pay equality or sustainability.

And because technology shortens lead times and enables high-quality products to be manufactured and delivered quickly, products can be easily imitated and ultimately commoditized. A well-managed private label can rapidly erode the distinctiveness of a national or global brand.

The new value proposition

These factors force brands to think through their value propositions. What enables a brand to charge a bit more? It used to be quality. We used to say it was all about functional benefits. That’s still true for some products but now it's more often emotional benefits that help distinguish brands from their competitors. If a brand doesn’t have emotional benefits in addition to the functional, it will lose preference over time.

When product distinction is minimal, people will select the brand that stands for something they believe is worth supporting. That’s where we come full circle, because I believe that most successful brands come from companies that were created to make a positive difference in the world. The motivation wasn’t to make a lot of money, but to improve someone’s life, to make a difference.

Purpose will be the acid test for the successful brands of the future. If you have a purpose, you know why you’re in business,

and it guides everything you do. You will be successful, because you will be able to talk about it. Your purpose will be true; it will also inspire your workforce. Future winners will need to win with employees. That’s where all the added value comes from, and as in the past, purposeful brands stand for something bigger than making money.

This need for purposefulness applies to all brands, even the most valuable brand in the BrandZTM Global ranking. No one can argue that Apple doesn’t have functional excellence and great emotional appeal. But Apple has an opportunity to build not just functional and emotional benefits, but also purposeful benefits.

Apple could have leveraged its “Think Different” slogan to better the rest of society. It could have invested more of its profits into improving America. Apple would be known as a brand that made America a better place. Had Apple also advanced a purposeful benefit, it would not only be successful against competition but almost immune from it.

This view is different from how businesses have operated and may cut against organizational structures. One could argue that it’s too optimistic or skeptically ask: So how does this change happen? My answer is that not only will this change happen over time, but it will happen inevitably, for two reasons.

First, bad behavior is transparent, and we as consumers will no longer tolerate it. Second, many of today’s young people - tomorrow’s business leaders and analysts
- hold different values. They believe in a triple bottom line consisting of economic growth, environmental responsibility, and social progress.

One thing won’t change. You’ll still need to start with great products. However functional benefits, or emotional benefits, or purposeful benefits alone will not build brands. Building sustainable Brand Value is an and-and-and proposition.