Brands on the Run

by on November 10, 2004 at 7:12 am in Economics | Permalink

The latest Wired has a very nice article by James Surowiecki, The decline of brands.  Jim argues that better consumer information has reduced the value of reputation.  Why go with the brand that has a good reputation (Tide, Sony, IBM etc.) if you can find an actual evaluation of quality on the web?
Tide_2

Better information transmission reduces the value of brands that have an objective quality but branding is unlikely to decline for products with subjective quality.  I don’t expect Coca-Cola to disappear anytime soon.  Indeed, as information about objective quality increases we can expect brands to try to position themselves in a subjective "lifestyle space" rather than in a measurable "attribute space."  It’s hard to compete with Coca-Cola when consumers are buying more than the taste.

Better information transmission also raises the profitability of product evaluators.  Roger Ebert has used the web to become a profitable brand.  And of course you already know the top-of-the-line brand for economic analysis.

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