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?

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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