I admit this sounds forsaken. But let me take you through three
arguments that converge to the fact that brand building, in the classical sense,
is dead or soon going to be.
1.
Top
Brands: Look at the top 100 brands of the world today. (http://www.interbrand.com/en/best-global-brands/2013/top-100-list-view.aspx)
Besides technology brands, how many of these brands are less than 10-15 years
old? Very few. It will therefore not be incorrect to imply that brands build
over time because many people shape it single mindedly over years. Brand
building needs serious investments and patience. In fact, many of these brands
in the list were brands before the
entire science of branding took shape. Why don’t we see new non-technology
brands?
2.
CEO Tenure: The average tenure of Fortune 500 CEOs is down and some chief executives
last fewer than three years. (http://articles.economictimes.indiatimes.com/2013-12-20/news/45378705_1_ceos-management-guru-ram-charan-business-models)
(http://faculty.chicagobooth.edu/steven.kaplan/research/km.pdf)
They have to give results quick. They are therefore not interested in investments
that take a while to give dividends such as brand building. Their entire focus
is on profitability. New age CEOs will therefore not care too much on brand
building.
3.
Majority
stakes are on decline. This means that there are fewer larger companies
that are owned by individual or families. Increasingly, majority owners are
selling their shares to investors and the later have limited attachment to the brand.
They do not care so much about legacy. Most are there to make a quick buck.
Hence shareholders patience will be waning in long term investments such as
brand building.
If the above trends are largely true, my guess is that less
and less time and money will get into brand investment. For example, investments
like Coke Studio will become increasingly rare. That will be poignant.
