Brand attack

A recent post in Harvard Univesity's HBR Blog notes how three long held concepts in marketing are becoming less relevant.

Brand names, especially those that were reputable,  have almost always translated into profits for their owners as they were indicative of quality. That is no longer as relevant per the HBR article as consumers now have alternative ways of of assessing "product quality using better sources of information such as reviews from other users, expert opinion, or information from people they know on social media." The authors cite two instances where the foregoing has played out in the marketplace: Roku for set top boxes and Acer for tablets.

Falling though not exactly like ninepins is the notion of loyalty as "more and more consumers think about their relationships with companies as an open marriage. Loyalty doesn’t benefit the customer as much as it did in the past" assert the authors. Buttressing that claim is a Deloitte travel study from a year ago that noted that almost half of all hotel guests do not stay with the same hotel brand. Another example of fading loyalty is the "disloyalty card" launched by independent coffee shops in the Washington DC metro area in a bid to counter Starbucks' giant footprint.

Another marketing sacred cow that appears to be falling by the wayside is positioning where "marketers still believe that they can drive product perceptions based on the way they present their products relative to other options."   The idea of placing output along the product or service continuum in the marketplace being jettisoned  "as consumers increasingly rely on the opinions of others."

A more academic study at Harvard in a more than tangentially relevant area goes along with the gradual decline in brand value in the market place.  The authors of this study note how consumers garner "status and competence from giving out signals of nonconformity".  The authors of the study offer an example where shoppers at a luxury boutique enter attired in gym clothes leading to perception of "status and competence" with the subtext being a frontal attack on the underpinnings of brands: the prevalance of standards and conformance rather than the need for uniqueness that drives many consumers today.  It is a notion that likely is anathema to a lot of traditional hoteliers but one that will be more the norm than the exception before long.

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Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.