Consumers have changed a lot. Years ago, in a shopping cart we could find oranges, melons, bread or milk. Today, there are ‘Torres’ oranges, ‘Bollo’ melons or ‘Panic’ bread in Barcelona and Madrid. In this space, I invite you to reflect on how our purchasing habits have changed and how the concept of brands and the management that companies make of them have evolved in parallel.
As we have all been able to confirm, the increase in product categories, the proliferation of brands and the media make the context in which we make consumption and purchase decisions into something more difficult. Far away is that straight path that narrowed down as we advanced in our decision process, now it is rather a road provided with roundabouts that offer multiple possibilities of entering and leaving, and allow to interrupt and even extend that decision process at any time.
Between roundabout and roundabout, thanks to advertising, social networks, conversations with friends and family and through our experiences we are forging our own opinions on brands. In parallel, consumers are increasingly demanding and we no longer settle for brands that simply provide functional benefits, we hope they contribute something more.
This is what has been called ‘brands with a soul’, brands with ‘soul’ in reference to the musical style born during the 50s among the black community of the United States and characterised by its emotionality and vocal spontaneity. Brands with a soul are those that are able to connect, to form emotional bonds with well-informed customers who share opinions and observe how brands contribute to society.
Are brands making strategic use of their social contribution?
The brands are subject to a lot of pressure: governments, activists and the media monitor the social consequences of their activity. The response of most companies has not been strategic or operational, but cosmetic. The reality is that companies think about their CSR (Corporate Social Responsibility) in a generic way and totally disconnected from their strategy. They do not follow the methodologies they use in their business plans for the development of their brands and many understand it as a philanthropic concept.
One of the underlying principles under the concept of social responsibility is the concept of sustainability. Gro Harlem Brundtland, Prime Minister of Norway and Director General of the World Health Organization during the 1990s, proposes one of the most widely accepted definitions of sustainability “Meeting the needs of the present without compromising the ability of future generations to meet their needs. own needs. ”
The principle of sustainability aims to guide companies to find a balance between economic, social and environmental benefits and calls on companies to operate in a way that ensures long-term benefits, avoiding short-term behaviors that are detrimental of society or harm the environment.
Coca Cola, for example, has launched a series of initiatives such as smart refrigerators that have managed to save up to 26% of energy, or an improvement plan that reduces by 42% the solid waste generated since 2004 in the production of each liter of drink. No doubt this type of business decisions make a lot of sense, even if we do not take into account the environmental impact. If we think of brands such as Patagonia or Body Shop that represent the ‘millennial’ generation of sustainability, and that have distinguished themselves by their investment and long-term policies, even these companies find it difficult to measure the social impact and even more the business benefit. resulting.
This fact, not being able to measure the benefits resulting from sustainable investments, makes the CSR programs something changeable that is changing according to the business cycles and the top management of the moment, a ‘medley’ of disconnected activities. As a consequence of this dilution and fragmentation, the power that companies have to contribute to society is considerably reduced, and the capacity for real differentiation of brands and their power to create competitive advantages is also lost.
Can brands build a strategic and competitive social dimension?
As Porter and Kramer suggest in their article “Company and Society” (2006), in order to answer this question, it is worthwhile to first review the relationship between company and society and then to address how brands can strategically combine competitive advantage. and social contribution.
A successful company needs a healthy society and vice versa. A healthy society allows generating a growing demand for products and services, and at the same time needs successful companies because of their capacity to generate jobs, wealth and innovation. The starting point for the dual creation of value (value for brands and value for society) is the recognition that a company cannot solve all the problems that a society has. Companies must therefore build their own social roadmap and prioritize those problems that have a closer link with the main activity of their brands.
A real case to understand these ideas, let’s see how an environmental problem, the problem of CO2 emissions, can affect very differently three companies and their corresponding brands. For CaixaBank, for example, it is a generic social cause, with little connection to its banking business and its value chain; but in the case of MRW, a parcel and transport company the problem of emissions can have a negative impact on its value chain. For the automotive company Toyota this same emissions problem is directly linked to its main activity.
Customers recognize the effort and positive impact that Toyota’s hybrid technology has had on reducing CO2 emissions, and in turn on energy efficiency and lower fuel consumption. The marks with soul are those that, like Toyota, are able to see in the social problems opportunities to innovate and differentiate themselves. These are brands that use their resources and capacities to incorporate the social dimension in their value propositions and make the social dimension the essence of their strategy.
by Lourdes Pérez, TBS Barcelona Marketing professor.
Text initially published on ElPublicista.