Consumerism and Competition
The growing propensity to consume – a trend characteristic for almost all market economy countries once the post-war reconstruction process came to an end - led to fundamental, frantic transformations in consumers’ behaviour. They changed what was known as the seller’s market into a buyer’s one, thus documenting the trend towards what was to be defined by the end of the 1960s as “consumerism” (Buskirk and Rothe, 1970, p.61). In interpreting this concept the two authors start from the somewhat colloquial definition given by Peter Drucker (1969) who says that consumerism exists wherever and whenever the consumer looks upon the manufacturer as somebody who is interested but who really does not know what the consumers’ realities are. He regards the manufacturer as somebody who expects the consumer to be able to make distinctions, which the consumer is neither willing, nor able to make”.
The buyers’ market dominant position leads to growing competition among manufacturers/sellers, both in terms of prices and structure of their offers. Henceforth, in order to cope with competitive pressures the latter have to distinguish their goods or services from the others’. The most used marketing tool in this respect is the brand.
Brand and branding
Specialized literature abounds in definitions of the notion of “brand”. In defining it, most authors try to capture what they consider to be the most important functions of this marketing tool in promoting, consolidating and further developing the market position of a given good, service or company.
Kapferer (2008, p.13), one of the leading European personalities in the field, comes up with a simple but comprehensive definition, stating that a brand is a name with the power to influence the market, its power increasing as more people know it, are convinced by it and trust it. He goes on by summarizing the main functions of a brand for consumers, namely:
- Identification (easiness in being clearly seen, recognized)
- Practicality (certitude to save time and/or money)
- Guarantee (same quality whenever and wherever buying)
- Optimization (certitude of buying the best)
- Continuity (familiarity with the brand)
- Hedonistic (enchantment linked with attractiveness of brand)
- Ethical (responsible behaviour of brand versus society).
In light of the above, it can safely be said that the term “branding” is all about using brands for building and projecting a favourable image of a product, a service or a company so as the customers distinguish it from the competing ones. By nurturing closer consumer–brand relationships the branding activity enhances the brand loyalty (Fournier, 1998, p.343). This leads to higher sales of goods and services by branded companies.