I love this description. Love it.
The anthropologist Grant McCracken once called branding a “diecasting mechanism”, in which cold commodities are painted with cultural meaning through the process of advertising.
I did some work a while back looking at the decline of Gap over the past 15 years. Despite the many narratives about changing tastes, culture, competition, etc., the reality is that so much of its decline can be put down to its decision to protect profit by cutting investment in marketing, and more specifically, television advertising.
Seriously, Gap didn’t advertise on TV for the best part of 7 years.
For a brand which a) sells something close to cold commodities of the clothing world, and b) had a brand built defined by ’90s cultural relevance, in turn created through iconic ads of the ’90s (everyone in vests?), the decision to cut advertising was specifically the decision to go from cultural relevance toward commodity.
It wonders then why it struggles to shift inventory, why its pricing comes under pressure, why it relies on discounting to sell through, all of which in turn creates profit pressure, which in turn forces it to cut marketing… and so on. All the while its brand deteriorates in the minds of the market.
Brands are still one of the most misunderstood phenomenons in business, despite the fundamental role they play in growth, profitability, capital velocity and cash flow. Hell, despite the fact that for most consumer businesses they are the valuable important asset.
And people still get away with cutting spending to juice profits, neglecting the fact that marketing isn’t a cost so much as an investment in a brand asset, itself the store of future cash flows…
There’s a long, boring paper I’m writing on the role of accounting standards in creating a misleading mental model of marketing, but that’s for another day…
In the meantime, hold onto Grant McCraken’s thoughts above.