Brands as Information Services Today - McKitterick's Conundrum

© 2012 Macmillan Publishers Ltd. 1350-23IX Journal of Brand Management Vol. 20, 2, 80–95

www.palgrave-journals.com/bm/

Correspondence: Alan Mitchell 121 Abbeville Road, London Sw4 9JL, UK E-mail: [email protected]

effect of bolstering, deepening and sus-taining the brand ?

MR FACING BOTH WAYS Deep down in the foundations of the mar-keting project lies a fault line, a conundrum where marketers forever fi nd themselves pulled in two opposing directions. On the one hand, marketing theory teaches marketers that they should identify and meet customer needs. On the other hand, marketers also believe they should be ‘ effective ’ in changing customer attitudes

INTRODUCTION The Call for Papers of this Special Issue – The new world of brand – introduced its theme thus: ‘ Increasing consumer power, accelerated by the meteoric rise of social media, threatens the foundations of branding ’ . This article asks, is this true? It goes on to question the question: if increasing con-sumer power ‘ threatens the foundation of branding ’ , what does that say about branding? Surely, if brands are an unadul-terated benefi t for the consumer, shouldn ’ t increasing consumer power have the opposite

Opinion Piece

McKitterick ’ s Conundrum Received (in revised form): 6 th August 2012

Alan Mitchell is Strategy Director at Ctrl-Shift, the consumer empowerment specialists.

ABSTRACT The Call for Papers of this Special Issue introduced its theme by saying that: ‘ Increasing consumer power, accelerated by the meteoric rise of social media, threatens the foundations of branding ’ . This article examines the intellectual and operational conditions that created modern theories of marketing and branding to show that developments such as increasing consumer empowerment are not a threat to the foundations of branding. They are a threat to the foundations of an outdated and incoherent theory of branding: the persuasion paradigm, defi ned broadly here as the quest for the skills needed to ‘ make the customer do what suits the interests of the business ’ . The article shows how, far from helping build brands, the persuasion paradigm has led marketers to misallocate resources, undermine customer trust and fail to recognise far-reaching changes in the marketing environment – especially the rise of a new and separate market for decision-support services; the market for ‘ better decisions ’ as well as ‘ better products and services ’ . By discarding the persuasion paradigm and reorienting brands as information services, marketers can regain the high ground of consumer trust and value. Journal of Brand Management (2012) 20, 80 – 95. doi: 10.1057/bm.2012.52 ; published online 5 October 2012

Keywords: branding ; consumer empowerment ; decision-making ; behavioural economics ; marketing metrics ; social media


McKitterick ’ s Conundrum

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‘ responding ’ rather than the other way round? How to get the balance right? What happens when or if there ’ s a confl ict between ‘ changing ’ and ‘ responding ’ ? Which takes precedence over the other?

Another 25 years later in 1996, Kotler wrote his classic textbook The Principles of Marketing . In it, he noted that ‘ Marketers should study buyers to fi nd out how they evaluate brand alternatives. If they know what evaluative processes go on, marketers can take steps to infl uence the buyer ’ s deci-sion ’ ( Kotler and Armstrong, 1996, p. 165 ). At this crucial juncture of the consumer ’ s fi nal buying decision, identifying and meeting the customer ’ s needs had disap-peared off Kotler ’ s agenda. Persuasion – infl uencing the buyer ’ s decision – had taken precedence. Kotler ’ s recommendation was (to use McKitterick ’ s words) to ‘ make the customer do what suits the interests of the business ’ , rather than ‘ make the business do what suits the interests of the customer ’ .

Today, McKitterick ’ s conundrum remains as prevalent as ever as practitioners rou-tinely talk of ‘ identifying and meeting cus-tomer needs ’ and ‘ changing customer attitudes and behaviours ’ more or less in the same breath as if there were no con-ceivable confl ict or contradiction between the two. That is a puzzle. Can, should, marketing continue to face both ways?

SERVICE OR DIS-SERVICE? There is a degree to which all communica-tion is persuasion. But in marketing, the quest to persuade has become something else entirely: a concerted, industrial-scale project – replete with its own budgets, methodologies, strategies, theories, tools and techniques – to mould millions of peo-ples ’ attitudes and behaviours for the pur-poses of commercial gain. Kotler talked about it as ‘ the persuasion process ’ . ‘ This type of communication is so important ’ , he argued in his 1972 textbook Marketing Management: Analysis, Planning and Control ,

and behaviours so that the consumer buys their brands.

John McKitterick, a senior marketing manager at GE, highlighted this conun-drum in 1957, when he wrote in a mar-keting textbook that ‘ The principal task of the marketing function … is not so much to be skilful in making the customer do what suits the interests of the business as to be skilled in conceiving and then making the business do what suits the interests of the customer ’ ( Webster, 1994, p. 10 ).

In this article, we defi ne marketing ’ s persuasion paradigm as the fi rst part of McKitterick ’ s juxtaposition: the quest to be ‘ skilful in making the customer do what suits the interests of the business ’ . This per-suasion paradigm has a long and persistent presence in the theory and practice of mar-keting. It was strong enough in the 1950s for McKitterick to critique it. Twenty-fi ve years later in 1972 in the second edition of his textbook Marketing Management , Philip Kotler wrestled with the same fault line. There were, he said, ‘ contrasting ’ views of marketing. ‘ Marketing can be viewed largely as a technology for infl uencing others (the sales concept), or as a discipline for serving others ’ , he noted. ‘ The sales concept holds that the job is one of fi nding customers for present products and per-suading them to buy these products … . The marketing concept, on the other hand, calls for spending most of the effort on fi nding out what a target audience wants and creating the goods and services to sat-isfy these wants ’ .

‘ In practice ’ , Kotler continued, ‘ since at any time there are both products in exist-ence and new products to be born, most marketing practice is a mixture of selling and marketing – that is, a change strategy and a response strategy ’ ( Kotler, 1972, pp. 882 – 882 ). But he sidestepped the obvious question. What is the right mix? Does it matter if it is 99 per cent selling / ‘ changing ’ and 1 per cent marketing /

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that it deserves its own specialist vocabu-lary. ‘ We will give it the special name of communisuasion . And the art and science of effective communisuasion will be called suasionetics ’ ( Kotler, 1972, p. 624 ).

Kotler ’ s vocabulary did not catch on, but the assumptions he was expressing have long been taken for granted within the marketing profession. People differ about the details of the mechanics of the persua-sion process. Whole books have been written about marketing and advertising as persuasion without ‘ persuasion ’ or the processes by which it is supposed to work ever being defi ned ( Fletcher, 2008 ). Whether persuasion works via a direct appeal or via indirect, roundabout mecha-nisms, by rational argument, by overt emo-tional appeals, by acting in the role of ‘ choice architect ’ or via covert and / or sub-conscious infl uence has long been a matter of intense debate.

But most participants in these debates agree on the underlying quest as described by McKitterick. They are all trying to hone the skill of ‘ making the customer do what suits the interests of the business ’ . For them, the only question is: How? Which approach is most ‘ effective ’ in achieving the under-lying goal? Thus Kotler wrote in 1999 that when designing the marketing mix, ‘ with regard to measurement, companies … should be measuring persuasion scores, namely the amount of increase in brand preference ’ ( Kotler, 1999, p. 109 ).

Ten years later, writing in Powers of Persuasion in 2008, Winston Fletcher stressed the importance of ‘ adding value ’ to the brand. The job of the communication, he argued, is to ‘ ensure consumers feel that the brand is worth its price ’ ( Fletcher, 2008, p. 59 ). The added value is the increase in the percentage of consumers preferring the branded version of a product to an anonymous version when the two have exactly the same formulations – that is, ‘ added value ’ equals value extraction: the

consumer paying more for the same thing. It is this underlying assumption, the branding is customer dis-service facilitating the extraction of additional value from the cus-tomer rather than a service enabling the delivery of value to the customer, that turns marketing into a power struggle and makes some marketers fear consumer empowerment.

ORIGINS OF THE PERSUASION PARADIGM Where did this persuasion power struggle come from? The answer is, it is a product of the operational and intellectual condi-tions that prevailed during marketing and brands ’ formative years in an industrial age. A closer review of these conditions helps explain why brands and branding look like they do today – and why increasingly, as the Call for Papers puts it, ‘ the old man-tras of consistency and control seem untenable ’ .

The industrial age mindset Brands and marketing emerged from an industrial age whose core agenda was to tame, conquer and control nature. Science was the instrument of control: use experi-mentation and observation to work out how things tick and apply this knowledge to transform raw materials into useful, desirable products. Using knowledge about nature – how to process iron ore, oil, rubber trees and so on – you could create a massive complex such as Henry Ford ’ s River Rouge plant where raw materials went in at one end and shiny new cars came out from the other.

This was the triumph of Newtonian thinking: a world of one-way cause and effect where independent variables – out-side forces – acted upon dependent varia-bles to change their nature or behaviour, thus allowing for the highly desirable goals of predictability and control. This extended to employees whose working practices had



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every technological development – radio, broadcast TV, satellite and cable – the brand manager had complete control over what message was to be communicated to which audiences, via which media channels and when. Actually making sure the right message got through to the right audiences cost effectively may have been a constant headache, but there was no doubt about the underlying nature of the process: one of top-down control.

Psychology and the quest for control The triumph of the Newtonian scientifi c worldview was so complete in the world of inanimate objects that it seemed natural it should apply equally well with animate ones. Understanding how living organisms, including humans, behave was intimately linked to the quest for control, including in psychology. As the founding father of behaviourism John B. Watson put it, “ Psychology … is a purely objective exper-imental branch of natural science. Its theo-retical goal is the prediction and control of behavior ’ ( Cziko, 2000 ).

At the time, the prevailing assumption (going back to enlightenment philosophers such as John Locke) was that human (and animal) minds were effectively blank slates written upon by their experiences – putty moulded (or ‘ branded ’ ) by their environ-ment. The environment created stimuli, and the organism responded to these stimuli. The challenge for psychology was to iden-tify the environmental causes of different behaviours. As Watson put it: “ … the goal of psychological study is the ascertaining of such data and laws that, given the stimulus, psychology can predict what the responses will be; or, on the other hand, given the response, it can specify the nature of the effective stimulus ” ( Watson, 1919 ).

In the hands of Watson ’ s successor B.F. Skinner, this turned into the quest for the secrets of ‘ conditioning ’ : using the right stimuli to embed the right reactions

to be planned and coordinated, often down to the minutest detail in order to ensure production and quality targets. Customers had to be controlled too – because if they did not buy the resulting products, the fi rm would go bust. The way to exercise this control, it was assumed, was to adopt the same basic approach of one-way cause and effect: of outside independent variables (marketing stimuli and messages) working on dependent variables (consumers) to change them. Thus, the ‘ communication model ’ described by Kotler in Marketing Management was based on a one-way fl ow of information from a communicator ‘ the sender or source of the message ’ , who sends a message , via a channel to an audience , whose attitudes and / or behaviours are duly infl u-enced – an ‘ effect ’ . The fi gure used by Kotler to describe this communication mode was an almost exact ‘ lift ’ of Newtonian theory ( Kotler, 1972, p. 627 ).

This managerial, controlling approach to capitalism was embedded deeply into the assumptions of the age ( Zuboff and Maxmin, 2002, pp. 50 – 52 ). For example, the quan-titative models that economists used to build their theories in the 1940s and 1950s were originally invented to control chem-ical plants, the making of plywood and to build radio transistors. To work, the models had to treat people as if they were as pliant and malleable as the physical components they dealt with ( Warsh, 2006, p. 168 ).

Technology Available technologies reinforced industrial age assumptions. Marketers ’ experience, day in and day out, confi rmed their belief that they were, indeed, in control. Kotler ’ s depiction of a purely one-way communica-tion process was not just theory – it described actual day-to-day practice. From the turn of the twentieth century to the turn of the twenty-fi rst century (when the Internet was just beginning to emerge in its initial ‘ brochure ware ’ phase) through

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into the organism to get the right response ( Skinner, 1950 ). Conditioning in turn was explained by an associationist view of learning: when a behaviour gets associated with a reward or punishment, the two can become linked indelibly ( Pinker, 2002 ). Stimulus leads to response.

These ideas – of the blank slate, condi-tioning via association and stimulus-response – created the intellectual milieu in which brands and the discipline of branding were created. They quickly became a core part of the marketing canon. Once established, they proved almost infi nitely versatile, easily able to absorb and adapt to passing intellectual fashions with relative ease. The same underlying model allowed for every type of stimuli, ‘ rational ’ as in price and product functionality and ‘ emotional ’ .

Sometimes the model was applied directly and crudely as when, for example, Clyde Miller wrote in his 1946 book The Process of Persuasion :

It takes time, yes, but think what it can mean to your fi rm in profi ts if you can condition ten million children to grow up as adults trained to buy your products as soldiers are trained to advance when they hear the trigger words ‘ forward march ’ . Eager minds can be moulded to want your products! ( Miller, 1946 )

Sometimes, they were applied more subtly as when, for example, the ‘ stimulus ’ was seen as being subliminal, unconscious or ‘ emotional ’ . Thus, in 1927, the President of the American Association of Advertisers argued that ‘ average intelligence is surpris-ingly low. It is so much more effectively guided by its subconscious impulses and instincts than by its reason ’ ( Zuboff and Maxmin, 2002, p. 232 ). Thirty years later, Vance Packard wrote in his classic book The Hidden Persuaders about the advertising industry ’ s attempts to use ‘ insights gleaned from psychiatry and the social sciences ’ to ‘ infl uence and manipulate ’ us and ‘ to

channel our unthinking habits, our pur-chasing decisions and our thought process ’ ( Packard, 1957 ).

The stimulus-response model was still going strong 40 years later in 2009 when (as just one example among many) the Market Research Bulletin was opining:

As our senses are triggered we get an emotional response – we feel things fi rst and only think about them later. By taking the individuals through the series of patterns that arise from the stimulus we can identify key drivers, images and associations that make up the product or brand as an emotional entity. ( Market Research Bulletin , 10 September 2009)

A year later Robin Wight, a long-time doyen of the UK advertising industry, was repeating the same basic blank slate / conditioning thinking when he declared that advertising ’ s ‘ core competency ’ is to ‘ build a brand into consumers ’ brains … Old fashioned television advertising at its best has served brands pretty well by embedding slogans and images in the brain ’ ( Wight, 2009 ).

All the while, stimulus-response – the same underlying philosophy and a quest for predictability control – was espoused as offi cial teaching via textbooks like Kotler ’ s Principles of Marketing . In the 1996 seventh edition, for example, Kotler wrote that the ‘ central question ’ for marketing is how consumers respond to various marketing stimuli:

The starting point is the stimulus-response model of buyer behaviour shown in Figure 5.1. This fi gure shows that marketing and other stimuli enter the consumer ’ s ‘ black box ’ and produce certain responses. Marketers must fi nd out what is in the buyer ’ s black box. ( Kotler and Armstrong, 1996, p. 143 )

Thus, not only was the prediction and con-trol of customer attitudes and behaviours



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rationality – was also played out in the measurement of the effectiveness of brand-building activities . A key purpose of brand building, it came to be argued, was to be able to charge a price premium. As Winston Fletcher reported, the standard way of measuring the value of a brand was to com-pare the price of a comparable product free of any of the accoutrements of branding (the outcome of a ‘ rational ’ decision) with the price of the branded product. The dif-ference was seen as evidence of the power of branding – a measure of the brand ’ s ability to lure consumers away from making purely ‘ rational ’ decisions.

Section summary When all these factors combined – an industrial age mindset of ‘ knowledge = control ’ fused with prevailing economic and psychological theories and available technologies – marketers had an apparently robust, consistent model of how brands and branding worked.

Brands were created in consumers ’ heads by a series of mostly communication-driven activities ( ‘ stimuli ’ ) that created a series of emotional and other ‘ associations ’ that trig-gered certain desirable responses such as ‘ loyalty ’ or a willingness to pay a brand premium. Successful branding was there-fore about exercising control over con-sumer attitudes and behaviours via the creation of brand imagery and messages, and success was measured by seeing how ‘ effective ’ the brand-building process had been in diverting the consumer away from making a purely ‘ rational ’ decision: the brand ’ s price premium when compared to a ‘ pure ’ commodity product.

Along the way, this created an informal division of labour, which became embedded within the practice marketing. It was implic-itly understood that ‘ the product ’ had to meet consumer needs. The design and develop-ment of the product was primarily about getting the business to do what suited the

seen as the natural extension of the suc-cesses of the industrial age – it was believed that the mechanisms of achieving this control had already been discovered. Now, the only real issue was how to do it ‘ effectively ’ .

Rational economic man Another core infl uence in marketing ’ s formative years was twentieth-century economists ’ doctrine of rational economic man. The economists taught us that human beings were rational decision-makers. In the economist ’ s lexicon, ‘ rational ’ had a highly specifi c meaning: collecting and objectively assessing all the facts in order to reach a decision that maximises utility.

Marketers developed a love / hate rela-tionship with Rational Economic Man. On the one hand, many aspects of marketing, such as notions of brands as vehicles of ‘ demonstrable product superiority ’ were a direct application of homo economicus . On the other hand, marketers discovered that consumer decision-making was often not rational. In fact, often it seemed very irrational.

At the time, there was no coherent explanation of this consumer ‘ irrationality ’ . Instead, ‘ rational ’ and ‘ irrational ’ were absorbed into the marketing canon as mirror-image opposites: a Tweedledum / Tweedledee double act where the prod-uct ’ s functional attributes and price were seen as vehicles of ‘ rational ’ appeals while ‘ the brand ’ became the vehicle of ‘ irrational ’ emotional appeals. This involved different processes. As the iconic marketer Waltor Landor pointed out, whereas ‘ prod-ucts are made in the factory, brands are created in the mind ’ via the brand ’ s com-munications. In this way, the product and its branding became operationally and prac-tically separate – a split that has lasted to this day.

Marketing ’ s underlying acceptance – or at least, inability to escape the doctrine of

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customer. ‘ Branding ’ on the other hand – communications about the product – was primarily about persuasion: getting the customer to do what suited the busi-ness; changing customer attitudes and behaviours.

Marketers saw no deep contradic-tion between these polar opposites of McKitterick ’ s conundrum. They pursued both goals – of being skilful in making the customer do what suits the interests of the business and in being skilled in making the business do what suits the interests of the customer – with equal vigour.

Every now and then they might argue about which goal should be prioritised. But if there was a logical contradiction between the two, it did not seem to matter: both sides of the coin were focused on the same goal of closing the sale – essential to the business ’ survival and prosperity. There was, therefore, no need to question the underlying assumptions. All the economic, psychological and technological stars seemed to align. The only question was how to apply the resulting insights to achieve greatest ‘ effectiveness ’ .

Marketers ’ assumptions about metrics followed from this. If their focus had been on meeting customer needs, the metrics of branding and marketing communications would have focused on how effectively marketing communications met these needs. This did not happen. Instead, mar-keters measured the ‘ effectiveness ’ of their actions by measuring the degree to which they managed to change customer attitudes and behaviours in their brands ’ favour, and when push came to shove the baseline against which ‘ change ’ was to be measured against was that of rationality – what a ‘ rational ’ consumer would do if uninfl u-enced by the blandishments of branding.

KNOWLEDGE OR ILLUSION? Over the last few decades, however, the intel-lectual and operational conditions that defi ned

branding ’ s formative years and created mar-keting ’ s persuasion paradigm have evaporated. Each pillar of this paradigm – the scientifi c / industrial mindset, economic theory, psy-chology and technology – has collapsed, making way for a very different picture.

The scientifi c / industrial mindset Since marketing ’ s formative days, the scientifi c / industrial mindset has evolved: we are learning some of the intrinsic limits of what we can predict and control.

We have discovered chaotic systems that, while behaving deterministically, neverthe-less remain fundamentally unpredictable ( Gleick, 1997 ). We have discovered com-plex systems, populated by a wide variety of agents all making their own decisions about how to behave – with these decisions evolving and changing as agents learn, the net effect of their interactions creating emergent properties that cannot be seen, or predicted, at the level of the agent alone ( Mauboussin, 2011 ).

We have discovered our own bounded rationality (nobody who is part of a system can see all its workings), and the pervasive-ness of unintended consequences (such as CO 2 emissions and climate change). The environmental movement has taught us that we are parts of the system we seek to control, and that the arrow of causation works two ways, not just one.

Meanwhile, the concept of evolution has moved centre stage, focusing our attention less on mechanisms of top-down hierarchical control and more on the exploration of ‘ pos-sibility spaces ’ and the need for endless adapt-ability. As a result, yesterday ’ s control agenda is making ways for different philosophies of openness to new information, and of con-stant alignment and realignment to changing circumstances ( Kaufman, 1996 ).

Technology The big shift in the twenty-fi rst century technology is interactivity – the ability for



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Far from everything being determined by the environment, the danger nowadays is the opposite form of over-determinism in the form of ‘ genes dictate everything ’ . Stimulus-response thinking has also been turned on its head, as psychologists begin to investigate human motivations and intentions. Bombarded by thousands of stimuli we choose to respond to just a tiny few. How? Why? Far from perceptions – stimuli – controlling behaviour, we use our behaviour to control our perceptions – to reach desired states of comfort for example ( Cziko, 2000 ). The essence of learning is not conditioning but the opposite – fl exi-bility, the ability to respond variably according to shifting conditions, contexts, priorities and so on. We do not learn by making associations, we use our (appar-ently) in-built powers of reasoning to make logical associations (and discard illog-ical ones) in the fi rst place ( Pinker, 2002, p. 79 ).

Perhaps that is why Skinner ’ s own stu-dents developed their Harvard Law of Animal behaviour, which reads: ‘ Under controlled experimental conditions of temperature, time, lighting, feeding, and training, the organism will behave as it damned well pleases ’ ( Pinker, 2002, p. 177 ).

With the collapse of behaviourism, mar-keters ’ quest for control turned to new mechanisms including, lately, neuroscience. Thus, for example, in Robin Wight ’ s Battle of Ideas speech he speculated that brands may be built into consumers ’ brains via ‘ mirror neurons ’ . ‘ Mirror neuron activity in the brain could be the magic bullet we ’ ve been looking for, indicating evi-dence of how we could measure the crea-tion of branded empathy ’ ( Wight, 2009 ).

Yet, far from helping us locate the ‘ buy button ’ , neuroscience is teaching us why it never existed. ‘ We are hardly in control of our own minds, never mind being under the sway of others ’ ( Norretranders, 1991 ;

information to fl ow all ways, ‘ bottom-up ’ and peer-to-peer as well as ‘ top-down ’ . In the twenty-fi rst century, consumers acquired voice as well as choice. Whether it is search (driven by information input by the user), social networking sites such as Facebook, user-generated content via sites like YouTube, or online forums and peer reviews, the dominant fl ow of information is reversing: from ‘ top-down ’ (organisation to consumer) to ‘ bottom-up ’ (individuals to each other and to organisations). Individuals are becoming as prolifi c infor-mation creators and managers as organisa-tions. For example, according to IDC , in 2010, organisations stored 7 exabytes of data compared to individuals who stored 6 exabytes, up from close to zero just 10 years ago ( French et al , 2011 ).

These technological shifts undermine marketers ’ former confi dence that they were in control of the communication process. Charlene Li and John Bernoff summed up the new conventional wisdom in Groundswell when they argued that brands are ‘ under threat ’ because ‘ now they [cus-tomers] are talking to each other ’ and they can communicate ‘ an idea about what your brand signifi es, an idea that may be very different from the image you are projecting ’ ( Li and Bernoff, 2008, p. 12 ).

This assumes that brands ’ previous con-trol was real. Developments elsewhere sug-gest a different picture: what brands are losing is the appearance and illusion of con-trol. In which case, the ‘ threat ’ is more apparent than real.

Psychology At one point in the late twentieth century, psychology and behaviourism, with its near-exclusive focus on conditioning and stimulus-response, were effectively one and the same. Since then, however, the discipline of psychology has been revolutionised.

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Metzinger, 2009 ; Eagleman, 2011 ). In fact, the very attempt to persuade tends to gen-erate resistance ( Laran et al , 2011 ), and we are very good at divining the intentions of others, including their intention to per-suade or infl uence us. This has led some to argue that advertising is only really ‘ effec-tive ’ when our defences are down and we are not paying attention to it ( Heath, 2012, p. 34 ).

Rational economic man Starting in the late twentieth century, economists started investigating what real people actually do rather than base their theories on the a priori assumption of ‘ rationality ’ . Behavioural economics has now identifi ed a long list of ‘ predictable irrationalities ’ – ways in which human deci-sion-making routinely errs from the picture painted by the economists ( Ariely, 2010 ).

We do not have free access to complete information. Decision-making is a costly activity and we routinely seek short-cuts – rules of thumb that (we hope) get us to a ‘ good enough ’ decision with minimum efforts. Brand loyalty is one of many such rules of thumb. We are storytellers and cognitive misers, which means we often content ourselves with explanations that do not hold water on deeper investigation but which we nevertheless accept for the time being. That can lead us astray. Brands are storytellers. We have a status quo bias, which means that whoever sets the default option often sets the decision. Real power goes not to the chooser, but to the person who chooses the choice architecture – often the marketer. Familiarity. We are risk-averse creatures, naturally shying away from the unfa-miliar. This means, when given a choice between familiar and unfamiliar we tend to opt for the familiar even if it is no

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different or better than the unfamiliar. Advertising that makes brands familiar rides on the back of this wave. Framing. We naturally put decisions into context – we take account of surrounding information (for example, the prices of other products we can see). Changing this information context can change percep-tions of value, and therefore decisions. Priming and suggestion. If you lodge an idea of ‘ what to look for ’ in someone ’ s mind, then they will tend to look for it, and not for other things. Some adver-tising uses this to focus attention on a product ’ s strong points. Loss aversion and hyperbolic discounting. We are hardwired to value a bird in the hand above two in the bush, to over-downgrade potential future benefi ts and upweight immediate losses. Norms and peer pressure. We are social animals and often fi nd it hard to go against the tide of opinion. Obedience. We have a tendency to respect authority fi gures, and pay undue attention to what they say ( Sutherland, 1992 ; Thaler and Sunstein, 2008 ).

This is just a small sample of what the behavioural economists have discovered, and their fi ndings cast a new light on twen-tieth-century theories of branding. Most marketing metrics live and breathe the assumption that we are measuring change: measure the before, measure the after, eliminate noise from the measurements to identify how ‘ effective ’ the marketing was changing the consumer in some way. However the above fi ndings suggest that many of the consumer behaviours attrib-uted to brands ’ ‘ powers of persuasion ’ are caused by something else entirely: not so much brand communications ’ success in changing consumer attitudes and behav-iours, and more marketers learning how to adapt to, and ride on the back of, unchanging ‘ predictable irrationalities ’ .

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There is one other twist to the tail of rational economic man. The game-theoretic assumption that every actor in an economic exchange is focused exclusively on maxim-ising personal gain excludes consideration of the powers of reciprocity – another deep human instinct. Reciprocity makes the sig-nalling of benign intentions extremely important. It also makes identifying cheats and dissemblers critically important. Bearing this distinction in mind it is possible to revisit episodes in marketing ’ s history and to rewrite what happened.

Marketers adopted the mantra of demon-strable product superiority, for example, as part of their belief in rational economic man. Big brands based their strategies on it. But perhaps the biggest argument in favour of demonstrable product superiority is not its appeal to the ‘ rational ’ decision-maker but the fact that the public commit-ment to demonstrable product superiority is a powerful signal of intention – of trust-worthiness. When marketers began to abandon demonstrable product superiority in favour of ‘ irrational ’ , ‘ emotional ’ appeals, ironically, they might have been under-mining one of the strongest emotional supports for their brands.

There is some tentative evidence for this in the public ’ s changing attitudes towards advertising over the decades. From the 1930s onwards public responses to questions like ‘ how believable / truthful / informative are ads? ’ were generally positive, reaching a peak during the mid-1950s when ‘ pro ’ attitudes reached eight on a nine-point scale. By the 1970s, however, ratings had fallen to below three and have bobbed around that score ever since ( Armstrong, 2010 ).

This apparently unstoppable decline in public attitudes is now a major cause a concern in advertising circles. ‘ Advertising is facing a problem ’ , noted Advertising Association Chief Executive Tim Lefroy recently. ‘ Favourability has evaporated.

To illustrate the confusion between cause and effect this can create, consider the many charts grocery retailers and manufacturers produce showing the rela-tionship between price promotions and sales volumes. There is a clear correlation. When there is a price promotion of, say, ‘ 25 per cent off! ’ sales go up. The bigger the discount the bigger the sales spike. Charts like these have been used countless times to demonstrate the powers of stim-ulus-response – the marketer ’ s ability to change consumer behaviour; to elicit pre-dictable responses from carefully designed market ‘ stimuli ’ .

But there is another way of looking at exactly the same evidence. Perhaps these consumers have not changed their behav-iour one iota. Perhaps they always look for the best value / best priced product, so when they buy the item that is on promo-tion they are not changing anything. In fact, come to think of it, the only behaviour we know has changed is the marketer ’ s: it is the marketer who has reduced his price. So, do these charts demonstrate marketers ’ ability to change consumers ’ behaviour in a measurable, predictable way? Or does it demonstrate the exact opposite: that con-sistent unchanging consumer behaviour triggers changes to marketers ’ behaviour?

Take another example. Marketers pride themselves for their ability to ‘ add emo-tional value ’ to functional products. But in experiments to do with assessments of risk and gambling, where all subjects have to do is to choose which of two buttons to press, they begin to assign ‘ personalities ’ to the buttons and respond emotionally to them. So, is it marketers who are ‘ adding ’ emotions to lifeless products by their ‘ branding ’ or is it people naturally doing this for themselves? ( Kahneman, 2011, p. 333 ) Such examples suggest that many marketing metrics may not be measuring what marketers think or claim they are measuring.

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The public ’ s trust and confi dence in adver-tising has fallen through the fl oor and the industry has missed a trick by failing to properly renegotiate its deal with the society in which it operates: its compact with the public has broken down ’ ( Lefroy, 2011 ).

Section summary Our review of the intellectual, technolog-ical and economic foundations of market-ing ’ s persuasion paradigm fi nds that they have evaporated. Like a cartoon character suspended in mid-air having run off a cliff, we are in limbo. So where next? Is it true that, as the Call for Papers suggested, ‘ Increasing consumer power, accelerated by the meteoric rise of social media, threatens the foundations of branding ’ ? Our review suggests the answer is ‘ No ’ . It is not the ‘ foundations of branding ’ that are threat-ened, only the foundations of an historically obsolete ideology of branding. So what is the alternative?

DO BRANDS NEED TO ‘ PERSUADE ’ ? The fi rst step to an alternative is to recog-nise that brands never needed any special ‘ powers of persuasion ’ to fl ourish. Their success is based on a range of other factors including the following:

The increasing returns generated by economies of scale: scale reduces unit costs, which increases margin (without needing to divert consumers from making ‘ rational ’ decisions), which enables invest-ment in R & D, plant and distribution, which makes cheaper, better products possible, which further increases scale and so on. The workings of reputation. Brands build powerful reputations for quality and value that drives repeat purchase, high market shares, robust margins and so on. The workings of trust. Successful brands keep their promises relating to, for

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example, quality and price. Keeping promises builds trust, which helps build and reinforce a good reputation. The mere exposure effect. Advertising makes brands famous, and as the behav-ioural economists have discovered, people prefer things they are familiar with because familiarity represents less of a risk. This advertising effect has nothing to do with the persuasive content of the advertising campaign and everything to do with the fact that the product is being advertised. Core activities of branding such as cre-ating a clear proposition and making the brand easily recognisable improve shopper economics by making it easier to make decisions, and buy. Again, improving the customer ’ s purchasing process has nothing to do with persuasion. Double jeopardy effects. Routinely and pervasively, big brands not only have higher market share, they also are pur-chased more frequently by more people. This is a characteristic of market dynamics, not persuasion ( Ehrenberg et al , 1990 ).

THE COSTS OF THE PERSUASION PARADIGM The second step is to recognise just how counter-productive and costly the persua-sion paradigm has been. In particular, it has had three detrimental effects.

1. It has embedded confl icting goals into the heart of the marketing project . These confl icting goals have been institution-alised into a perverse division of labour between ‘ the product ’ , which focuses on the consumer ’ s needs, and ‘ the com-munication ’ , which focuses on the com-pany ’ s needs – persuasion. This has:

led marketers to squander precious resources. Persuasion on the industrial scale sought by marketing is an alchem-ical quest for the elixir of transmuta-tion. The alchemists spent centuries

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may be critically important. There is, for example, a long-standing debate about how to determine the ROI of marketing spend – return on investment for the company, that is. But the critical metric in marketing communications may be customer ROI – individuals addressing the question ‘ why should I invest my time and attention in this? ’ Yet few marketers measure customer ROI. The result is a metrics system that fails to measure at least half of the equa-tion, making it diffi cult to learn from experience. This has condemned mar-keters to repeat the same mistakes time and again: for example, to invest even more in the search for the secrets of successful persuasion.

3. It has created a strategic blindspot in mar-keting : a routine and sustained inability, or refusal, to address a consumer need that the persuasion paradigm ignores: consumers ’ desire for information, as well as products and services, that meet their needs, in particular the information they need to make better decisions. This has created a gap in the market for serv-ices, tools and sources of information that in McKinsey ’ s words ‘ quench consumers ’ thirst for objective advice about products ’ ( McKinsey Global Institute, 2011 ). In an era when ‘ audi-ences ’ were effectively captive – when there were just a handful of TV stations for example – this was not a major con-cern to marketers who remained in ‘ control ’ . But in an era where search, comparison sites, online forums and communities, peer reviews, blogs and social media fl ourish, it is a potentially grand strategic failure.

The currency of brands is consumer trust and attention. Yet when it comes to the crucial arena of consumers researching and considering purchasing decisions, because most marketing communication

searching for the philosopher ’ s stone, an elixir which would turn lead into gold. Marketers have squandered sim-ilar resources searching for the elixir of ‘ effective ’ persuasion that would turn autonomous customers into corporate gold, secure sources of superior rev-enue streams for the brand; undermined trust. The net effect of the persuasion paradigm is counter-productive, actually making marketers ’ job harder ( Ariely, 2010 ). It has gene-rated marketing ’ s own form of climate change. Every time marketers indulge in their desire to ‘ persuade ’ , their actions generate a toxic emission of mistrust. The actions themselves, along with the products they are supposed to promote, may well be forgotten. But the toxic emissions of mistrust remain behind, accumulating in the atmosphere. From The Hidden Persuaders on, marketers have been actively tea-ching consumers, the media and regu -lators not to trust marketing . The result is a paradox. Nowadays, many con-sumers trust the product s they buy implicitly, while not trusting the mar-keting of these products at all. Far from improving marketing effectiveness, this is a source of massive waste and probably the single biggest obstacle to improved marketing effectiveness.

2. It has caused ongoing confusion by misat-tributing cause and effect, and focusing on metrics based on questionable assumptions. Many of the metrics that supposedly demonstrate branding ’ s power to change consumer attitudes and behaviours may actually provide evi-dence of something else entirely – the unchanging effects of ‘ predictable irra-tionalities ’ in human behaviour. The metrics do not measure what they purport to measure. The same philos-ophy of marketing metrics also induces marketers not to measure things that

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are designed to meet the marketer ’ s and not the consumer ’ s need, marketers guar-antee that their communications are not well placed to win the competition for con-sumer trust and attention.

In sum, it is the persuasion paradigm that perceives the empowered consumer as a threat – and it is the persuasion paradigm that paralyses marketing in the face of this ‘ threat ’ . Messaging is not the same as helping. The harder marketers focus on the quest for more effective persuasion, the more irrelevant – and wasteful – their activ-ities become for consumers.

BRANDS AS INFORMATION SERVICES Does this mean the foundations of branding are ‘ threatened ’ after all? Not at all. As we have seen, brands never needed ‘ persuasion ’ to fl ourish in the fi rst place. If consumers are persuaded of the value of a particular brand, it is not because of some special per-suasive process but a by-product and out-come. It is because the brand has done its job: of providing superior customer value, of taking advantage of economies of scale, of making and keeping promises, building a reputation, making itself famous and so on.

But if ‘ persuasion ’ is not the job of the marketer, what is? The answer lies in a new understanding of the role of branding in an information age: a world where ‘ bottom-up ’ and peer-to-peer information fl ows increasingly out-muscle traditional ‘ top-down ’ communications; where providing consumers with the information they want and need to make and implement better decisions is a signifi cant source of consumer value in its own right.

In a world like this, brands need to earn consumers ’ engagement and attention by acting as information services, identi-fying and meeting customers ’ information needs as carefully and assiduously as they do to customers ’ consumption / usage needs.

Every piece of information and communi-cation provided by the company has to pass the same stringent test as every other product: the test of value for the customer . This dissolves McKitterick ’ s conundrum and restores unity to the marketing project.

Marketing has long taught that fi rms fl ourish by aligning what they do to cus-tomer needs and wants. But this alignment is not restricted to ‘ the product ’ ; it extends to information and communication too. The information / communications mar-keters provide are as much a part of value delivery as their products and services.

The commercial logic is the same too. Products succeed in the marketplace because they are worth buying; brand com-munications succeed in the marketplace for the same reason, from the customer ’ s point of view they are worth buying – this time with the customer ’ s trust, time and attention.

Brands as information services have ele-ments of continuity and discontinuity with traditional approaches to marketing. On the continuity side, they recognise the behav-ioural economists ’ fi nding that familiarity breeds liking, so they seek fame as they have always done (while recognising that being famous is not the same as ‘ persua-sion ’ ). They also place a high degree of emphasis on emotion: creating the signals that generate trust. And they recognise the value of communication skills. To meet the customer ’ s information needs, marketers need deep insights into exactly what these needs are. What is the customer trying to achieve with this information? Exactly what information do they need to achieve their goals? How do they like to use information, in what forms? When? To what level of detail, via what channel?

On the discontinuity side, they challenge the industrial age aphorism that ‘ knowledge is power ’ . Instead, they turn this aphorism on its head by embracing ‘ knowledge as



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same either way: to deploy the fi rm ’ s spe-cialist knowledge and expertise as tools in the hands of the customer, to help cus-tomers better achieve their own goals and purposes.

In doing this, brands deliberately and publicly eschew any uses of information that confuses, misleads, misinforms or manipulates the customer into doing some-thing that puts the needs of the business ahead of those of the customer. They realise that for the brand ’ s reputation, informa-tional quality and integrity is as important as environmental and ethical integrity. And they focus on building information-sharing relationships: two-way fl ow of information between customer and company rather than traditional top-down, one-way com-munication processes.

In short, brands as information services provide their customers with information worth searching for, using and sharing, as well as products and services worth buying and using. In doing so, they earn customer trust, time, attention and willingness to share information – things brands desperately need – while transcending McKitterick ’ s conundrum to unite everything marketers do (product, service, information and commu-nication) around ‘ making the business do what suits the interests of the customer ’ .

CONCLUSION Brands came into their own in the twen-tieth century. Aside from a few Internet-based megabrands such as Google and Facebook (which have fl ourished by placing information as a tool in the hands of the user), most of the brands we see around us today were launched and fl ourished in an era that, in retrospect, displayed unique (and passing) characteristics. This was a century where:

mass production – the scientifi c / industrial age – triumphed, and with it a particular view of human beings ’ relationship with

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empowerment ’ . The underlying question here is simple. Should the fruits of tech-nology and scientifi c enquiry – such as the fi ndings of behavioural economics and neuroscience – be used mainly or exclu-sively as tools in marketers ’ hands to further their quest for effective persuasion? Or should they be deployed to empower con-sumers with increased self-understanding?

Behavioural economists Richard Thaler and Cass Sunstein presented this dilemma clearly in their infl uential book Nudge. Their ‘ liberal paternalistic ’ answer that this new knowledge should be used ‘ to infl u-ence choices in a way that will make choosers better off, as judged by themselves ’ (their italics), has proved controversial ( Thaler and Sunstein, 2008, p. 5 ). But now that the question has been asked it will not go away. Brands as information services answer this question decisively by embracing a philosophy of alignment rather than one of control, to deploy ‘ knowledge as empowerment ’ to help ‘ make choosers better off as judged by themselves ’ .

This is in line with the insights of ‘ service dominant logic ’ . Industrial age business models organised themselves around fi rms embedding value into products and services that were then sold on to consumers and consumed. ‘ Consumer value ’ and ‘ the product ’ were one and the same – con-sumer value was not and could not be provided in any other way. Marketing communications were just a means to an end: to help close the sale.

An information / knowledge age creates a different perspective. Now we can see fi rms and their brands as specialist sources of knowledge and expertise, providing value to the customer ‘ through deeds, processes and performances ’ ( Vargo and Lusch, 2004 ). Sometimes this knowledge and expertise is best made available crystal-lised into a product or service. But at other times it is best made available in the form of information or advice. The goal is the

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the world around them, a view summed up by the catchphrase ‘ knowledge is power ’ ; our understanding of human motivations and behaviours, of psychology, was dom-inated by two big ideas – the ‘ blank slate ’ view of human nature and the discovery of the unconscious; all economic theories took the notion of ‘ rational economic man ’ as their starting point; and prevailing technologies of communica-tion, whether printing, radio or televi-sion broadcasting, or even the early stages of the Internet were all ‘ top-down ’ and under the control of the marketer.

Separately and together these generated marketing ’ s persuasion paradigm, and in doing so split marketing into the two halves identifi ed by John McKitterick 60 years ago: ‘ making the customer do what suits the interests of the business ’ and ‘ making the business do what suits the interests of the customer ’ .

The resulting ‘ division of labour ’ within marketing – between ‘ the product ’ , which met the customer ’ s need, and ‘ the communication ’ , which met the fi rm ’ s need to persuade the customer to buy the product – has done brands more harm than good. It has led to a misallocation of resources, loss of trust, and a failure to address consumers ’ biggest need of all: the need to make better decisions. And, because of the false assumptions embedded within persuasion-oriented metrics systems, it has also hindered marketers from learning from their experience.

Brands never needed ‘ persuasion ’ to fl ourish, and today the operational and intellectual conditions that created belief in the persuasion paradigm have evaporated. The new conditions do not represent a threat to the foundations of branding. On the contrary, they offer brands the chance to reclaim and reinforce their

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original role as vehicles of superior value to customers. Yes, of course, this role needs updating, but with brands as information services this is entirely doable. Brands as information services add new value by placing information and knowledge into the hands of customers, rather than treating them as a means of control. The empow-ered consumer is not a threat to the foun-dations of brands. It is by empowering consumers that brands will grow and fl ourish.

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Brands as Information Services Today - McKitterick's Conundrum

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