Brands are used to create awareness, build preference, and ultimately, to command loyalty among consumers. Companies with strong brands often attempt to build brand portfolios by acquiring brands with strong brand equity from other companies. Equity implies that there is an intangible aspect to brands that is not easily quantifiable.
Millennials and Gen Z and even Baby Boomers are starting to demand at least some part of the brand equity they are loyal to to be relevant to a common good value. This value could be either ethical, environmental, social, transparency or in the best-case scenario, all of the above.
From the “Ethical Labels Market – Global Outlook and Forecast 2020-2025” report by ReportLinker we see that “the global ethical labels market is likely to grow at a CAGR (compound annual growth rate) of over 7% during the period 2019–2025.” A growing interest in ethical sourcing, fair trade practices, and sustainability among consumer groups influences the global ethical labels market. Consumers are increasingly showing a high interest in knowing the impact of individual consumption food products on the environment.
Harvard Business Review and NYU Stern School of Business report similar growth in sustainability labelled products. “Products that had a sustainability claim on-pack accounted for 16.6% of the market in 2018, up from 14.3% in 2013, and delivered nearly $114 billion in sales, up 29% from 2013. Most important, products marketed as sustainable grew 5.6 times faster than those that were not. In more than 90% of the CPG categories, sustainability-marketed products grew faster than their conventional counterparts.”
A similar shift to the FMCG consumer behaviour is even stronger in the fashion industry where ethical branding is becoming increasingly popular and even with a slight slowdown because of the pandemic, growth is expected to quickly restore. BusinessWire reports that “the global Ethical Fashion market is expected to decline from $6.35 billion in 2019 and to $6.14 billion in 2020 at a CAGR of -3.24%. The decline is mainly due to economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and reach $8.25 billion in 2023 at CAGR of 10.33%.”
It is evident that owning a common good value as part of your brand equity is beneficial today and it will be even more beneficial tomorrow. Marketeers will have to step up their efforts in this division and steer the business (no matter the industry) in the direction the consumers are going at. Not only will this direction drive new revenue with a loyal customer base but more importantly it is the right thing to do.
Common good branding strategies:
Concerns itself with the well-being of the communities impacted by the way a brand does business. It assumes a position of leadership in the community and invests in improving the lives of those who live in it.
Social behaviour is changing and the pandemic, as well as the BLM movement, has accelerated this process. More companies are beginning to apply diversity policies in their hiring process and in this way are making a statement that will reflect positively on their brand. Even The Academy Awards (Oscars) have completely changed their nominee rules in accordance with the new social movements.
Focuses on the long-term impact of sourcing, producing, distribution and recycling products. It involves the tangible things that brands do to keep consumers and the environment safe.
Today, more than 90% of CEOs say that sustainability is fundamental for success. Evidence of the modern CEO’s state of mind is seen in how much attention companies are putting toward their sustainability strategies. Examples of sustainability initiatives include:
- Developing sustainable products and services
- Creating positions like Chief Sustainability Officer
- Publishing sustainability reports
Establishing a brand strategy that cares for the environment is something I believe will become the norm and not the exception. Not only because of the global strong young movement but also because of the policies governments all over the world are putting in action. The Paris Agreement has the signatures of near 200 countries and separately from that governments are putting their own policies within the individual states.
Big brands are also changing their strategies and are trying to brand themselves as sustainable. The most recent example is Mars Inc. and their de-forestation free palm oil. Some might argue that due to the size of big multinational companies like Mars Inc. it is hard to prove compliance with their own environmental policies and that they are only put there as a precaution. Therefore, transparency is also needed for such actions to have full effect on consumers.
This one is a bit tricky but most valuable as it compliments the other two strategies. For a brand to be truly transparent first the business will need to set an achievable mission statement that will be clearly messaged to both customers and employees. Employees are the brand ambassadors who endorse their employer corporate values which reflects on the product or service.
With the way, social media is going brands can’t really afford to deceive their consumers with pumped-up mission statements or values thinking they can get away with it. The banks in Ireland in 2008 had the most utopian mission statements and values put on paper and flashed around assuring everyone how much they care about their customers. Well, we’ve seen how true that was.
However, these are banks and they are institutions that unfortunately can afford the impudence. Most businesses can’t and shouldn’t be able to use this method as a practice when building their brand. As I’ve shown in the previous blog, Patagonia is showing how transparency should be done. Brand loyalty in recent years has become something really hard to retain as consumers are constantly shifting their habits. Patagonia is not one of those brands and because fo their mission and transparency they have still had a strong loyal consumer base.
All of the above strategies are intertwined and in their core, they are all part of the common good values that business is picking up on. When marketers start communicating these values to the consumer as a primary message the market and need for such brands will grow too. Common good branding strategy is beneficial for both consumers and business, plus the bonus of benefiting society and the environment as well.
I believe the hard work is done and the demand for this type of brand strategies is out there. Baby Boomers and Millennials are the current purchasing power and figures are showing that they are starting to prefer brands that care. Gen Z is next in line and it feels like they will demand this type of responsibility even more. That is if TikTok does not completely destroy their value system until they become a purchasing power.