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The big challenge for big brands today: authenticity

Before the internet, marketers had relatively free reign for making questionable competitive claims, creating a brand image of superiority, and hence demanding a premium price. But the internet has changed the ground rules. Instant access to endless information and objective feedback from friends has enabled consumers to seek and find the truth behind such promises. This has also led to an atmosphere of extensive mistrust of companies, CEO’s, and even many established brands, especially among Millennials. Today consumers want authenticity.

We are living in an age of growing skepticism and ebbing loyalty for many established brands. A recent poll by Havas, a reputable marketing agency, showed that consumers in America trust only about one fifth of all brands (least trusted – snacks and household gadgets). A report from the research firm, Mintel, indicated that about half of American shoppers trust smaller companies to do the right thing, compared to only 36% for large ones. The impact of these changing attitudes is already being felt by major brands. Catalina, a big marketing consulting firm, reported that 90 of the top 100 consumer packaged goods brands lost market share in the first half of 2015.

Smart marketers are realizing that they must change their tactics. Gone are the days when they can just communicate only “half truths” about their brands and offer marketing gimmicks. The ease of learning more about ingredients of personal care and food products, for example, has led consumers to realize that retailers’ own-label products are basically the same as more prominent brands, only much cheaper. Smaller companies are seen to be more engaging and relevant to consumers when they offer specialty or niche types of products. This trend is particularly evident among craft beers in America, which have almost doubled their market share in the past 5 years.

In 2013, the Boston Consulting Group surveyed 2,500 American consumers and found that authenticity was one of the main qualities that would attract them to a brand. Recognizing these alarming attitude trends, large companies are trying to re-build authenticity for their brands and stem their declining market share.

For Millennials, authenticity is particularly important. This survey revealed that authenticity was second in importance, only after rewarding their loyalty with discounts and other perks. Another survey found that 85% of Millennials want companies to be more “authentic”, as they want to have an “engaging, authentic” relationship with brands.

Restoring authenticity can be a challenge for many established companies:

Interbrand describes authenticity as “an internal truth and capability” and a “defined heritage.” Three approaches being pursued more to address this decline in trust are storytelling, increasing transparency, and emphasizing purity or nature:

• Stories are inherently captivating: they engage, inspire, and connect consumers emotionally (scientists call this “neuro-coupling”), plus they provide greater credibility. Whole Foods offers fascinating biographies of the chickens they are about to casserole. Blue Moon beer describes how their creator came up with the idea of garnishing each glass of pale ale with a slice of orange.

• A big issue in the food industry is the growing demand to know about ingredients, especially regarding information about genetically engineered ingredients. Campbell’s Soup recently announced that they will begin disclosing the presence of GMO ingredients like corn, soy, and sugar beets in their products, partially as an effort to become more transparent.

• The demand for natural ingredients is surging, especially among Millennials. Chobani Yogurt just initiated an advertising campaign that highlighted the artificial ingredients of their competitors, compared to its own natural ingredients.

Ultimately, this drive toward greater authenticity will force companies to develop more credible benefits that truly distinguish their brands and adjust their pricing to more honestly reflect their value to consumers. This will prove to be a boon for consumers, and hopefully encourage more creative marketing and innovative product solutions from large companies.

Jay Gronlund

Jay Gronlund is an experienced business development and branding professional with a successful track record introducing new products and services, expanding into foreign markets, re-positioning products, and facilitating ideation sessions. Jay has effectively applied proven marketing and branding principles from his background in the consumer goods industry to other industry sectors, including B2B situations. Jay’s career began in consumer packaged goods and then expanded into household products, beverages and publishing. His first company was Richardson-Vicks (now part of Proctor & Gamble), where he held new product positions in New York and in London. He continued his new product responsibilities for Arm & Hammer products at Church & Dwight (Arm & Hammer), then VP Marketing of the wine/champagne division of Seagram, and finally VP, Director of Marketing at Newsweek. Gronlund started The Pathfinder Group in New York in 1990, an international business development and brand consulting firm. Related to this, much of his work today involves re-positioning brands, ideation sessions and marketing workshops, with a primary focus on emotional branding, especially building brand trust for clients. Jay has also been teaching a marketing course at NYU since 1999, “Positioning and Brand Development". Jay recently wrote a new book, “Basics of Branding," reflecting his NYU branding course and professional experience. He has also published several articles on diverse marketing topics: “5 Steps to a Successful Ideation Session," “What B2B Marketers can Learn from B2C," “Employer Branding," “Customized Marketing for Tomorrow’s Leaders," “Sharing and Implementing New Ideas Across Borders," and “Working with the New Russians”, “Word-of-Mouth Marketing for B2B Situations," “The Future of m-Health” and “How to Build ‘Value’ for Healthcare Brands in Emerging Markets." Jay Gronlund is a graduate of Colby College and has an MBA from Tuck at Dartmouth College.

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