Gauravonomics Blog

Welcome to Gauravonomics Blog! Subscribe to my combined feed in a feed reader or by e-mail and you'll never miss a single post. Thanks for visiting!

Quick Summary: Read about the five levels in the Marketing Chain of Being, and the three laws that govern how brands move between them.

In an earlier post, I had written that, like the Renaissance Chain of Being, there is also a Marketing Chain of Being.

In this post, I’ll explain the five levels in the Marketing Chain of Being, and the three laws that govern how brands move between them.

There are five levels in the Marketing Chain of Being –

1. Commodity Hell, in which brands basically focus on price and channel promotions to sell more (think groceries).
2. Differentiation, in which brands highlight product features and benefits to command a price premium (think automobiles).
3. Engagement, in which brands use service (in both its customer service and conversation meaning) to develop relationships with customers (think Dell).
4. Cultural Currency, in which brands become shared social objects and help customers define their individual and group identities (think Nike+iPod).
5. Meaning, in which brands become the tools that customers use for self-realization or restoration (think Google).

Quick Summary: Read about how engagement is only the middle level in the ‘Marketing Chain of Being’ and how social media and customer service are only tools to create engagement.

The topic of the week in the marketing and public relations blogosphere is whether customer service is the new marketing, so much so that there’s even an upcoming event on the topic.

Most of the posts on the topic have focused on how social media is causing customer service and public relations to merge into each other to form the fabric of a new marketing paradigm.

I’m a brand manager, not a PR practitioner, and I can’t but feel that the above statement is rather simplistic. Yes, customer service is important. Yes, word of mouth is important, and, by association, public relations is important. Yes, good (or bad) customer service is an important factor in creating favorable (or unfavorable) word of mouth. Yes, social media gives customers the tools to amplify word of mouth. Yes, yes, yes and yes. But that’s only part of the story. Let me tell you the real story by going back to my post on the Marketing Chain of Being.

Quick Summary: Read about how Nike is helping customers create their own cultural currency with Nike+.

The Economics of Free

In an earlier post, I wrote about the ‘economics of free’ —

Free content -> Attention -> Free product -> Lock-in -> Paid bundled services -> $$$

The ‘Free content -> Free product -> Paid bundled services’ model is an extreme example of a trend we have been seeing for a while now — marketers bundling services with basically undifferentiated products in order to build a differentiation.

Free Content Can Convert Brands Into Cultural Currency

Take Nike as an example.

In spite of all the technology that supposedly goes inside a typical sports shoe, if you take away the logos, it’s almost impossible to differentiate between a Nike, a Reebok and an Adidas (or Puma or New Balance or…) shoe. So, Nike/ Reebok/ Adidas have instead focused on differentiating themselves by converting their brands into cultural currency. We have started talking about marketers becoming publishers and using free content to grab attention only now, but Nike/ Reebok/ Adidas have been doing it for decades. What’s more, it has worked out brilliantly for the sports shoe industry — even non-athletic types like yours truly have four pair of sports shoes — one for jogging, one for trekking, one for cross-training and one for tennis.