For decades, management books have described how the world’s biggest brands have achieved dominance and captivated consumers worldwide. We have heard tales from Coke, Intel, Apple, McDonald’s, Procter & Gamble and other prominent players. Their work has been both glorified and vilified, but almost all of us have used their products.
Now the times are changing. The unquestioned brand loyalty of yesteryear is moving away from such predominant actors. Consumers’ values have changed gradually, in a way perhaps unexpected by the leading companies. In the minds of some, the corporation has become synonymous with greed, arrogance and unethical activity.
This evolution in values has led to changes in consumer behavior and opinions. For example, many find a sense of satisfaction when they stop patronizing large corporations and turn instead to smaller players. The reason is the rule of opposite brand images: small players are almost automatically perceived as nice, friendly, ethical, responsible, and sympathetic. They don’t have to do much to establish such an image.
In reaction to these changes, CEOs of larger companies keep their top rankings by using resources available only to enterprises of their size. Using large capital strength, they can survive for years to come. However, no matter how prominent such large establishments are now, constantly evolving public perception will force them to adapt, or they will simply lose business and fade away.
With the immense sum of $160 billion in the bank, Apple is far from fading away. That doesn’t mean, however, that Apple can rest on its laurels and ignore criticism about such topics as unreasonably low wages and dangerous work conditions for Chinese factory workers. If Apple simply relies on unquestoning loyalty from its die-hard fans without addressing issues they care about, customers will slowly but surely fade away from Apple’s products.
Back in 2007, Apple was in a different position than it is today. The iPhone had just been launched, and no one could deny its cutting edge design and appeal. Several years later, Samsung, among others, has offered a solid alternative to the iPhone, and Apple no longer seems as superior as it once did. The company’s apparent loss of its edge has made consumers lose some of their desire to exclusively buy Apple products. Therefore, its declining position intensifies the need to respond to critics with care, by taking action. Otherwise customers could respond by taking their dollars elsewhere. Values such as ethical practices, fairness and responsibility have in recent times become more important than ever in the minds of consumers.
Companies need to strike a balance in focus between quarterly results and respecting consumers’ long-term values. The former keeps them alive, but the latter keeps them growing and ensures that they have a future.