Posts Tagged 'Keynes'

What does branding have to do with John Maynard Keynes?

In this post I will attempt to show how branding can make a small but important contribution to getting the economy back on the right track.  The essence of my argument is that branding, done right, can stimulate the desires of people to buy goods and services.  

Why is it so important to stimulate the desires to buy, buy, buy?  Allow me a small digression and I promise to answer that question.

The disastrous state of our economy has made the name John Maynard Keynes safe to say in public again.  He was the brilliant English economist who developed the ideas that helped to pull the US and UK out of the Great Depression of the 1930s.  His best known but now little read work is The General Theory of Employment, Interest and Money.

By coincidence I am very familiar with that book, having spent two years studying it under Sidney Weintraub, who had himself been one of Keynes’ students in the 1930s.  

Keynes was very concerned with “Aggregate Demand” — the sum of all our desires to purchase things now.  He recognized that it was possible for a country to fall into a situation in which the demand for goods and services fell substantially below the supply of those goods and services.  The decline in demand meant a decline in supply as companies cut their output and fired people.  This led to more declines in demand.  The downward cycle, once begun, went on for years.  The way to solve it was to stimulate demand.  If the demand didn’t come from consumers and companies, then it would come from the government.  Thus we get stimulus spending!

Keynes fell out of favor and out of the popular mind during the Supply-Side revolution of the 1980s.  Build it and they will come became our new national mantra.  

Today we are back to Keynes’ insight because demand for goods and services is falling.  People are sitting on their wallets.  Demand is dropping for cars, for flat screen tvs, for vacations.  As a result factories are closing down, companies are laying off workers.  

Which brings me back to the point of this post.  

Companies need better ways to create demand.   That is where Narrative Branding can play a role.  Dollar for dollar, Narrative Branding is the most effective way to stimulate the desire for goods and services.  

The reality is that media budgets are being slashed.  Spending more money is not an option.  

Narrative Branding is concerned with the role of a brand in the life of the customer.  By understanding that role, it is possible to create desire and demand in that customer.  

This is not the same as “differentiating” one brand from another.  It is not about the relationship between one brand and another, the position of one brand vs. another.

Only the government has the resources to stimulate the entire economy.

Narrative Branding makes it possible for individual companies to stimulate desire and demand for their offerings.

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