Lifestyle branding: The new frontier of brand competition?

5/9/2011 - What do Apple, Facebook, Starbucks and Harley-Davidson have in common?

They’ve all become lifestyle brands that play an important role in consumers’ lives, express their values and help define them in the world.

Inspired by the success of these brands, many traditional brands are repositioning themselves, using lifestyle branding as a way to sidestep competition and connect to customers on a more personal level. But how effective is this approach?

New research from the Kellogg School finds that this strategy might backfire. “The open vistas of lifestyle branding are an illusion,” said Alexander Chernev, lead author of the study and associate professor of marketing at Kellogg. “By switching to lifestyle positioning, brands might be trading the traditional in-category competition for even fiercer cross-category competition.

“Now they have to compete not only with their direct rivals but also with brands from unrelated categories,” Chernev added. “Focusing on lifestyle puts brands like Gillette, Abercrombie & Fitch, Harley-Davidson, Starbucks, Apple, and Facebook in direct competition with one another.”

The research offers insight on the shifting nature of brand competition in the age of social media and reveals hidden challenges of lifestyle branding. The study is among the first to explore how brands serve as a means of self-expression, revealing the limitations of expressing one’s identity through brands. The study is co-authored Ryan Hamilton of Emory University’s Goizueta Business School and David Gal, assistant professor of marketing at Kellogg.

In a series of experiments, Chernev and his co-authors examined how providing consumers with various opportunities for self-expression — including sharing personal preferences, evaluating relevant lifestyle brands and customizing a product — influenced their subsequent preferences for lifestyle brands on several key dimensions, including brand relevance, brand differentiation, and willingness to pay a premium for lifestyle brands. For example, they found that asking customers to share their preferences on books, movies or hobbies made subsequently encountered lifestyle brands appear less relevant, less distinct and less valuable.

The researchers argue that the growth of social media, one-to-one marketing and mass customization has provided consumers with unprecedented opportunities to express themselves. But despite the numerous options for self-expression, the study also finds consumers’ need for self-expression through brands is finite.

As consumers come across more outlets to assert their identity, their need for self-expression might become satiated. For example, Facebook might satisfy one’s need for self-expression to the extent to which it can weaken a person’s preferences for other lifestyle brands, such as Gucci or Swatch.

“The competitive landscape is rapidly evolving,” Chernev concluded. “It’s no longer constrained by the boundaries of its own category. Now brands are competing across categories for a share of a consumer’s identity. Fulfilling individuals’ need for self-expression is becoming the new frontier of brand competition.”

The study, “Competing for Consumer Identity: Limits to Self-Expression and the Perils of Lifestyle Branding,” will appear in the May 2011 issue of the Journal of Marketing.