An in-depth examination of the debate around the impact of Brand Purpose and Brand Values
It’s hard to find a debate livelier and more polarizing in the brand and marketing world than Brand Purpose. Critical questions discussed by marketing experts across the globe include: How can brands define their Brand Purpose? Does Brand Purpose have to be tied to social good? Is it a vital investment or could it actually damage your brand? Is it key to unlocking long-term growth and revenue, or just a shorter-term trend that’s emerged in recent years?
These questions are all the more pertinent due to the significant challenges that brands are facing in the present climate. With this in mind, a further question that should perhaps be asked is: What is the relevance of Brand Purpose in this context, and how can brands that wish to use it take full advantage of the opportunity?
In this article, we examine the argument for and against the concept of Brand Purpose, with the aim of bringing some clarity to the conversation. We also offer a point of view on the role played by Brand Purpose and Brand Values in driving consumer purchasing decisions, long-term brand performance and brand strength, taking into account individual business objectives and target audiences. The article concludes with a series of recommended steps that brands wishing to adopt Brand Purpose can follow, to help leverage purpose and values to their advantage.
How to define Brand Purpose
It may also be helpful to briefly define what Brand Purpose is not. It is not about having opinions on issues such as sustainability and diversity, and expecting consumers to buy simply because they share these views. And it is not about social or brand activism per se, such as making public statements supporting a cause. Brand Purpose is more nuanced than that. It is a complex balance to strike, but one which could drive long term brand strength and performance if approached correctly and by the right brands.Madalina CarsteaGfK’s Head of Global Sales, Brand and Marketing Intelligence
If done correctly, Brand Purpose is an extremely important part of the marketing strategy and the brand structure. It’s crucial for companies to have a clear ‘north’ and to articulate how they contribute to a greater good as well as making money. But it is the Brand Values that actually connect with consumers and are much more tangible for them.Gonzalo Garcia VillanuevaGfK’s Chief Marketing Officer
Research suggests consumers are increasingly driven by purpose and values – but is this true?
At first glance, these findings suggest that a business which aligns itself with issues at the forefront of consumer minds can expect to increase its brand strength and performance by adopting the right Brand Purpose and Brand Values.
The key question to ask here is: “Will consumers actually do what they say they want to do?” In other words, will shoppers actually buy from a company that ostensibly shares their values, or will they simply aspire to do so? And critically, do these purported consumer attitudes justify a company’s decision to invest in Brand Purpose and build their identity around it?
To answer these questions for your business, you must first quantify the impact of Brand Purpose on brand strength. I.e. does your investment in Brand Purpose increase your brand’s sales volumes, ability to charge a premium or both? Does it have no effect? Or worse, does it damage your brand, as argued by Byron Sharp in his ‘death of brands’ address at the 2021 Festival of Marketing2?
We will discuss Sharp’s views later. First, we will examine the concept of the “Brand Purpose Gap”.
The Brand Purpose Gap – what is it and does it exist?
The Brand Purpose Gap is a misalignment between what people or companies say they will do and what they actually do. In other words, it is a gap between intention and action. In terms of consumer behavior, the Brand Purpose Gap occurs when people say they want (or aspire to) buy brands that support a cause, serve a deeper purpose and align with their core values – but in reality, they do not.
For example, GfK’s “Who Cares? Who Does? Report 2021” found that 65% of global consumers try to buy products with sustainable packaging, but at the same time, just 29% regularly avoid plastic packaging. This is despite the fact that the report also shows that product packaging is a key factor that consumers take into consideration when trying to shop sustainably. GfK has calculated that the 36% of consumers who are not fulfilling their sustainable buying aspirations – or, in other words, the actual value of the Brand Purpose Gap – to be worth $806bn of untapped opportunity for the FMCG sector alone3.
When it comes to reality, many consumers tend to favor brands offering relevant products that simply meet their needs (e.g. good quality, easy to use, affordably priced). Unsurprisingly, the current economic conditions might reinforce this, with many consumers forced to turn to functional, trusted brands that ‘do the job,’ whether or not these are the products they would actually prefer or aspire to buy. Taking the UK food sector as an example, sales at discounters such as Aldi and Lidl are expected to rise by £22.5 billion, or 6.6%, in 2022 – figures that are unlikely to be connected to either supermarket’s Brand Purpose4.
GfK Brand Architect research backs this up, showing that whilst Brand Purpose and Brand Values have little impact on Brand Choice (which drives mass market sales volumes for brands such as Aldi and Lidl), they do have an impact on Brand Premium (the willingness to spend more money on one brand over another) for those people who can afford to pay more. This is illustrated in the graphic below, which compares drivers of Brand Choice with those of Brand Premium, together forming Brand Strength.
Can the Brand Purpose Gap be closed?
Yes – but with a caveat. Driving Brand Premium, and closing the Brand Purpose Gap, as a result, can only be achieved if the target customer can actually afford to choose one brand over another.
Madalina Carstea, Head of Global Sales, Brand, and Marketing Intelligence at GfK, explains further. “Brand Purpose and Brand Values – as in supporting the right causes – do matter to consumers, or more accurately, they are starting to matter. Your success will ultimately depend on the importance your target consumers place on your brand’s purpose. It will also hinge on how involved they are with your category – and, of course, on their spending power. It is important to remember that there will always be an affluent sector or audience that is willing to spend more on premium brands, or that can afford to act in line with their values and buy the brands that resonate with them.”
Brand Premium Drivers. Source: GfK Brand Architect 2021 foundational research
According to Carstea, the opportunity for brands with the right approach to Brand Purpose and Brand Values is considerable; there is a space in the market waiting to be filled. “Right now, most people are still not associating purpose and values with the brands they buy, as illustrated by our GfK Brand Architect 2021 research,” says Carstea.
GfK Brand Architect, 2021. Associations with brands on average, T&D brands
“This is both a warning flag and a great opportunity. A warning flag because it shows that very few brands are regarded as being credible and reflecting the values they represent. And an opportunity because, as yet, very few brands own these positioning territories, as shown by the relatively low percentages in the chart. If you act early, your brand can own this space and create a long-term advantage by closing the Brand Purpose Gap and driving premium.
“However, communicating the right messages in the right way to the right people will be key. Only brands that play their cards right will win.”
Is Brand Purpose right for your business?
Brand Purpose will not be the right strategy for some brands, especially those with a mass-market audience and a strong focus on achieving a wider consumer reach with price-conscious consumers. On the other hand, Power Brands have both a mass-market audience and the ability to charge a premium.
To ascertain whether Brand Purpose could work for your business, consider the chart below.
If your brand falls into the Power or Exclusive Brand categories, it is a strategy worth considering, because a strong Brand Purpose and Brand Values will help you differentiate and stand out from the competition, which is an essential part of a strategy designed to drive Brand Premium.
For Smaller or Mainstream brands, however, focusing on Brand Choice – growing sales volumes by meeting functional needs and nurturing trust – could be a better approach.
Communicating Brand Purpose effectively can help your business:
- Bring clarity to business strategy. Defining your brand’s reason for being (beyond making money) can be invaluable in helping you identify which non-financial goals you want to focus on. In turn, this will help inform the development of the right products and services which meet these goals, perfectly aligning your consumer offering with your purported Brand Purpose. As the Harvard Business Review concluded in 2019, defining purpose can help businesses “reshape their value proposition” in a way that delivers long-term consumer benefits and growth5.
- Improve customer loyalty. The simple fact is that people like to feel good about themselves. As an example, if buying Fair Trade food and drink products over non-Fair Trade associated brands helps consumers feel good, they will stay loyal to those products. A Porter Novelli survey, published in 2021, found that 40.7% of people are loyal to brands with a purpose-based driver, compared to 37.5% for brands with functional-based drivers6.
- Enhance creativity and innovation. Interestingly, it appears that having a Brand Purpose can help drive innovation. Linking back to the above point about strategy, this makes perfect sense. After all, if your company has a strong sense of purpose and direction, it is not a huge leap to assume that this will help you to innovate and transform more effectively to better meet consumer and business needs. The Deloitte Insights 2020 Global Marketing Trends Report bears this out, finding that purpose-driven companies reported 30% higher levels of innovation7.
- Recruit and retain the best talent. Brand Purpose matters to employees. Increasingly, job-seekers are looking beyond the highest salary levels to companies with a strong CSR policy, or which make significant contributions to social or environmental issues8. Once hired, these staff are more likely to stay loyal, which reduces turnover costs, and have higher engagement levels leading to enhanced performance9.
There are other benefits and research findings we could consider. However, we now need to look at the other side of the debate and assess what can happen when Brand Purpose is not approached or communicated in the right way.
When Brand Purpose goes wrong
In his ‘death of brands’ address to the 2021 Festival of Marketing, long-time critic of Brand Purpose, Byron Sharp, expounded that if a company takes this route, “…it’s just so easy to copy…As a marketer I worry that it leads to the sort of advertising a 12-year-old kid would come up with in a high school assignment. ‘Buy this brand because it will help children in Africa’. If all brands do that it’s very boring and not creative…It could be the end of brands. Retailers will just dominate.” 2
This leads onto our next point. Some companies simply try too hard with their chosen purpose and values. There is a fine balance between communicating a Brand Purpose and set of Brand Values that resonate with your audience so they take notice, and alienating consumers. Brands with a wider audience have an even harder act to balance as they must consider the Brand Choice drivers of Meeting Needs and Trust as well as the Brand Premium Drivers of Excellence, Uniqueness, Values & Purpose.
Brand Choice Drivers. Source: GfK Brand Architect 2021 foundational research
There is also the fact that some consumers simply do not care about Brand Purpose and believe that brands should concentrate on selling their products and services. The below graphic illustrates this by age group.
GfK Consumer Life Study, 202010
As can be seen from the data, Millennials and Gen Z are the groups that appear to be the keenest for brands to ‘go out on a limb’ to support their chosen issues, whilst older consumers would prefer brands to stay out of controversial issues and just focus on their products. We can conclude from this that consumer expectations can vary by age group – but this isn’t the sole factor to bear in mind. It is also very difficult to address causes or issues that appeal to everyone and are seen as relevant to the core business, especially where brands are targeting a wide audience.
Diageo’s Global Head of Beer, Baileys and Smirnoff, Mark Sandys, gave a perfect description of this challenge in 2020 when he commented that: “The concept of purpose is in danger of becoming disconnected from what brands and companies actually do.”11
Is Brand Purpose a worthwhile investment?
While the Brand Purpose Gap does exist, there’s still a big and growing opportunity for brands that invest in their Brand Purpose plans now, particularly those that thoughtfully review their business goals, their target audiences and their core values. The brands that will succeed at closing the gap are those that create a purpose and set of values that perfectly align themselves with their consumer base and position them to leverage Brand Purpose in their favor.Madalina CarsteaGfK’s Head of Global Sales, Brand and Marketing Intelligence
“However, a brand’s ability – or inclination – to do this will depend entirely on the company’s long-term objectives and growth strategy. It must be remembered that Brand Purpose is not the winning strategy for everyone, even some brands that fall into the ‘Power’ or ‘Exclusive’ categories. As Andy Cridland said in 2020, ‘Not all brands even need a purpose. It is clear to see that many brands exist and thrive with a distinctive market positioning strategy. Think Marmite. Great (Power) brand. No purpose.”12
“I totally agree. But for those brands that can benefit from Brand Purpose, it’s critical that they take the right approach,” concludes Madalina Carstea.
Creating a winning Brand Purpose strategy
To craft a winning Brand Purpose strategy, brands must understand their consumers (and their employees) better, on all levels, before communicating with the right people in the right way. We have identified the following steps that will help brands succeed.
1. Learn what matters most to your target audience
GfK Brand Architect research in 2021 found that, from all brand and purpose statements, the only one that stood out in terms of importance was “Values I identify with.”1 This is a clear signal that not all causes are equally important to all people. The first step is to carry out market and employee research to learn what matters most to your consumers and team members. It is worth noting that Brand Purpose is a newer concept that can be vague and difficult for people to understand; therefore, care needs to be taken to ensure the right questions are being asked.
2. Select purpose and values with authenticity in mind
When choosing Brand Purpose and Brand Values, it is critical that these reflect your internal corporate culture as well as resonate with your target customers. Selecting values that do not match your culture or business activities will create a disconnect, even if the issues matter to your customers.
The sustainability gap13
Getting the balance right can be difficult. Consider the current actions of your business and perception among consumers compared to where the business strives to be. It is important to be realistic, as consumers will see through overly ambitious but inauthentic claims. For example, a company with a consistently poor Health & Safety record with a Brand Purpose that revolves around employee welfare will not be seen as credible, even if it is making genuine efforts to improve.
To help achieve this, questions to ask and discuss with colleagues and stakeholders include:
- What value does your brand bring to your target audiences?
- Are your selected purpose and values credible and coherent?
- Is your purpose aligned with the nature of your products and services?
- How well does your Brand Purpose fit with your wider business goals?
3. Find your unique brand position
As noted above, GfK research shows that uniqueness is highly correlated with Brand Premium and plays a key strategic role for Exclusive and Power Brands in particular – the same groups that are most likely to adopt Brand Purpose and Brand Values.
It, therefore, stands to reason that brands that wish to leverage Brand Purpose should strive to identify a unique position. The purpose itself might not be unique. But the way it is spun and presented should clearly differentiate between the brand’s stance and that of its competitors.
4. Test your purpose and values before rolling them out
Before launching your new Brand Purpose and Brand Values, it is essential to test them out with a group of consumers that match your target demographic. Critical points to cover include authenticity and the balance between Brand Purpose, Brand Values and more functional elements such as price points and meeting consumer needs. If your findings show there is a disconnect in any of these areas, you will need to refine your chosen purpose and values, or even start again from the beginning.
5. Embed your purpose and values throughout your business
Once you have successfully aligned your purpose and values with those of your target audience, they should become the underlying basis for all key decisions, impacting every business function from HR and operational processes to brand positioning and pricing structures. Infusing your Brand Purpose and Brand Values across all levels and departments of your business is key, which is why the process should be embraced and driven by leaders as well as departments. By empowering teams and individuals to implement the new purpose and values into their everyday working lives, change will be driven democratically from the bottom up as well as from the top down.
6. Find the right ways to communicate effectively
Communicating your Brand Purpose and Brand Values should be an important part of the brand marketing strategy. Using their preferred online and offline channels, inform your consumers on what your brand stands for and what they can expect when they purchase it. Key messages should be embedded within sales and marketing communications, making it clear how your Brand Purpose and Brand Values are infused throughout your organization and are used to influence your decision-making.
Make sure you communicate your purpose and values to other key stakeholders, also. These might include suppliers, partners, brands in other categories and even other companies competing in the same space (within reason). If there are opportunities for synergy that strengthen the impact, credibility and authenticity of your Brand Purpose and Values, these should be leveraged and not passed over.
About GfK Brand Architect
- GfK Consumer Life Research, 2021.
- Marketing Week. “Purpose could the ‘death of brands’ warns Byron Sharp”. October 2021.
- “Who Cares? Who Does? Report”. 2021.
- Mintel via International Supermarket News. “Discounter market set to top $34 billion as sales spring back in 2022.” December 2021.
- Harvard Business Review. “Put purpose at the core of your strategy.” September 2019.
- Porter Novelli. “Purpose Perception: Implicit Associations Study.” February 2021.
- Deloitte Insights. “2020 Global Marketing Trends.” 2019.
- Cone Communications. “2016 Cone Communications Millennial Employee Engagement Study.” 2016.
- “Employee engagement on the rise in the US.” August 2018.
- GfK Consumer Life Research, 2020.
- Marketing Week. “Diageo on what it learnt about purpose after ‘misdiagnosing’ Baileys.” January 2022.
- Marketing Week. “Can we get some perspective on brand purpose?” January 2020.
- WCWD 2020 EU-10 / gfknewron Consumer Q4 2021 international coverage, all countries; *top 10 brands per country per product group