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Home arrow Communication arrow How Digital Communication Technology Shapes Markets: Redefining Competition, Building Cooperation

My Take

While there are strong forces toward OB there are stronger currents limiting branding. Persuasive advertising is unlikely to sustain the powerful brand. Customer reviews are transmitted faster than objective information and this reduces the power of brands as consumers are more willing to rely on friends’ reviews than advertising. Despite information cascades spreading reputation nearly instantaneously via viral marketing, network effects adding positive feedback, and older brands having first mover advantage, there is a meaningful change in the mode of consumption.

Two significant developments have occurred: renting and fragmented consumption. Both result in demand for temporary and unbundled access to content. These developments preclude sticky consumption as buyers will sample newer products in a quest for novelty. The desire for autonomy, for the freedom to make un-coerced decisions, is surfacing, as we saw in labor markets and in the market for individuals’ attention, and buyers may resist being pigeon-holed into well-defined categories (brands).

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