I’ve posted several times my opinion that branding, as a separate discipline from product development, is bogus. The outsourcing of drug manufacturing provides a perfect illustration of my point.
But before I get to the drug business, let’s summarize the arguments about branding.
It’s my opinion that brand is the result of product. Under my way of thinking, great products create great brands while lousy products destroy them. Let’s call this the “branding reflects product” theory.
By contrast, many marketing professionals believe that products are a component of branding, which involves a range of activities that result in customer preference. Let’s call this the “product reflects branding” theory.
Now that we’ve got the arguments straight, let’s get to the drug business.
According to the New York Times Magazine, worldwide pharmaceutical manufacturing has largely moved to China, as part of the general trend towards outsourcing. Drug factories in China are seldom inspected either by Chinese authorities or the FDA. Inspections are never a “surprise” and there’s never any follow-up. Never.
Not surprisingly, a large percentage of the drugs manufactured in China are substandard. And very little post-manufacture testing takes place when the drugs are shipped to the U.S. Once again, not surprisingly, people are beginning to die as the result of adulterated drugs manufactured in China. For example, last spring, as many as 81 people in the United States died from tainted diabetes medicine.
What does this have to do with branding? Everything.
If I’m right, and “branding reflects product” then what’s going on is easy to understand. The drug companies move manufacturing overseas to save money. Unless the executives in these companies are complete idiots, they know that some percentage of their product, if manufactured in China, will be sub-standard.
However, they also know that the lousy quality won’t matter (at least for a while) because the products will have the same brand name as once-great products that were formerly manufactured in the United States. In other words, the “brand” was the result of great products, and “brand equity” is now providing cover for a corporate strategy of foisting sub-standard goods on a public that still thinks that the company can be trusted.
On the other hand, if you believe, as do many marketing executives, that “product reflects branding” and that branding activities have real power to change the hearts and minds of customers, then why are companies moving manufacturing overseas simply to save a few paltry dollars?
If marketing activities really could create customer preference, couldn’t the pharmaceutical companies (who have GIGANTIC marketing budgets) use the power of “branding” to add enough value to pay for keeping factories in countries where drugs can be manufactured safely?
I shouldn’t think it would be all THAT difficult. How about a tag-line like: “Our drugs won’t kill you.” Or maybe a value proposition like “our drugs are made in a country where you can’t bribe a government official to let you make adulterated products that kill people, just to increase your profit margin by .1 percent.”
How difficult could THAT be?
But the fact that pharmaceutical companies are apparently helpless to make the case for safe manufacturing is incontrovertible evidence that branding — as a separate activity from creating great products — simply doesn’t work. And the result of their faith in “branding” is completely predictable. The “brands” will eventually be tainted by lousy, outsourced products.
Just ask the toy manufacturers who foisted millions of poison-painted toys on our children.
Branding reflects product. Case closed.
