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Saturday, May 21, 2011

Brands in 2031

Twenty years from now, the world will be a different place. Media, as we know it, will largely be gone and the ability to garner information and the gadgetry involved will almost seem like a science fiction scenario compared to what we can do today.

Some say that brands will be diminished tremendously as the world struggles with climate change, oil shortages, a lack of clean water, overpopulation, and less arable land.

My take is sufficiently different than most and a few readers have asked me to share it with you. Here goes:

Historically, if you want development in a nation you need four things---steel, oil, cement, and an abundant water supply. Americans are approximately 4.5% of the world’s population yet we consume 25% of the energy. Commentators say that we are addicted to oil; the reality is that we are addicted to CHEAP oil. I have followed alternative energy, particularly wind, for over thirty years. My conclusion is that alternatives can play an important bridge for us over the next three decades or more as fossil fuels become more expensive. Fossil fuels, however, will still be the dominant player as time goes on. Developing nations want to live as well as Americans do now. The US consumption of 25% of the world’s energy cannot continue much longer as others want the same resources and are willing to pay more, perhaps a lot more, for it. We will need to learn to conserve, go to alternatives, and use more nuclear power despite the current scare from Japan. Our massive domestic natural gas reserves could help a lot. As energy prices rise due to international demand, more local agriculture will pop up. It is becoming chic to be a locovore meaning you consume largely locally grown products and avoid transportation costs.

Water is something that we do not dwell on in the United States except for low rainfall areas such as Arizona. Around the world, it is different story. Some may see clean and abundant water as a basic human right, but more than half of the people currently hospitalized around the world are there because of having ingested bad water. Great strides are being made in water purification but the price for water will go up dramatically in many parts of the world. A water pipeline from Canada to Arizona sounds farfetched today but such a solution will happen somewhere in the world.

Over the next 20 years, we will have an additional two billion people on the planet. As a result, plus the energy, climate and water issues, there are people forecasting massive famines around the world. There may be situations where certain countries will be hurt badly for a brief period but I take the optimistic view that technology will trump geology and weather issues.

Think about this for a minute. Two billion more people actually will translate in to two billion new consumers. Will all of these new people be middle class? Of course not! But right now, some 20 million people in China alone join the middle class each year. Throughout Asia, India and Latin America a similar trend is going on. Imagine a young man from rural China who moves to Shanghai to work in an office. Or consider a young woman from a remote island moves to Manila. Finally, a young fellow from the mountains of Peru settles in Lima. These young people go from being virtual peasants to a modest middle class lifestyle. They purchase soaps, laundry detergent, dishwashing liquid, razor blades used almost daily, shampoo, ties, and business suits. In their leisure hours, they may visit a McDonald’s, knock back the occasional Budweiser, and sadly, smoke a Marlboro. If things go well, they may even buy a Toyota someday.

Two billion new consumers all eager to have some stake in the lifestyle that we take for granted. This translates to explosive growth for brands that are wise enough to build a presence far outside the United States or their home markets. The big multi-nationals have been doing this for decades.

New York may be the hub of the advertising world but for how long? Right now, some 80% of advertising dollars are spent in North America, Western Europe and Japan. That ratio will shift downward and quickly over the next decade.

The future for brands, marketing, promotion and advertising has never been brighter. Just make sure that you make the world your oyster rather than your provincial back yard.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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