An impact of the current international recession that is among those least talked about is the value of brands. Over the last 20 years or so, global companies have invested heavily in their brands and have acquired that which was seen to represent a competitive advantage over them.

Local representatives of these foreign brands know something about this, such brands have changed ownership and such changes in ownership have also meant a change in the local representative. The growth in the value of brands have been such that it has created new specialisations in various fields such as finance and marketing.

All too often mergers and acquisitions have grown in value, not so much because of the businesses being merged or acquired, but because of the brands that these businesses own. A study has found that the value of the top ten brands in the United States is larger than the market capitalisation of 70 per cent of US public companies. This is a result of the trust that consumers have placed in such brands and hence the goodwill that these brands have created in the market. In fact a casual observation of shoppers would confirm the view that the value of a brand plays a key part in the purchasing decision-making process.

Has this started to change with the onset of the recession? I am posing this question not so much because during a recession consumers seek to stretch further the value of every euro they have and therefore seek lower priced products and services, but rather because we have seen reputable firms facing financial trouble. If some brands have lost their value because they could not survive the harsh reality of the international economic recession, were such brands overvalued? And if they were overvalued, could it be that other brands are also overvalued, even though they are getting through the recession relatively unscathed?

These questions give rise to other questions. Have consumers become more thoughtful about how they consume particular products and services? At what stage does a consumer ask himself the question whether it is worth spending extra money for a premium brand? Where is the trade-off between functionality and perceived quality? Have consumers been giving a new definition to the term "value for money"? Are consumers reconsidering every product and service they buy and questioning what brands they really need? At what stage does brand become commoditised and therefore lose its premium value?

It may not be surprising that in the financial services sector, these questions have gained a great deal of ground among consumers, since in this case not only brands have faltered but also regulators, credit-rating agencies, and in some cases, also governments. Thus, consumers have a real issue as to what and whom to trust. There could be another area in which this is happening and this is the pharmaceutical sector. With the onslaught of generic pharmaceuticals and the improving perception that they are just as effective as branded pharmaceuticals, consumers have started to wonder why they have to pay so much for medicines. The grocery trade is going through a similar experience with the advent of the discount shops.

The advent of internet shopping and the possibility of giving feedback on a branded product or service in real time through some blog or consumer review site, has made the problem of brand value even more acute. So consumers have resorted to that variable which they can understand most - people. Brands are inanimate if left on their own. They acquire a living personality (and hence can grow in value) thanks to the people that handle the brand. Many years ago, it was common practice to have advertisements with famous personalities promoting particular brands. These personalities lent their image to the brand they were promoting.

With all brands taking up these tactics, there started to be little differentiation between brands. So it all boiled down to the experience of the customer when purchasing and consuming that branded product or service. Therefore the answer to the question posed by this week's contribution is fairly straightforward. Of course we can trust brands as long as we can trust the people that sell them to us.