How can Non-Fungible Tokens Bring Value to Brands
Technology is a powerful force of change and opportunity in all areas of society. For firms who invest in and utilise technology effectively it is a highly effective way to gain competitive advantage. A huge challenge for firms of all types is in keeping up with new and emerging technologies, whilst at the same time managing the implementation of technologies which were new only very recently.
The fear and risks for firms is in missing critical new technologies, or going with new technologies which have no long-term, or even short-term potential for success. The risks and potential bonuses in going with the right new technology are huge and making the right call critical for a firm’s future success and competitiveness.
Where firms can go to for a rigorous analysis of what is new and also relevant and trustworthy is another challenge which adds to the problems. One great and trustworthy source of evidence and analysis of new technologies comes from the academic literature.
With these thoughts in mind, for your individual assignment you are to the following academic journal article on Non-Fungiable Tokens (NFTs) and their impact on branding.
Colicev, A (2023), “How can non-fungible tokens bring value to brands,” International Journal of Research in Marketing, March, 40, 1, 30-37.
Once you have read the paper which explores the issues, proceed to provide an analysis and critique of the thinking behind the author’s work. You will then apply what you have found from the paper to a brand of your choice and propose how that brand can capitalise on NFT technology, and utilise your findings so they can implement your ideas with greater effectiveness and efficiency. You are also required to further explore key readings over and above the recommended paper to give depth and rigour to your work.
NFT Technology
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NFT Technology
Introduction
In recent years, the introduction of cutting-edge innovations, such as Non-fungible Tokens (NFTs), has altered how companies develop and provide value to their customers. Non-fungible Tokens serve as ownership records for a certain digital property. Recent innovations usually positively impact markets because they provide a novel set of capabilities that can encourage creativity within organizations. The objective is to look into how NFTs affect branding, new business models, relations with clients, and marketing. The study analysis and critiques the provided article and how Kia Motors capitalizes on NFT technology based on the lessons from the article.
Article Analysis and Critique
The relevance of non-fungible tokens has grown significantly over the period, and this trend is expected to continue with the anticipated rise of Web3. From a business perspective, NFTs can be seen as examples of brand components like the image and product layout. NFTs can first mature into independent brand components (like innovative goods) that can be essential throughout the full marketing funnel. Brand recognition can be improved, and potential customers can be attracted by introducing branded NFTs (Colicev, 2023). NFTs can also build a brand community that promotes the company. Just as internet sites changed companies and social networks created a channel for customer connection, NFTs can act as a driving force for the next phase of the business by utilizing the power of digital brand communities. The article's main argument is that NFTs can develop into standalone trademarks. It explores how NFTs can provide brand value by functioning as independent brand elements and establishing and utilizing NFT brand communities. Demonstrates particularly how these two routes can be related to each marketing funnel phase.
The author provides examples of how companies may utilize NFTs to influence customers within the marketing funnel by capitalizing on the notion that they can be independent brand elements and harness the influence of brand communities. All brands and marketing campaigns are built on fostering pre-purchase habits. When making a purchase, customers should be able to recognize and remember the business's name. To increase brand recognition, businesses must focus their NFT activities by exposing customers to their elements (Colicev, 2023). For various factors, brands may use the launch of the NFT product as a catalyst to boost brand recognition. The NFT launch can introduce the brand to hitherto untapped markets. Further, since NFTs' new product introductions call for more individualized promotional approaches for particular audiences, they empower firms to adopt more inventive marketing techniques. Businesses could gain from customer engagement in their NFT communities.
Customers decide which brands to include in their priorities throughout the shopping process and develop purchase intents. Given the wide range of customer options, businesses must use their NFT to differentiate themselves from competitors by highlighting appealing qualities and gaining favorable ratings. Consumers may develop brand loyalty by comparing their post-purchase shopping experiences with their pre-purchase ambitions (Colicev, 2023). Compared to the phases that came before it, the post-purchase phase of the marketing channel has the lowest response to marketing messages. This is because consumers are less likely to be persuaded by marketing efforts once they are familiar with a brand and have an opinion about it. NFTs support businesses in this stage by influencing customers in various ways. Companies can use the customizable product ownership structures of NFTs to strengthen customer loyalty and ownership perception. Businesses may profit from their NFT communities by creating sincere and creative storytelling about their identities. In this circumstance, the best course of action is to develop relatable brand narratives and characters that customers can relate to.
Kia Motors Capitalizing on NFT Technology
With the help of its medium- to long-term "Plan S" strategy, Kia is evolving into an environmentally responsible mobility firm. The car manufacturer has launched its inaugural Non-Fungible Token (NFT) project in Korea. The initial model of Kia's bound electric-powered EV series, the 'EV6', the design car 'Concept EV9' of the flagship EV9 to be incorporated into Kia's battery-powered car selection in 2023, and Kia's iconic sustainable SUV Niro EV to be released later in the year will all be manufactured as special edition 3D NFT artworks, with the entire revenue going back to the general public (Hyundai Motor Group, 2022). Kia's NFT project demonstrates its dedication to the long-term viability of brands and goods that keep up with rapidly evolving trends.
The successive consumer decision-making over multiple phases is called the marketing funnel. To make a purchasing choice and any further post-buy considerations, shoppers must first learn about a product or service before purchasing. Even though it is often known as the purchase funnel, the marketing funnel more widely refers to developing relationships between clients and brands (Colicev et al., 2019). Therefore, it is generally agreed that the marketing funnel consists of three phases: pre-purchase (such as brand recognition), purchase (such as intent to purchase), and post-purchase (such as satisfaction with the product, loyalty). Then, brands create custom marketing plans suitable for each level of the marketing cycle. The Kia NFT project is based on the notion that NFTs can be standalone brand elements and harness brand communities' influence. NFTs can be used to influence customers throughout the marketing funnel.
Developing pre-purchase behaviors is the cornerstone of every company and marketing initiative. Kia customers should be able to recognize and recall its name when making a purchase. The Kia NFT project must concentrate its NFT efforts on raising brand awareness by exposing consumers to its components. For some reason, Kia Motors can use the NFT model's introduction as an initiative to raise brand awareness. Initially, the NFT launch might bring the business to potential customers. The NFT hype cycle is fueled by crypto enthusiasts, Gen-Z Discord users, and a growingly skilled technology public (Pinto-Gutiérrez et al.,...