The Matthew Effect refers to a phenomenon in which good becomes better, bad becomes worse, more becomes more, and less becomes less. That is the phenomenon of polarization. It comes from a parable in the New Testament? The Gospel of Matthew.
In 1968, Robert K. Merton, a researcher on the history of science in the United States, proposed this term to summarize a social psychological phenomenon: "Compared to those unknown researchers, famous scientists Usually receive more prestige even if their achievements are similar. Likewise, prestige is usually given to researchers who are already famous on the same project. For example, an award is almost always given to the most senior researcher, even if all the work All completed by a graduate student.”
This term was later borrowed by the economics community to reflect the phenomenon of unfair income distribution in winner-take-all economics where the poor get poorer and the rich get richer.
The parable of Matthew Chapter 25 in the New Testament:
Another version:
The "Matthew effect" exists widely in society. [Economic field] For example, there are two main different views on the development trends between regions in the world: one is the "convergence hypothesis" of neoclassical growth theory. This hypothesis holds that due to the law of diminishing returns on capital, when diminishing returns on capital occur in developed areas, capital will flow to underdeveloped areas where diminishing returns have not yet occurred. The result is that the growth rate of developed areas slows down, while the growth rate of underdeveloped areas slows down. The acceleration of growth will eventually lead to the convergence of the development levels of the two types of regions. Another view is that when factors such as institutions and human resources are taken into consideration at the same time, another result will often appear, that is, the "Matthew Effect" of "development divergence" between developed and underdeveloped regions. Another example is that the talent crisis will be a global phenomenon, and the "Matthew Effect" in talent possession will become more apparent: the more places with more talents, the more attractive they will be to talents; conversely, the scarcer the recognized talents will be. In addition, there is also a "Matthew effect" in [scientific and academic] research. People with more research results tend to be more famous. The more famous people have more achievements, and finally academic authority is produced.
The rise and fall of the stock price level is positively correlated with the incremental amount of funds in the stock market (newly listed or out of the market) and the turnover rate of existing funds. stocks) and the turnover rate of existing stocks are negatively correlated. The increase of market funds and the acceleration of turnover speed are reflected in the expansion of demand, and the increase of market stocks and the acceleration of turnover speed are reflected in the expansion of supply.
Like the ordinary commodity market, under the regulation of the same price change, the demand and supply of the stock market move in opposite directions or asymmetrically. Contrary to the ordinary commodity market, the price mechanism of the stock market has a positive feedback incentive function for both demand and supply. This positive price feedback mechanism always strengthens the reverse trend of supply and demand, thus widening or maintaining the imbalance between supply and demand. Therefore, in the stock market, an increase in prices will push prices up; conversely, a decrease in prices will lead to a further decrease in prices. In other words, the inherent mechanism of the stock market manifests itself in a special Matthew effect, which directly causes stock prices to deviate from their basic values ??and rise and fall sharply.
Since the Matthew Effect and the abnormal rise and fall of stock prices are the result of the inherent operating rules of the stock market, it has become an inevitable and regular operating form of the stock market. There is bound to be speculation and extraordinary turmoil in the stock market, so the stock market is always a place where you can get the price difference.
After the stock market has experienced a strong or weak Matthew-style imbalance cycle, it may enter another reverse Matthew cycle process, or it may enter a temporary equilibrium state. The reason for the suspension of a Matthew cycle, if it is the suspension of price rise, is usually due to the depletion of subsequent funds, high market risks caused by high prices, sudden bad news stimulation and excessive accumulated profit chips, etc.; If the price decline stops, it may be because the price has entered the investment value zone, sudden positive news has stimulated the situation, the accumulated holding chips are too deep, etc.
1. What is the Matthew Effect of brand capital?
The Matthew Effect of brand capital means that the greater the brand awareness of a product or service in a certain industry or industry, the greater the value of the brand. The higher it is, the more loyal consumers it has, and the larger its market share is bound to be.
On the contrary, the smaller the brand awareness of a product or service in a certain industry or industry, the lower the brand value, the fewer loyal consumers, and the smaller the market share it occupies, which will lead to reduced profits and elimination from the market. , the market it gives way to will be replaced by products or services with high brand awareness.
The Matthew Effect is a common market phenomenon in the field of brand capital: the strong always become strong and the weak always weaken, or in other words, the winner takes all.
2. Cases of successful practice of brand capital Matthew
The core value of brand capital is standards and technology, and the derived value is consumer recognition of the brand and the construction of the brand marketing system.
The highest form of capital is the corporate brand value; the intangible form of capital is the value of the corporate intellectual property; the solid form of capital is the corporate machinery, equipment and real estate. For enterprises, first-rate enterprises produce standards, second-rate enterprises produce technology, third-rate enterprises produce products, and fourth-rate enterprises produce benefits.
Only by using aircraft carrier-like "brand capital" to set standards and shape corporate brand images in the industry can companies remain invincible.
Especially in key fields such as software technology and electronic technology, core technology is the lifeblood of an enterprise's survival and development. Until now, some technologically developed countries and multinational companies still control changes in the industrial structure by controlling technical standards in many fields. Therefore, only by vigorously innovating, participating in the formulation of standards with independent intellectual property rights, and occupying brand capital can enterprises occupy the technological commanding heights in their own fields and gain market competitive advantages.
Qualcomm, Microsoft, and Japan’s 6C Alliance are all examples of companies that rely on standards to win the Chinese market. Under the operation of Qualcomm, CDMA-related technologies have become patents and international standards it has mastered. All companies that produce CDMA-related communication products must pay Qualcomm entry fees and usage fees for CDMA. Qualcomm has thus become a standard-bearing and Japanese company. A multinational company making money.
The Matthew Effect of Starbucks' brand capital has created a miracle of success. On Wall Street, Starbucks has long become a safe haven in the minds of investors. In the past ten years, its stock price has experienced four spin-offs. It has climbed 22 times, and its income is higher than that of major companies such as General Electric, Pepsi-Cola, Coca-Cola, Microsoft and IBM. What created the Starbucks miracle? Schultz, who single-handedly led Starbucks, replied: "Our greatest advantage is mutual trust with our partners. The key issue is how we maintain the consistency of corporate values ??and guiding principles during rapid development."
3. The inspiration of the Matthew Effect of brand capital on marketing innovation
With economic globalization and my country’s accession to the WTO, the construction of brand capital for domestic enterprises has become increasingly urgent. Enterprises accumulate absolute advantage in brand capital and create Sustained value promotes integrated market resources and creates huge tangible and intangible wealth effects, which will help enterprises remain invincible in the increasingly fierce market competition.
Accumulating brand capital is in line with the actual needs of enterprises to occupy the highest point in the market. Brand capital is the source of the current consumer revolution in the global market, which not only involves the field of life, but also involves the economic and financial fields. While people are pursuing lifestyle brands, they must also have brand requirements for finance. If domestic enterprises do not cultivate their own brands, it will be difficult to meet these increasingly high-tech needs in the future.
Accumulating brand capital is the core requirement for continued value creation. A brand without value is water without a source, a tree without roots. A brand can only have the characteristics of intangible asset value, such as setting standards and possessing core technology. A brand can only have value that can be converted into tangible assets. A brand can only interact with capital. Only organic connection and the formation of absolute brand capital advantages can provide enterprises with a steady source of wealth.
Accumulating brand capital is the only way to integrate marketing and create wealth. Brands need marketing, and marketing can enhance brand awareness. The formation and establishment of a brand is a process from recognition to recognition, and finally to the purpose of recognition. Integrating market resources can market the brand on a larger scale and enhance the brand's popularity. The external form of brand capital is quantifiable value, and the internal form of brand capital is the acceptance and judgment standards in consumers' minds.
In 1968, Robert K. Merton, a researcher on the history of science in the United States, proposed this term to summarize a social psychological phenomenon: "Compared to those unknown researchers, famous scientists Usually get more reputation even if their achievements are similar. Likewise, on the same project, reputation is usually given to researchers who are already famous. As a result, people with more research results tend to be more famous, and the more famous they are. The more achievements there are, the more academic authority is created." This term was later borrowed by the economics community to reflect the economic phenomenon of the poor getting poorer, the rich getting richer, and the winner taking all. The Matthew Effect is a widespread phenomenon in society, especially in the economic field: the strong will always be strong and the weak will always be weak, or in other words, the winner takes all. In 1968, American science history researcher Robert K. Merton first used the "Matthew Effect" to describe this social psychological phenomenon. Merton was the first to use this sentence to summarize a social psychological effect - "More and more honors are given to scientists who are already well-known for their contributions, while scientists who are not yet famous are refusing to recognize their contributions." problem." This is the "Matthew Effect."
Social psychologists believe that the "Matthew Effect" is a social psychological phenomenon that has both negative and positive effects. Its negative effect is: celebrities and unknown people achieve the same results. The former are often praised by superiors, interviewed by reporters, seekers and visitors come one after another, and various laurels come one after another. Some people take credit for their lack of clear self-understanding and rational attitude and stumble on the road of life; while the latter are ignored by no one and may even suffer criticism and jealousy. Its positive effects are: firstly, it can prevent society from prematurely recognizing immature results or prematurely accepting seemingly correct results; secondly, it can prevent society from prematurely recognizing results that appear to be correct; secondly, it can prevent society from prematurely recognizing results that appear to be correct; secondly, it can prevent society from prematurely recognizing results that appear to be correct; secondly, the "Matthew Effect" can create "honorary additions" and "honorary lifetime benefits". "" and other phenomena have great appeal to unknown people, prompting unknown people to strive, and this kind of struggle must have results that clearly surpass the past achievements of celebrities in order to obtain the honor they yearn for.
The "Matthew Effect" exists widely in society. Taking the economic field as an example, there are two main different views on the development trends between regions in the world:
One is the "convergence hypothesis" of neoclassical growth theory. This hypothesis holds that due to the law of diminishing returns on capital, when diminishing returns on capital occur in developed areas, capital will flow to underdeveloped areas where diminishing returns have not yet occurred. The result is that the growth rate of developed areas slows down, while the growth rate of underdeveloped areas slows down. The accelerated growth rate will eventually lead to the convergence of the development levels of the two types of regions.
Another point of view is that when factors such as systems and human resources are taken into account at the same time, another result will often appear, that is, the development between developed areas and underdeveloped areas will often show "development" The "Matthew effect" of divergence. Talents from backward areas will flow to developed areas, and resources from backward areas will flow cheaply to developed areas. The systems in backward areas are usually not as reasonable as those in developed areas, so the cycle repeats and regional differences will become larger and larger.
The gap between the rich and the poor in society will also produce the "Matthew Effect". In the stock market and property market frenzy, the bankers always make the most money, and the retail investors always lose the most. Therefore, without regulation, the money of the general public will be concentrated in the hands of a small number of people through this form, further exacerbating the polarization between rich and poor. In addition, since the rich usually enjoy better education and development opportunities, while the poor have fewer development opportunities than the rich due to economic reasons, this will also lead to the "horse race" in which the rich get richer and the poor get poorer. Too effective”.
For the government, how to avoid the Matthew Effect of the widening gap between rich and poor in economic development is a very important political issue.
"The way of heaven is to make up for the deficiency if there is more than enough damage. This is not the case with the way of man. If there is not enough damage, there is more than enough. Who can have more than enough to serve the world is the Taoist." Laozi's "Tao Te Ching"
p>The common sense of heaven is to use the surplus to make up for the missing, but the common sense of man is not to use the insufficient to satisfy the surplus. Whoever can satisfy the world with surplus is the enlightened person.
This sentence has long proposed the principle of the "Matthew Effect", but it is called the "Matthew Effect" instead of the "Laozi Effect". Isn't this very "Matthew Effect"?