Why consumers are not brand’s stakeholders

It is slightly unorthodox to claim that consumers are not stakeholders. Is it not self-evident that someone that buys a product has some kind of stake in a company that produced that product?

Not necessarily. If we scrutinize situation from the point of value exchange we see that markets are unique in the sense that their stakes are consumed (annihilated) through purchase. A person A has a stake in company B so long until person A consumes his stake through purchase agreement. Stake is consumed through value exchange (money for product/service). Person A as consumer might still be stakeholder on many other levels, like environmentalist, member of regulatory body or even as employee, but as consumer he has lost his stake with product consumption.

Another way how to understand separation between markets and stakeholders is to place markets in the vision part of brand formula and stakeholders in mission part. Those from vision part provide nutrition (money) in exchange for the goods produced by the brand/company. Those from mission part (government, regulatory bodies, NGO’s etc.) either consume brand externalia or constitute input elements for product/service production (suppliers and employees for instance).

Yet another way how to understand a difference between consumers and stakeholders is from the viewpoint of integrated reporting. Consumers are tied to financial capital only, while stakeholders tie to all capitals. In exchange of value (money) for value (goods) consumers directly refill financial capital that allows all other capitals to operate. And that’s it. Unlike financial stakeholders that tie to financial capital as well, but their stakes are not consumed by investment, for instance. All other stakeholders quite contrary consume financial capital and then add value through their respective capital operations. The engine represented by business model then exchanges values of other capitals for financial capital.

Andrej Drapal