Consumer goods brands lead in brand contribution
Brand contribution measures the impact of brand alone, without financials or other factors, in the mind of the consumer. A high brand contribution score – on a scale of one to five, five being the highest – suggests that a brand is resilient and likely to produce strong future earnings.
India’s Top 10 brand contribution leaders are mostly in FMCG categories. FMCG brands operate in highly competitive, often fragmented sectors and generally lack the level of dominance that can approach the monopolistic levels of service brands. However, FMCG brands often enjoy high brand equity.
And many FMCG brands have been present in India for at least 50 years, starting with brand contribution leader, Lakmé (personal care, 1952), and including, Lipton (beverages, 1898), Colgate (personal care, 1937), and Surf Excel (home care, 1959).
In contrast, many Indian service brands formed relatively recently, after the economic liberalization in the 1990s. They have rapidly and effectively built scale but not the emotional connections to consumers that drive brand contribution.
The BrandZ™ Top 50 Most Valuable Indian Brands 2014 scored an overall brand contribution average of 3.02, only a moderately strong result, in part because of the dominance of service brands that score lower in brand contribution, with financial results driving value.
However, the brand contribution results of the service brands are nuanced, with the banks generally scoring higher than the telecoms. The Indian BrandZ™ Top 5 most valuable brands scored an average 3.6 in brand contribution because three banks outperformed category expectations.
State Bank of India scored 5, and HDFC Bank and ICICI Bank each scored 4. Indian financial services brands as a group score higher in brand contribution than Brazilian or Chinese brands. Indian telecoms score lower.
Implications for brands
The structure of the Indian market, with a few categories and brands dominating in brand power, is consistent with the situation in other BRIC markets.
The concentration is partially category driven. The service brands, financial services and telecoms, which are fundamental to national infrastructure, drive scale, often with government support.
The distinction in India is that the banks and telecoms are mostly privately owned. And FMCG brands generally are part of the brand portfolio of an MNC (Multinational Corporation) or an Indian family conglomerate. These well-funded organizations are capable of driving high brand value.
FMCG brands lead brand contribution ranking...
Representing 29 percent of all media spending, FMCG led all sectors, with significant investment also in retail and auto.
...The India Top 5 score well in brand contribution...
The BrandZ™ Top 5 score better in brand contribution than the India Top 50 overall.
...Indian financial service brands outscore Brazil, China
Indian financial services brands score higher in brand contribution than Chinese or Brazilian brands.