1. It Starts with Being Meaningful
Valuable brands begin by creating a Meaningful experience that helps make people’s lives better. These brands invest time and effort to understand consumer needs, and then provide products and services that meet those needs in relevant ways. Indian consumers not only purchase such brands, but also are willing to pay a premium for them.
Analysis of 43 brands that appeared consistently in the BrandZ™ India Top 50 between 2014 and 2016 illustrates the combined impact of meeting the consumers’ needs and helping to improve their lives. The Meaningful scores of brands that consumers say met both these criteria are almost double the scores of brands that did not.
Brands that understand and respond in relevant ways to consumer needs are Meaningful. They have taken an important first step. And if the marketplace were not filled with established and emerging competitors, that step might be enough. It is not enough in a market that is growing and changing as rapidly as India.
2. Difference Makes the Difference… Especially in India
The impact of Difference is documented by the performance of the 43 brands that have appeared in the BrandZ™ India ranking each year since its launch in 2014. The brand value increase for brands that improved in Difference was 81 percent greater than the increase of brands that declined.
The impact is greatest when brands are both Meaningful and Different. Brands that have remained in the BrandZ™ India Top 50 for the past three years scored an average of 119 in Meaningful and 120 in Different. Similarly, brands that entered the ranking scored 116 in Meaningful and 115 in Different. These are strong scores, just slightly below the scores of the BrandZ™ Global Top 50. In contrast, brands that dropped out of the India Top 50 achieved only an average score of 100 in Meaningful and a below average score of 93 in Different.
Difference is particularly important in India. Across all Indian brands, the importance of Difference increased 31 percent over the past nine years. Difference was 21 percent of the Meaningful-Different-Salient triad nine years ago. Today it accounts for 28 percent. In China, Difference accounts for 22 percent; in the UK, just 17 percent.
Brands are constantly expanding in India, drawn by the market’s possibilities. Consumers enjoy greater choice, and choice can weaken loyalty. Being not just Meaningful, but being meaningfully different is critical and has a demonstrable impact on brand value. The value of the India Top 50 brands that scored highest on Different was almost twice the value of the brands that scored lowest.
3. Innovation Adds Impact
Being seen as Different is critical for brands, especially in competitive markets. But building perceptions of Difference can be challenging. Innovation helps. Consumers reward brands that introduce new products or services that meet genuine needs and add real improvements. Innovation drives the impression that a brand is Different.
The combination of Innovation and Difference influences two key aspects of brand equity: Brand Premium (the ability to charge a higher price than competitors) and Brand Potential (the likelihood that demand will continue or grow). The India Top 50 brands that are strong on both Innovation and Difference achieved average scores of 120 in Premium and 142 in Potential. The average score for all brands is 100.
Innovation requires introducing something that is new and unique, not simply iterative. But Innovation is not limited to products or services. New and unique can apply to all aspects of brand expression, including packaging, communication, and customer experience. In a fast-growing market like India, the possibilities for Innovation seem limitless. Perception is critical. Brand innovations have no impact unless consumers see them as innovative.
4. Advertising Appeal Builds Brand Value and Awareness
It takes investment for a brand to be seen as Meaningful, Different, and Innovative. That investment will increase brand value. But there is one more step that will increase the ROI substantially: Advertising Appeal.
Brand strength and Advertising Appeal work together. Neither a strong brand poorly communicated nor a weak brand well communicated produces optimal brand value. The production of optimal value requires both a strong brand and Advertising Appeal.
The average brand value of the India Top 50 brands that score highest on Meaningful and Different and in Advertising Appeal ($2.4 billion) is 131 percent greater than the brands that score the lowest on these dimensions ($1.0 billion).
There is also an important correlation between Advertising Appeal and Salience, the third driver of brand equity after Meaningful and Difference. Salience measures the extent to which a brand is easily recalled at the point when the consumer is in a purchasing frame of mind.
The India Top 50 brands that are strongest in Advertising Appeal scored an average of 182 in Salience, while the weakest brands in Advertising Appeal scored an average of only 89 in Salience. An average score for all brands is 100.
Creating Meaningful and Different brands is an important but incomplete exercise for building brand value until it culminates in making brands Salient, which moves the brands to activation. Brands with Advertising Appeal get the word out clearly, memorably, and persuasively.
5. Love Adds Stability and Accelerates Growth
For Meaningful, Different, and Salient brands that launch successfully, Love acts like a booster rocket, stabilizing the brands against market fluctuations and even adding thrust to drive them into higher orbit.
This is particularly the case in India, where the emergence of so many local brands has conditioned consumers to expect a constant stream of relevant new products and services. But innovation happens in cycles. Periods of iteration and gestation alternate with sparks of innovation. Consumers are more patient with brands they love.
By itself, love is important. Of the 43 brands that appeared consistently in the India BrandZ™ ranking over the past three years, those that improved their Love score increased 33 percent in brand value, while brands that did not improve their Love score increased only 14 percent. The 43 brands overall increased 25 percent in brand value.
But Love is also a multiplier. In combination with Difference, Love accelerates brand value growth. Among the 43 consistent brands, those that improved both their Love and Difference scores increased 41 percent in value, while brands whose Love and Difference scores declined increased only 8 percent in brand value.
Love is an outcome. It is a benefit that accrues to brands that are Meaningful, Different, and Salient. It is a dividend on the investment in building valuable brands. The value increase of brands that improved both in Love and Difference was five times greater than the value increase of brands that declined in Love and Difference.