Brand Stability

1. Difference Makes the Difference

Brand Difference drives Brand Value

In a world of so much product sameness, being different makes a difference. Brands consumers view as "Different" generally achieve higher Brand Value.

Over the past 10 years, the brands valued both in 2006 and 2015, which ranked in the top half of the BrandZ™ Top 100 Most Valuable Global Brands, achieved an average Difference score of 139 and grew 124 percent in Brand Value. In contrast, brands in the bottom half of the ranking scored 96 in Difference and increased only 24 percent in Brand Value (An average Difference score is 100).

How brands achieve difference varies. The top-scoring brands on Difference are also seen as creative, in control and trustworthy. But it's not enough to be different just for the sake of being different. Difference needs to correspond to the brand proposition. Brands need to be different with a purpose that's inspiring and relevant to consumers.

The fast food, retail and technology categories are highest in Difference overall. Global banks and soft drinks are lowest – although individual brands buck the trend, such as Chase Bank and Red Bull. The possibility of being seen as different is open to any brand in all categories.

Difference influences Brand Value

Brand Implications

Difference is vitally important. It impacts how much money a brand makes and the sustainability of the brand's value and profit growth. A category leader - like Coca-Cola or BMW - needs to guard leadership and keep refreshing the brand message to be always unique. An innovator like Apple needs to constantly lead the innovation curve. In the digital era, all brands need to increase meaningful difference to engage consumers and increase Brand Power.

 

2. Brand Becomes More Important

Strongest brands survive during challenging times

Brand Power proved crucial during the past 10 years. The decade divided roughly into two halves, before and after the global financial crisis. No category was spared as consumers spent more cautiously and consciously.

High Brand Power helped brands survive and even flourish during this turmoil. Brand Power is the BrandZ™ measure of one aspect of brand equity, a consumer's predisposition to purchase a particular brand. In 2006, the BrandZ™ Global Top 100 brands achieved an average Brand Power score of 142. By 2015 that score had increased to 170 (A score of 100 is average).

Newcomer brands in part drove the increase in Global Top 100 Brand Power scores. Brands entering the Global Top 100 since 2006 score 176 in Brand Power, on average. The average score of brands that dropped from the ranking since 2006 is 135.

In fact, 135 is a high score, but not high enough to remain in the increasingly competitive BrandZ™ Global Top 100 ranking with valuable newcomer brands that effectively build Salience and Meaningful Difference, the key components of Brand Power.

Brand Power becomes more important

Brand Implications

Brand Power helps sustain and grow Brand Value and profitability. Given the amount of market disruption, brand should become more important, even in categories, such as banks or oil and gas, where financial performance, rather than brand historically has driven Brand Value. In the digital era, brands need to be more meaningfully different to engage with consumers and achieve higher Brand Power.

 

3. Purpose Builds Equity

Clear purpose fast tracks brand equity

Having a clear brand purpose accelerates the growth of brand equity, the factor that predisposes a consumer to purchase a particular brand, or to pay more for it, or both.

Purpose essentially means having a reason for being beyond making money. At its basic level, brand purpose is about improving the life of the consumer in some way – making it easier, richer or more interesting, for example.

At its most fully formed and ideal level, brand purpose not only improves the life of the consumer but also contributes to making the world better. Achieving this ideal level is not only a good thing to do, but is also smart for brand building.

Strong brands depend on difference. Difference is harder to achieve today, when competitors provide comparable brand functionality and even emotional appeal. Brand purpose, especially a higher purpose, becomes a differentiator.

Brand purpose builds brand equity

Brand Implications

Because consumers will continue to expect more from brands, having a purpose is not really optional. But brand purpose cannot be invented. It must be genuine to the brand, inspire the employees, be relevant to the consumer and clearly communicated. Done right, brand purpose helps sustain brands through the inevitable market fluctuations.

 

4. Branding Precedes Advertising

Perfect the proposition, then communicate it

Two things are critical for building and sustaining valuable brands: a clear, resonant brand idea or proposition, and compelling advertising. In combination, the two components drive Brand Value exponentially.

The brands that consumers say have a strong brand proposition and excellent advertising grew 168 percent in Brand Value over the past 10 years. But strong brand proposition comes first. Brands with a strong brand proposition but lacked excellent advertising grew just 76 percent over 10 years.

And the other way around, brands with strong advertising but not much of a brand-proposition story to tell appreciated only 27 percent in Brand Value. Brands that consumers said performed poorly both in brand proposition and advertising grew only 21 percent in 10 years.

A clear and well-communicated brand proposition drives brand value. Deficiency can be costly, since each percentage point of brand value increase – or decrease – represents billions of dollars.

Brand strength drives value

Brand Implications

Focusing first on creating a meaningful and compelling brand proposition, and then a Big Idea for Communication and advertising it, is the most efficient and effective way to build Brand Value and receive the greatest effectiveness and return on marketing investment. How to ensure a brand’s proposition remains to be Meaningful to the consumers and how to execute the proposition throughout the organization to deliver consistent brand experience are the key challenges for many brands.

 

5. Innovation Drives Brand Value

Trend-setting brands viewed as Different

Consumers see innovative brands – brands that set trends – as Different and as leaders. These perceptions pay significant dividends in brand value growth. Over the past 10 years, brands that scored highest in the BrandZ™ trend-setting metric increased an average of 161 percent in Brand Value. Brands that scored lowest increased only 13 percent.

When consumers score a brand high in trend-setting, they typically view it as creative, different, desirable, adventurous or assertive. The trend-setters include many technology brands, but not exclusively. Nike, UPS and PayPal score high in the BrandZ™ Trendsetter Index, for example.

Trend-setting brands share in common the determination to understand the needs of consumers, the ability to identify the gaps where needs are going unmet, and the willingness to take the creative leaps and risks required to close those gaps with new products and services.

Trend-setting brands win in value

Brand Implications

Brands need to set trends to win. They need to become leaders through innovation. Especially as categories become more competitive, being a trendsetter means being seen as different, which is increasingly difficult but critical for brand value growth. The difference needs to be noticeable, relevant to the customer, genuine for the brand and matched with a big creative idea. Brands need to be forward-looking and can deliver innovative product and experiences beyond consumers’ expectation at more acceptable prices. Even without breakthrough products, brands still need to make sure their communications look and feel innovative.

 

6. Love Isn't All You Need, But It's Powerful

Loved brands grow value at faster pace

Brands can’t survive on love alone. But love has a multiplier effect. Brands that are loved by consumers increase more rapidly in Brand Value – and the impact is substantial. Over the past 10 years, the rise in value for brands scoring high in the BrandZ™ "Love" metric was 10 times greater than the value rise for brands scoring low in Love.

Love measures the emotional affinity of a brand. It’s not simply about making the brand warm and friendly, although that’s fine, if it’s genuine. Rather, love usually follows great performance. Brands from across categories score high in love, from a payment system like Visa to fast-food giant KFC to Baidu, the Chinese search engine.

Sometimes brands do all the right things but are not highly loved. Then love is an area to boost, because love is a key component of making a brand meaningful. Loved brands exist in partnership with their customers and try to understand the world from the customer’s point of view.

Loved brands are highly valued

Brand Implications

Love alone is not enough. But when love is part of the full package of efficacy and purpose, and communication is humane in tone, love can strengthen brand loyalty and drive brand value growth. Sustaining love depends to a large degree on continuous and genuine communication.

 

7. Innovation and Love Form a Virtuous Circle

Balance ensures long-term success

Love and innovation go together like a horse and carriage. They separately drive brand value growth. But together they form a virtuous circle that balances brands with qualities that help ensure long-term survival and success.

Brands seen as innovative are more likely to be loved. Love provides the space brands need to innovate while still functioning effectively day to day in the unremitting pressure of the marketplace.

Consumers often become infatuated with the newest, shiniest product. That’s fine for brands looking for a fling. But it's not enough to sustain brand value growth over the potentially long lifetime of a great brand.

Even the most trend-setting brands experience swings between periods of intensive innovation and periods of iterative progress. Love provides the forgiveness necessary when a brand’s cycle of creative development is out of sync with consumer expectations.

Love and innovation are a winning combination

Brand Implications

From the consumer view, some brands are more innovative and others more lovable. For the brand it doesn’t have to be an either-or situation. Even the strongest brands gain greater stability and long-term resilience from a healthy balance of innovation and love.

 

8. Trusted or Busted

Repaired trust adds brand power, value

Consumers may try a brand once or twice but they won’t stay with it if they don’t trust it. A brand's good behavior over time builds trust. Once the trust reservoir is filled, consumers are more likely to recommend a brand, assuming that its current behavior matches its promise.

Brands can lose trust. And, most important, brands can restore trust. The possibility of restoring trust became important as brands recovered from the global financial crisis. Not only is it possible to restore trust, but greater trust also correlates with greater Brand Value, Brand Power and differentiation.

A comparison between the 10 BrandZ™ Global Top 100 brands that improved most in trust over the past decade and 10 brands that declined most in trust revealed that the trust improvers significantly outperformed the trust decliners in the growth of Brand Value, Brand Power and Brand Difference.

The 10 trust improvers came from many categories and include brands such as Apple and Domino’s Pizza. Not surprisingly, global banks dominate the trust decliner group.

Trust impacts Brand Value and Brand Power

Brand Implications

It’s possible to repair trust. And repaired trust makes a big difference to Brand Value, Brand Power and Difference. Conversely, when trust erodes – and is not repaired – both Brand Value and Brand Power are negatively impacted.

 

9. A World of Difference

Multinationals Different, and regionals, Salient

The brands that comprise the BrandZ™ Top 100 Most Valuable Global Brands are by definition the most international brands in the world. Not surprisingly, about two-thirds of the brands are multinational in the broadest sense, with businesses that extend across the globe. The businesses of the remaining one-third cross borders too, but primarily within the surrounding region.

Both kinds of brands achieve high value. But the average Brand Value of multinational brands is about 25 percent higher than that of regional brands. Multinational brands are older and involved in wider activities. Most interesting, multinational and regional brands achieve their Brand Power in contrasting ways.

Multinational brands excel in being seen as Different. That’s because wherever a multinational brand competes, it usually faces a regional brand leader setting the category standard. The regional brands trade on Salience because they’re present, widely distributed and heavily advertised. They’re Meaningful because of their local affinity.

Consumers also view the regional brands as more responsible, probably because the brands are more connected with the regions that they serve. Consumers view multinational brands as responsible too, but not to the same extent.

Strengths of multinational and regional brands differ

Brand Implications

It’s critical for the multinational brands to emphasize their difference and to make that difference relevant in each regional market in which they compete. To be more accepted in each regional market, multinational brands need to act responsibly and guard against the perception that big is automatically bad. Regional brands with aspirations to be multinational need to understand the basis of their meaningful difference, how exportable it is, and how it enables the brand to fit in or disrupt new markets.

 

10. Value Rises in Asia

Brand Value in China up 10-fold in 10 years

North America, home to the BrandZ™ Top 10 Most Valuable Global Brands, still comprises two-thirds of the total Brand Value of the BrandZ™ Top 100. That Brand Value increased over 137 percent during the past 10 years, a slightly faster growth rate than the Top 100 overall.

The Brand Value of brands based in the UK and Continental Europe also grew, but more modestly over the last 10 years. The value of brands from Australia and from Asian markets, including Japan and South Korea, also steadily appreciated.

During the same period, however, the number of Chinese brands represented in the BrandZ™ Global Top 100 increased from just one in 2006 to 14 in 2015, and the total Brand Power of Chinese brands increased 1,004 percent.

In just a decade, China developed from representing only minimal Brand Value in the BrandZ™ Top 100 Most Valuable Global brands to being the second center of Brand Value growth after North America.

Brand value growth velocity shifts to China

Brand Implications

The competitive landscape is about to change. Chinese brands have so far built value in their home market. But the examples of the technology brand Huawei, and Alibaba, the e-commerce leader, suggest that Chinese brands are following the same arc as Japanese and South Korean brands, moving from low-cost manufacturing to added value, and from regional to multinational. Most Chinese brands will expand first to other fast-growing markets, and these brands move quickly. Many brands from fast-growing markets have already become the key competitors against western brands at the local level. Some of them are turning into key global competitors.

BrandZ Top 100 2015

BrandZ Global 2014 Report Top 100 Report

Top 100 Chart

Top 100 Infographic


Methodology and valuation by Kantar Millward Brown


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