Key Findings and Future Trends

Key Findings from BrandZ™

Top 50 LatAm 2017 and Future Trends

1. Brand Purpose

Brands associated with a ‘higher purpose’ - beyond functional product benefits - have a competitive advantage. Many initiatives that are developed connect the brand with relevant social initiatives. Driving factors include changing customer values, often connected with generational lift. Please, look at the attached chart from Global BrandZ™:

In the region we can see a lot of examples of local icons with a positioning that reflects their brand purpose very clearly:

Corona’s strong Mexican heritage has allowed it to surpass geographic frontiers; it is currently sold in over 180 countries. The brand has a rich history of innovation, having been able to tie itself to Mexican culture through simple, yet iconic communications. It has created strong brand cues that relate it to relaxation and music.

 

The Brazilian company, passionate about cosmetics, has been successful in building an internationally renowned brand based upon its commitment towards society and its relationship with our environment.

 

Carbonated beverages company, original from Peru, underlines its national pride and symbols across its brand image, fostering a greater connection with the Peruvian gastronomy and a unique flavour.

 

A brand that has been part of the global fashion democratization trend since the very beginning, it has also been able of conveying Brazilians’ cheerful attitude, bright colour codes and diversity through its multiple and customized product offer.

 

The Colombian beer brand has positioned itself due to a consistent communication idea and slogan of “The brand that reunites all Colombians”, highlighting soccer and festive events as undeniable elements of the Colombian people and its passion for their country.

 

2. Customer Centric Brands

Regardless of the category, consumers have little problem in finding products and services that work well and are good enough. However, good enough doesn’t stand out from the competition. It certainly doesn’t command a premium price or keep customers returning for more. It is not enough to ask, does the product and service perform well? The key questions are: How does it make customer feel? Does the customer feel just ok? What would it take to make the customer delighted? In the following chart we can see the importance of Innovation for creating competitive advantage and increase in brand value (%) for brands (from Global BrandZ™ database). Latin American brands face a difficult economic environment, the local brands need to overcome the customers' expectations, shifting their business model to meet consumer needs and demands in a more relevant and disruptive way.

Brands such as Skol, Telcel, Televisa, Falabella and Bimbo are very good examples of Customer centric brands. For example, in the case of Skol – most valuable Latin American brand – who innovates in communications, events and packaging. Another example is in the Brazilian retail: Raia Drogasil (drugstore) and Renner (retail) are examples of brands that have innovated to become a customer centric brand. The drugstore chain implemented beauty consulting services in their branches. On the other hand, the retail company used Google’s virtual reality glasses, a low-cost portable cardboard device, during the launch event of its 2015 collection. These actions have created emotional relations with customers, strengthening the equities of these local brands. One evidence of these successful initiatives is the market capitalization of these companies, with both values increasing 71% and 33% from December 2015 to June 2016, respectively, against a 18% increase of the stock exchange index in the period.

3. Reputation Brings and Destroys Value

As Warren Buffett said:

“If you lose dollars for the firm I will be understanding. If you lose reputation for the firm, I will be ruthless.”

Warren Buffett, BIG/MRS conference 2014

Corporate reputation and trust has become an important asset of brands, and helps companies to deal with crisis moments. Trust is an extremely important attribute that is totally correlated to shareholder value. In the chart we show the importance of social responsibility in brand value (%).

Across Latin America many important conglomerates suffer some reputation issues, that affects shareholder values such as Carlos Slims’ companies, BTG, Petrobras, Vale. The region has several cases where the brand value was impacted due to corruption or bribery issues harming companies' reputation. The same applies to banks. In the past, they used to be very important in the region, now almost all Banks dropped tremendously in brand value as a consequence of a perception of risk in the industry as whole. Some good news came from Mexicans Cemex and Bimbo and Chilean Copec.

 

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