Living in Uncertain Times

OLIVER PACHT
Director,
Kantar Vermeer
Oliver.Pacht@kantarvermeer.com


A Deeper Look at How Mexican Companies Need to Push the Boundaries of Risk

Throughout the last decade, BrandZ™ has become one of the most influential reports on how consumers around the world think of brands, feel about products and services, and choose to spend their money. For sure, some brands are purely aspirational, such as the ones we are used to seeing in luxury categories like Beauty and Wellbeing. Others are part of our everyday consumption, whether at home, school, university, our workplace or commuting. Technology is increasingly driving the biggest revolution in our society and directly influences the way we stay in touch, engage and interact with a brand.

These influential touch points, such as the ones driving our digital ecosystem (see Uber, Google or our ubiquitous smartphones) are all part of what we call brand or customer experience; the actual delivery of a companies’ promise, its reputation and differentiating associations that it claims it can provide in a competitive landscape. Consumers have the power over the purchase decision, but brands have the capacity to influence such decisions.

When measuring brand strength, it is important to distinguish two key components: brand equity and brand value. When collating consumers’ perceptions about a brand, an industry or a specific category, we should refer to equity only. When considering the brand as the single, most important intangible asset of a company, we should always refer to brand value, financial value. This is precisely what BrandZ™ Brand Valuations shows year on year; how enterprises investing in their brand and/or brand portfolios, consistently grow stronger and minimize risk.

THE VALUE OF VALUATION

Valuation is important for another reason: if you own or manage a business that is likely to be sold at some point – and if you understand valuation – you can run the company to maximize its value to a potential acquirer. You will know that acquirers look closely at specific financial metrics and mostly ignore others. You will not fall into the trap of thinking that your business is just as valuable to anyone else as it is to you. You will know how to assess and furthermore, manage, its potential. A potential largely based on how stakeholders relate to your brand’s proposition, your offer, your service, your communications, your customer journey and so on.

This year’s BrandZ™ Top 30 Most Valuable Mexican Brands shows how testing these times are. There are very few cases that have seen their brand value significantly increased, whilst the Top 30 average shows a brand value change of -11%. It is largely the financial services and the telecommunications providers driving this number. Reliant on their historic lack of competitive aggressiveness, companies require more than ever a disruptive, customer-centric redesign of their commercial and go-to-market strategies. With an increasingly greater choice of players reinventing traditional categories with ‘beyond the sector’ best practices, customers are now empowered to change the status quo. Companies failing to anticipate these changes expected and demanded by customers are very likely to remain on the edge of irrelevance.

SIX OUT OF TEN

The good news is that, despite all of this, there are some great examples that showcase the way forward. Six Mexican companies rank among the Top 10 players in the BrandZ™ Top 50 Most Valuable Latin American Brands 2017 (also adding to the four most prominent risers), a region with an ongoing status of uncertainty – economic, social, political, technological, environmental. Such uncertainty is defining the volatility in markets like Brazil, the difficulty for customers in choosing transparent and reliable product and service providers, or the ambiguity of where to play and how to win in order to deliver sustainable business growth. The VUCA acronym (Volatility, Uncertainty, Complexity and Ambiguity) identifies general systemic and behavioural failures, which are also characteristic of organizational failure.

In my little life-experience working and living in Mexico, I have witnessed how organizations are not focused enough on orchestrating an integrated, holistic and whole-brain approach towards improving customer-centric growth. For sure, if you ask them, customers are always at the heart of what they do, but the way companies are organised, led, incentivized and measured to deliver such customer-centricity is far from customers’ actual expectations and needs. It comes as no surprise that beer providers have the most valuable brands across categories, where emotional delivery is much easier to fulfil - although here international competition is growing stronger than ever. Corporations have a desperate need to reinvent the way they engage with customers and beyond that, the way they transform into truly influential propositions.

With each year and each BrandZ™ ranking report published, new insights emerge that help companies better equip themselves to learn from the present and build for the future.

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