BrandZ™ success drivers increase in importance as India matures
A recent analysis of the BrandZ™ Top 100 Most Valuable Global Brands over the past 10 years revealed a series of brand characteristics and behaviors that drove strong brand value appreciation over a difficult decade and are critical for future brand value growth.
These success drivers complement the metrics that comprise brand equity – Different, Meaningful and Salient, and the attributes that produce competitive advantage - Premium, Power and Potential.
The most important of these drivers for Indian brands are Brand Purpose, Brand Proposition, Innovation and Love. These drivers will become increasingly relevant as the Indian market matures.
They identify actions brands need to take to remain competitive. Indian brands now lag global brands in most of these future-focused drivers, a finding that correlates with the relatively low Potential score of Indian brands.
Brand Purpose measures the extent to which consumers perceive a brand as has having more than a commercial reason for being. Influenced by millennials, today’s consumers prefer brands that are in business not only to make money, but also to improve the life of the consumer and even make the world a better place.
Brand Purpose becomes especially important as a differentiator in mature markets where brands have achieved rough parity in functional and emotional benefits. For this reason, Brand Purpose will become increasingly important in rapidly maturing India.
Brand Purpose also will become important in India for a particularly Indian reason. The government and citizens of India expect it, as indicated by government-mandated Corporate Social Responsibility (CSR) spending.
The BrandZ™ India Top 50 scored 110 in Brand Purpose, which is a strong result and higher than the 100 score of an average brand, but far behind the 129 score of the Global Top 50.
These three brands in India achieved the top Brand Purpose scores: Colgate (135), tire maker MRF (135) and Kingfisher beer (131). The global leaders scored dramatically higher: IBM (337), Apple (310) and IKEA (248). Each of those global brands is clearly associated with improving people’s lives or changing the world in positive ways.
Brand Proposition is the clear, resonant idea that encapsulates a brand. When Brand Proposition is expressed with compelling advertising, brand value grows exponentially.
Over the past 10 years, the brands that consumers identified as having a strong Brand Proposition and compelling advertising increased an average of 168 percent in brand value. In contrast, brand value increased only 21 percent on average for brands lacking a strong Brand Proposition and compelling advertising.
The BrandZ™ India Top 50 scored a respectable 109 in Brand Proposition, but much lower than the 127 score reached by the Global Top 50. The India Top 50 Brand Proposition leaders are tire maker MRF (136), Colgate (136) and Indian Oil (128). IBM (303), Apple (267) and FedEx (264) lead the global brands.
INNOVATION AND LOVE
Innovation and Love both contribute to brand equity. Real Innovation, or setting trends, is one of the aspects the Different component of brand equity. Love is one of the aspects of Meaningful, another component of brand equity.
Both Innovation and Love tend to be more important to building brands as markets mature and success in crowded categories requires being perceived as Different in a Meaningful way from the competition.
The Indian market is heading toward that level of maturity, but for now its brands lag in Innovation and Love. The BrandZ™ India Top 50 Innovation score of 105 contrasts with a Global Top 50 score of 120. Similarly, the Indian Top 50 scored 113 in Love and the Global Top 50 reached 131.
Brand Purpose in India is already a civic duty. It’s about to become a brand building imperative. Indian consumers expect the brands they favor to actively participate in building a more prosperous and equitable society.
As the Indian market quickly matures, brands will need to sharpen their Brand Proposition to remain competitive. The most successful Indian brands will marry a strong Brand Proposition with compelling advertising.
Closing the Innovation and Love scoring gaps is the next stage for Indian brands and it’s important for several reasons. First, a more competitive market will require greater differentiation. Second, it will be difficult to grow Brand Power or Brand Premium without being strong in Innovation and Love.
Finally, Innovation and Love form a virtuous circle. Innovation drives Love. And loved brands sustain loyalty even as they swing between periods of intense Innovation and iterative progress.