Companies

For India Inc, economic power fails to translate into brand clout

Our Bureau New Delhi | Updated on March 12, 2018

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For India's corporate giants, neither their own growing economic power nor the leverage provided by India's increasingly powerful economy appear to have translated into brand value.

Indian brands have barely registered on a new, global ranking of the world's most powerful and valuable brands.

Only two desi brands — Airtel (rank 71) and ICICI Bank (63), figure in the top 100 rankings of WPP company Millward Brown's annual ‘BrandZ Top 100 Most Valuable Global Brands' study.

The rankings

In fact, even these two are not in the top 50. The top 10 global brands are dominated by American brands. And in Asian Top 10, eight are Chinese brands, reflecting the new shift in economic power in the continent.

The top brand worldwide, for the second year in a row, was, not surprisingly, Apple. The brand rose 19 per cent in value and is now worth $182.9 billion.

The surprise number two was infotech giant IBM, which grew 15 per cent in value to $115.9 billion and pushed Internet omnibrand Google to third place.

The study was completed ahead of Facebook's IPO and subsequent listing. Nevertheless, Facebook zoomed an astonishing 74 per cent in brand value in a single year.

Although it was the fastest gainer in the study, its estimated brand value of $33.2 billion could only fetch it the 19th spot in the study. In the previous year, it had ranked 33.

With the exception of Japan's Toyota and NTT DoCoMo, a telecom player, and Korea's Samsung, the Asian ranking is made up of Chinese brands. Asia topper China Mobile, in fact, has emerged as the world's tenth most valuable brand this year.

The study, commissioned by WPP and conducted by brand research specialist Millward Brown Optimor and now in its seventh year, identifies and ranks the world's most valuable brands by their dollar value, an analysis based on financial data, market intelligence and consumer measures of brand equity.

Between 2006 and 2012, the total value of the BrandZ Top 100 rose 66 per cent and is now worth $2.4 trillion.

“Brands are an insurance policy for businesses,” said Ms Eileen Campbell, Global CEO of Millward Brown. “Despite a prolonged period of economic stress, political uncertainty and natural disasters that buffeted brands across many categories, the value of the world's leading brands keeps rising across many categories, sustaining and nurturing businesses.”

Tech power

The key finding of the study was the growing power of technology. Seven of the top 10 brands worldwide are technology or telecom brands, with only fast food giant McDonald's (fourth place), Coca-Cola (sixth) and cigarette maker Marlboro (seventh) getting in the way.

Another key finding was that regardless of the category a business is involved in, mobile technology is likely to play some part in it. Mobile business appears to be almost recession-proof, emerging as one of the few things consumers do not wish to cut back or consume less of.

Shareholder value

Another insight was that stronger brands almost always translate into better shareholder value. A ‘portfolio' of stocks comprising the most valuable brands of the BrandZ Top 100 has outpaced the S&P 500 index.

While the total return on investment (ROI) for all companies in the S&P500 index was just 2.3 per cent, the BrandZ Portfolio provided a 36.3 per cent ROI, the study showed.

The study combines measures of brand equity based on interviews with over 2 million consumers globally about thousands of global consumer facing and business-to-business brands, along with the financial and business performance of each company to separate the value that brand plays in driving business revenue and market capitalisation.

BRICS and brands

Consumers in the BRIC countries are more brand loyal compared with consumers in the US and Western Europe. They also appreciate value, according to TGI research, which found that many agree with the statement, “It is worth paying extra for quality goods.”

Word of mouth is significantly more important in BRIC countries. People are more likely to ask advice before making a purchase, a behaviour that could reflect lack of experience with certain merchandise or simply an inclination to conduct more diligent research before spending money.

> Raghavan.s@thehindu.co.in

Published on May 24, 2012

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