Businesses in India should focus on branding

Grapgh

Summary

  • Technology brands like Apple and Google are dominating in Brand Valuation, but cannot stay on top without new innovations and design.
  • This list is based on three parameters: economic profit, role of brand and brand strength.
  • Personal technology brands like Apple and Google have pushed the leader of the last 13 years, Coca Cola, to No. 3
  • Google, Coke and McDonald’s have a brand value higher than brand revenue.
  • Apple and Google do two things better than most brands: they are great at design and superb at doing the thinking for the consumer. Their entry into wearable gadgets like watches and glasses will test these strengths.
  • In the Indian list, the brand value is significantly lower than brand and business revenue. Brands need focus and consistency. Brand longevity without innovation may lead to brand respect but does not create brand value.

Facts

  • The top 100 in the list have 55 brands from the US, 9 from Germany, 7 each from Japan and France.
  • Nokia is now 59 after being in top five for few years.
  • Blackberry if out of 100
  • Philips at 40 and Sony at 46
  • No Indian Company yet in Top 100 Global List.

Discussion:

  • Discussion on Technology brands versus FMCG brands.

FMCG:

  • FMCG brands like Coke work on habit, distribution and owning consumer mind space. This combination cannot be copied easily and, hence, brand leaders in FMCG tend to be leaders for decades.
  • A good example is Thums Up in India, which survived due to consumer loyalty, even when Coke tried unsuccessfully to kill it. In FMCG, innovation is slow and gradual, unlike in technology where it is disruptive.

Technology:

  • For Technology bands, missing an innovation in technology puts a company back by at least five years. Market shares swing in decimal points or small numbers in FMCGs over a year, while they can swing by more than 10 or 20 points in a few months in technology.
  • In the Indian list, the brand value is significantly lower than brand and business revenue in each case. It tells us that a collection of businesses doesn’t make a powerful brand but a collection of brands makes a powerful business.
  • We in Indian business value metrics like revenue, profit and market capitalization. Brand value, which is strategic, is common to all three and, hence, worth growing. Indian businesses must spend energy on branding. India is a huge consumer market.

Reference: “Why Indian businesses must spend energy on branding” The Economic Times, 7th November 2013

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