BANKS ON TOP
by Ellis Malovany
Not surprisingly, banks dominate the inaugural BrandZ Top 40 Most Valuable Australian Brands. Nine of the most valuable brands are banks, for a total banking sector value of $52.6 billion dominating all industries and sectors with 51.7% of the Top 40’s value. The “Big Four”, Commonwealth, ANZ, Westpac, and NAB together comprise 45.7% of the Top 40 value and make up four of the top five most valuable brands in Australia.
In geographically isolated markets, it’s not uncommon to find a few main competitors dominating infrastructure sectors like telco and energy. Australia’s infrastructure value is concentrated in Telco by Telstra and Optus both top 10 brands along with Foxtel and iiNet. Throughout the world, telco brands have benefitted from investment in new technologies with Australian telco giants following suite with increasing mobile data capacity, and entry into areas like the connected home. In energy, Origin (#10) and AGL (#11) have risen to the top along with EnergyAustralia (#23), resulting from their dominance in fossil and coal-based energy sources, as well as meeting financial and social pressures to convert to renewables.
The retail category delivers 11 brands to the Top 40, the most of any category, and its aggregate value is second only to Banks. Woolworths and Coles are Top 10 brands and are joined in the Top 40 by leaders in retailing subcategories like DIY, electronics, and liquor. Retailers are a core of Australia’s economy and perhaps are under the greatest threat from disruptive foreign competitors like Amazon offering attractive global products and technological supremacy in the individualized shopping experience.
Alcohol brands have been a part of coming of age and social gatherings for many decades. This social currency has led to several globally successful alcohol brands such as Moutai and Budweiser being ranked in the BrandZ Global Top 100 Most Valuable Brands. In the Australian Top 40 several alcohol brands have emerged, led by beer brands. Ironically, Foster’s (ranked #19th) is the most valuable Australian alcohol brand, driven entirely by the brands popularity in the UK. Iconic brands like Victoria Bitter, Crown Lager, and Bundaberg have strong roots over many years, and have built strong brand loyalty across multiple age groups. The alcohol category is tied with telecoms in delivering 5 brands into the Top 40, 3rd amongst all categories.
In insurance, NRMA is the category leader, ranked 18th and nearly 30% more valuable than the only two other ranked insurance brands combined, i.e. AAMI and RACV. NRMA’s long history and dominance in New South Wales, Australia’s most populous state, have helped the brand achieve this stature.
Although Australia thrives on tourism, global airline competition is fierce. Qantas is considered by many the most global Australian brand, delivering Australian culture and warmth across the world. Ranked #15, it is the dominant leader in the category with its low cost subsidiary brand, Jetstar just making the cut at #40.
Not well represented in the Top 40 are food and drinks brands...many of the most popular food brands in Australia are from well-known global giants such as Nestle, Kraft, Coca-Cola and Pepsico. Out of the local brands only Arnott’s made the Top 40, as a result of its deep embedment in Australian culture and strong brand contribution. Fast Food, which has become a category driven by technology and convenience, is also dominated by global multinationals who leverage their vast technology investments in global markets. Hungry Jacks ( a licensee of Burger King) leads all other Australian fast food chains, ranking 34th.
Brand Value stems from strong financial performance and strong brand equity, the value generated by the brand’s ability to increase purchase volume and charge a premium. For many established Australian brands with more moderate growth projections, focusing on building brand equity can be an effective way to build Brand Value, which in turn is what gives brands staying power.
Brands can build their Brand Value by:
- Improving Brand Equity. Brands with “High” Brand Equity have increased value five-fold over brands with “Low” Brand Equity.
- Build value through innovation. Significant improvements can come in many forms. Manufacturing innovation can redefine how consumers use your product. Technological innovation can help reduce hassles and create new efficiencies. Marketing innovation stems from a better understand of the buying and usage habits of customers; brands can add value by convincing buyers to pay a premium.
- Meeting needs, in particular shifting needs inherent to sectors that thrive on innovation, requires clear communication, both of purpose and of difference. Brands in more saturated must clarify unique positions through clear, compelling, and meaningful communication.