The five factors behind strength, vitality
Just as there are many contributors to human wellbeing, there are multiple factors that contribute towards meaningful difference in a competitive market, and which together help to support a healthy brand.
BrandZ data enables us to identify five key attributes shared by healthy, strong and valuable brands that each diagnose just how much a brand is delivering meaningful difference.
1. Good health starts with a purpose (making people’s lives better).
2. Brands must be innovative, ideally in a way that underlines that purpose, which means they’re seen as leading the way in their sector and shaking things up.
3. They must also be creative, with powerful, memorable advertising and communications.
4. They provide a great brand experience that meets consumers’ needs, and is available when and where consumers need it.
5. Over time, consumers develop a strong sense of love towards the brand.
Putting a price on good health
BrandZ analysts calculate a score on each of these five attributes for every brand assessed for the Indonesia ranking. They then create a composite score that indicates the health of each brand relative to the average for this market. This is called the brand’s Vitality Quotient, or vQ score.
The average vQ score of all brands in Indonesia is set at 100, so a score of 110, for instance, would describe a brand that is 10 percent healthier than average. 110 is the average vQ score of brands that make the Top 50 ranking. To look at it another way, we can say brands with a vQ score of 110 or above are healthy, those scoring 94 or below are frail, and those in between are OK.
Healthy brands, with the highest vQ scores, grow in value more strongly than those that are OK or frail. Of the 38 Indonesian brands that appeared in the inaugural ranking in 2015 and are still present in the Top 50 today, the healthy brands have grown by an average of 22 percent in brand value. OK brands grew, but only by 15 percent, while frail brands struggled, and declined in value by 2 percent. Brand health is a huge driver of brand value.
Unsurprisingly, many of the brands with the highest vQ scores are the same as those with strong meaningful difference scores.
Healthiest brands in Top 50 2018
Healthy brands account for the majority of the value in the Top 50 this year. Yet while the Top 50 is significantly healthier than the average of all Indonesian brands, it’s clear that many brands could do with a “check-up”. Half of brands in the Top 50 are just “OK”, and 8 percent are frail. Across Indonesia, 38 percent are in the danger zone for brand health.
Of the five elements that contribute to brand health and a high vQ score, experience is the one that, when high, is most closely linked to high-value brands, while the most loved brands tend to grow the fastest. Analysis over four years clearly shows, however, that the healthiest brands are those that nurture all five elements of vitality; neglect in any one area can be seriously detrimental to health.
Brands that have dropped out of the Top 50 since 2015 had an average vQ score of 100, while those new to the ranking in the past three years are much healthier – they have a vQ averaging 112.
Global health index
Indonesia’s most valuable brands compare favorably to top names from around the world on the BrandZ measure of health.
Spotlight on brand experience
In such a mobile-focused market as Indonesia, it is essential that brands consider how consumers access and interact with them online. But providing a great online experience is only part of what providing a great overall brand experience is about, even in Indonesia. Brands also need to be sure that they’re meeting consumers’ needs; this sounds obvious, but in the clamor to be doing exciting things with apps and social media, it’s something that is easily overlooked. Brands also need to do something unique. The combination of uniqueness, utility and a smooth online interaction makes a great experience. Miss any one of these elements and the experience suffers – as does brand value.
Spotlight on innovation
Innovation is crucial to ongoing relevance and future growth – most brands in Indonesia understand this is the case, especially in a fast-moving environment such as this. But what exactly is innovation? To many people, it’s synonymous with creativity, but BrandZ analysis shows that while creativity is a key ingredient of innovation, it doesn’t work by itself. Indeed, in addition to having creative flair, brands also need to be seen as leading the way, at least in their category if not beyond, and they need to be shaking things up. Without these two extra elements, creativity fails to grow into innovation, and does not have the same impact on brand value.