BRAND CONTRIBUTION adds long-term brand stability
Being different makes the difference
There are some brands that punch above their weight in the BrandZ™ rankings because they are boosted by having a strong score on “Brand Contribution”.
Brand Contribution is an assessment of how effectively a brand differentiates itself from its competitors, generates desire and cultivates loyalty. It is derived from extensive consumer research, ensuring it is rooted in real-life consumer perceptions, and is one of the measurements included in the calculation of brand value.
The Brand Contribution score, measured on a scale of one to five (five is the highest) is one of the key differentiators between BrandZ™ and other brand valuation methodologies. Those brands with high scores tend to be resilient to challenges in the market. They predispose consumers to choose their particular brand or pay more for it, purely based on the perception people have of it.
How it adds up
Two brands that have a similar brand value in the Top 30 ranking may have very different Brand Contribution scores. For example, Massimo Dutti and Repsol take places eight and nine in the Top 30 ranking, with very close brand values. In the case of Massimo Dutti, its high Brand Contribution (four out of five) creates a multiplier effect on the financial contribution of the brand. Repsol has a much lower Brand Contribution score (one out of five), but is a much bigger corporation.
Similarly, SEAT and Bankinter are quite close in brand value, but SEAT’s value is much more brand-driven than Bankinter’s. SEAT’s strong brand propels it up the ranking, whereas Bankinter’s financial strength is what fuels its brand value. They finish next to each other, in positions 29 and 30, in the 2017 ranking.
Top 5 Spanish Brands by Brand Contribution
The leading five brands for brand contribution come from four different business sectors.
These brands are valued by consumers, frequently used, and have made themselves an important part of people’s lives. All five have a long presence in the market, and during that time have built up a good bank of consumer trust. They deliver consistently on their promises, and have made an emotional connection with consumers.
Boosting Brand Contribution
There are three factors that go into measuring Brand Contribution that we know make people buy more and pay more for a brand.
A meaningful brand meets people’s needs and generates both rational and emotional affinity. It makes people’s lives better, often in a small way but in a way that’s clearly defined.
This is about both being different and feeling different to the competition, and is what gives a brand its competitive edge. It is the quality that helps people decide to buy a brand and justify its price. Shoppers are more likely to choose brands they consider to be different in a meaningful way.
Brands that are salient are well known by consumers and come to mind fast when someone thinks of a category. This is a key lever of growth for brands.
Time to stand out
Leading Spanish brands perform better than average brands in Spain when it comes to being meaningful and being salient. Consumers have heard of these brands and know what they stand for. What Spanish brands tend to lack is clear differentiation – something that makes them meaningful in a way that sets them apart from other brands in their category.
In fact, the Top 30 Spanish brands are no more different in consumers’ minds than the average brand in Spain. This is in sharp contrast to the Top 30 global brands, which are 34 percent more different than average, and marks a clear area on which even the most successful Spanish brands should be focusing.
Spanish brands also tend to be perceived as being expensive compared to their worth. This is dangerous territory for brands to occupy; brands that don’t justify their price are vulnerable to competition, and when this is accompanied by a lack of differentiation, consumers have little reason not to switch when they are offered a cheaper alternative.
Brands that score well on meaningful difference have higher brand values and therefore rank higher in the Top 30 Most Valuable Spanish Brands. Those brands in the ranking that perform well on meaningful difference have an average brand value more than six times that of the brands with the lowest levels of meaningful difference.
To understand what a “meaningfully different” brand looks like, it is helpful to look at the brands that perform best on this measure in Spain. In this chart, we see the top performers, including many global brands, which do not have Spanish origins and therefore are ineligible for inclusion in the Top 30 Most Valuable Spanish Brands, but are a useful illustration of meaningful difference in action.
Ways to win
The role of brand contribution in building strong, valuable brands is evident in 12 years of tracking the Top 100 Most Valuable Global Brands. Brands with a brand contribution score of either four or five out of five grew their brand value by 177 percent during the period, while those with scores of three grew by 136 percent. Brands with the lowest brand contribution scores – either one or two out of five – actually declined in value by 12 percent. This underlines the importance, power and potential payback from investing in a strong brand.
Theory in action
The BrandZ™ data shows it’s not just the inherently exciting categories that produce the strongest and most valuable brands. All brands that work on being meaningful, different and salient can drive sales and shareholder returns. The insurer Mapfre is among the top-ranking brands in Spain for Brand Contribution, thanks in part to its association with sport over many years, and Cepsa, the oil and gas company, also stands out in its field and has earned a special place in consumers’ minds.