BRAND CONTRIBUTION: Turbo-charging value by investing in brand
There are some brands that punch well above their financial weight in the BrandZ rankings by focusing on making meaningful connections with consumers, being seen as different in their category, and ensuring through their communications that those differences are well understood.
These efforts combined form a sort of “special sauce” that adds real zing to the influence and value of brands, and we call it Brand Contribution. Brand Contribution is scored on a scale of one to five, and it is a measure of the proportion of brand equity over other in-market aspects (such as promotions or distribution). Value can of course come from in-market activity, but that from brand equity is particularly hard for competitors to replicate. This score is what helps make BrandZ a distinct and important ranking; BrandZ is the only brand valuation methodology that includes the customer view obtained through in-depth consumer research – conversations with the people who know and buy these brands.
Businesses that focus on brand development can supercharge their performance in the BrandZ rankings. For example, DHL and Siemens have quite similar brand values, and appear in fifth and sixth places in the German Top 50. But while Siemens derives most of its brand value from its financial strength, its Brand Contribution score is quite low. DHL has a smaller financial footprint but pushes its way up the ranking with a powerful Brand Contribution score of four out of a possible five. Put simply, Siemens is a much bigger business, but DHL beats it in the ranking thanks to its strong connection to consumers.
Brands with high Brand Contribution scores also tend to rate well on the BrandZ measure of Brand Power, which tracks consumers’ predisposition to choose one brand over others in their category. In the German Top 50, the brands with a high Brand Contribution score (or four or five out of five), have an average Power score that’s more than 25 percent higher than those with a low Brand Contribution score. This emphasizes the importance of investing in a strong brand – it has a direct impact on consumer choice and sales.
High Brand Contribution scores don’t just come from the categories that might seem naturally more appealing to consumers – the sexy categories like cars and technology, although Germany’s premium car brands are strong performers in this area. A supermarket brand, home appliances, a mail delivery brand and several beers are among the Top 10 German brands in the 2018 ranking for Brand Contribution, proving that category boundaries are no barrier to building a strong brand.
Sticking with a good thing – Beck’s
Germany’s biggest selling beer around the world has been brewed in the same way, according to the same simple recipe, since 1873, but is just as relevant to young drinkers today as it was back then – if not more so. The brand, with its distinctive green bottle, has grown well beyond its home city of Bremen and is now sold in more than 85 countries; it enjoys universal appeal thanks to its premium positioning as a drink to share with groups of friends. This theme is timeless and crosses borders, though the packaging of the idea in Beck’s communications is regularly updated. The current campaign promises: “With you, every moment can turn into something extraordinary”.