Sector giants come top of the table
The value of the BrandZ Top 30 Most Valuable Italian Brands 2018 is highly concentrated at the top of the ranking, with the number one brand alone – luxury legend Gucci – accounting for 19 percent of the total brand value of the leading 30 combined.
This is a pattern we see in other European markets; the sheer power of the leading Italian brands is even more accentuated than in the UK, Germany and France – fairly comparable economies – though the concentration is slightly higher in Spain. The top five Italian brands represent 17 per cent or only a sixth of the places in the ranking but punch well above their weight, delivering more than half of the value of the Top 30 brands put together.
In other European markets, global household names – brands like Zara, SAP, Vodafone and HSBC – have come top of the national rankings. In Italy, there is more of a mix of internationally established brands, and strong names that lead in their field at home but are little-known abroad.
There is less concentration at the top of the Global Top 30 ranking because there are so many global mega brands, and their scale is more evenly matched.
Categories and brands
With high-end Italian fashion brands dominating global catwalks and international shoppers’ wishlists, it’s no surprise that the luxury category is the most valuable in the BrandZ Italian Top 30 ranking. Luxury brands account for more than a third of the total brand value of the entire Top 30 – something we have not seen in any other BrandZ country ranking aside from France – and a distinguishing feature of the Italian economy as well as the BrandZ list. Indeed, in the most recent BrandZ Global Top 100 ranking (launched in 2017), luxury only accounts for 1 percent of the Top 30 brands’ combined value.
Food and drink are among Italy’s other great exports, and this is another category that puts in a strong showing in the BrandZ ranking. Chocolate, coffee, pasta and aperitifs provide the flavor of Italy and contribute 15 percent of the Top 30’s value. It is a distinctly Italian feature of the ranking that brands as diverse as Ferrari, Ferrero, Fiat and Ferragamo make this inaugural Top 30.
Infrastructure brands that make the country tick – banks, insurers, energy brands and telecom providers combine to contribute just over 30 percent of the ranking’s value. And while there is one retail brand in the Italian Top 30, the supermarket Esselunga, this is a relatively small showing from a category that tends to be a big player in European markets and in the Global BrandZ rankings. This perhaps reflects the retail market in Italy, which is still relatively diverse, especially outside major cities, and features many individually owned shops as well as regional and national chains.
Moving with the times
It is rare for a tire brand to make the national BrandZ rankings of a country, but Pirelli has not just scale and financial strength on its side, it also has a strong image in the minds of consumers. It stands for something beyond the rubber between your car and the road; it stands for high-end styling, partly thanks to a close association with luxury Italian carmakers and with Formula 1 motor racing. The brand has also worked for decades on a reputation beyond its category, through other design-related products, and is known around the world for its annual Pirelli calendar. While the calendar began as a collection of swimsuit pinups for mechanics and petrol heads, albeit beautifully photographed, it has evolved into a statement of the times. The 2016 Annie Leibovitz-photographed series featured women celebrated for their accomplishments beyond their looks, and the 2018 features an all-black cast in a re-imagining of Alice in Wonderland. This reflects on the brand’s desire to be associated not just with performance and innovation but also culture, creativity and design.
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, Ferrari and Eni have quite similar brand values, and appear in sixth and seventh places in the Italian Top 30. But while Eni derives most of its brand value from its financial strength, its Brand Contribution score is quite low (one out of five). Ferrari 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, Eni is a much bigger business, but Ferrari beats it in the ranking thanks to its strong presence in the minds of consumers. Similarly, Barilla is a very strong brand in the mind of consumers, with a high Brand Contribution score, but is a much smaller business financially than either Ferrari or Eni, so scores further down the Top 30 ranking.
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 Italian Top 30, the brands with a high Brand Contribution score (or four or five out of five), have an average Power score that’s more than 30 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 volume sales.
High Brand Contribution scores don’t just come from the categories that might seem naturally more appealing to consumers – the sexy categories like fashion and fast cars, although there are strong performers in this area from these categories, too. A supermarket brand, soft drinks, pasta and breakfast spread are all in the Top 10 Italian brands in the 2018 ranking for Brand Contribution, proving that category boundaries are no barrier to building a strong brand.
Good as gold – Ferrero Rocher
The gold-wrapped balls of hazelnut chocolate that have become instantly recognizable as Ferrero Rocher have been made and packaged in the same way for nearly 40 years. But the brand is just as relevant to the shoppers of today as it was decades ago, and in fact now has widespread appeal to consumers across much of the world. It has strong associations with Christmas, gift-giving and travel – not to mention with ambassadors’ receptions, thanks to a high-impact ad campaign that began in the 1980s. The range has grown to include the white chocolate Confetteria Raffaello and the dark chocolate Ferrero Rondnoir, but at its heart, Ferrero Rocher remains an indulgence and one of the best-known premium chocolate brands in the world.