LatAm 2015: OVERVIEW | THOUGHT LEADERSHIP
It’s getting harder to enter – and remain in – the BrandZTM Global Top 100 Most Valuable Brands. A total of 58 of the brands ranked in 2006 are still there, while 42 have been replaced.
Many of the new brands within the ranking are from fast- growing markets. The number of Chinese brands in the BrandZTM Global Top 100 has risen from just one in 2006 to 14 in 2015, and their total Brand Power has increased 1,004%. Latin American brand Natura appears in the personal care sector rankings, and Skol and Brahma rank in the beer category. The majority of these local brands are not yet truly globalized, but they’re ambitious and growing in value extremely fast – and they will change the global competitive landscape.
In the past 10 years Millward Brown has researched and valued over 100,000 brands across 50 country markets,
to identify the drivers of long-term brand value growth.
It is these lessons that will equip brands – especially the aspiring newcomers from the fast-growing markets – to be the winners over the next 10 years.
BEING DIFFERENT MAKES A DIFFERENCE
In a world of so much product sameness, brands which consumers view as “different” achieve higher value. Those that have remained in the top half of the BrandZTM ranking over the last 10 years are scored very highly on “difference”
by consumers, and have grown 124% in brand value. In contrast, brands in the bottom half of the ranking score lower and have increased only 24% in value.
Difference can enable a brand to command a higher price and yield a higher profit. It isn’t just about the product; differentiation can also be found through purpose, personality, values, and design. Category leaders like Coca-Cola and BMW need to guard leadership and keep refreshing their brand messages
to be always unique. Compared to the established multinational brands, the local brands from fast-growing markets are relatively weak on “difference”, how to develop a differentiating proposition that is meaningful to the consumers would be the key question to answer.
CLEAR PURPOSE FAST- TRACKS BRAND EQUITY
It’s not enough to be different for the sake of it. To be meaningful, brands must have a strong purpose that goes beyond “making money”, and is inspiring and relevant to consumers. This means striving to improve people’s lives in some way – making them easier, healthier or more interesting – and if it’s a “higher purpose” that contributes to making the world a better place, all the better.
In the digital era in which difference is harder to achieve, for many brands with comparable functionality and emotional appeals, purpose can become a true differentiator and accelerate brand equity growth.
INNOVATION DRIVES SUCCESS
Consumers see brands that set trends as different and as leaders, and these perceptions pay dividends. Over 10 years, the brands that scored highest against the BrandZTM “trend-setting” metric increased an average of 161% in brand value, while those that scored lowest increased only 13%. Many of these brands are from the technology sector, but we also see Chipotle, Nike, UPS and PayPal scoring highly.
To be a trendsetter means anticipating the directions consumers will want to go in, identifying the gaps where needs are unmet, and getting there first. This is a risky strategy, which a brand can mitigate by knowing their consumers well.
LOVE ISN'T ALL YOU NEED - BUT IT'S POWERFUL
Love has a multiplier effect. Over the past decade, the rise in value for brands scoring high in the BrandZTM “love” metric was 10 times greater than that of their low-scoring rivals. Love usually follows great performance and a great experience – and it’s amplified by social media. Brands from across categories score highly on love, from Visa to KFC. They have one thing in common: they try to understand the world from the customer’s point of view.
Innovation and love form a virtuous circle. A true innovation that makes people’s lives easier can quickly generate love,
but even the most trendsetting brands swing between periods of intensive innovation and iterative progress, when love provides a ”cushion” until the next wave of creative development. Microsoft, a trendsetter now, could do with a dose of love to balance this out.
To remain competitive through the next decade, brands from fast-growing markets, and those aspiring to join their ranks, should stop seeing brand building as a cost and view it as an investment in future financial success. They need a holistic brand building system that focuses on every aspect
– from communications to CRM to creating the whole experience – to make consumers’ lives better, build meaningful difference and embrace disruptive technologies. Brands are a fabulous investment, and need to be nurtured and cared for accordingly.