Building a successful brand requires an exceptional track record
in at least the following areas (B.R.A.N.D.I.N.G.): Be in touch
(senior executives to articulate the brand); Recognition (by the right
people), Adaptability, Needs (appeal to customer emotions), Delivery
(consistent quality), Indicators (measure and manage), Newness
(brand should be unique), and Great surveillance (for potential
infringements).
The top 5 global brands (Coca-Cola, Microsoft, IBM, GE and
Intel) have been in the top 5 or 6 positions since Interbrand started its survey in
2001. Three of the top 5 have decreased
in value over that time.
Building a global brand is not always the best strategy,
even for a global company. (It may, in
fact be a bad idea.) Critical success
factors for global brands include adapting the strategy to country-specific
situations and effectively communicating the brand across the world (both
within and outside the organization).
Comment
Building a successful brand
Intangible assets today comprise at least 80 % of the
market value of publicly traded companies.
Clearly brands make up a significant proportion of this.
A brand is a promise of consistent delivery of something
that the customer needs or wants. This
is also a good touchstone for setting brand strategy.
I came up with the mnemonic ‘B.R.A.N.D.I.N.G.’
to assist executive teams to remember the following key points:
Be in touch
– the senior executive team must clearly understand, and in fact continually
articulate the brand message both inside and outside the organization. As Interbrand states in their report
— in so doing, the senior management is giving the business strategy a
recognizable face.
Recognition
— obviously, a strong awareness of your brand is critical.
Actually, strong awareness of your brand by
the right people is the key.
This obviously consumes resources, which must be carefully
deployed. Consequently, choosing the
correct marketing approach and channels is critical.
Adaptability
– to local needs and situations will determine success in those areas. A brand which creates the wrong impression
or a negative connotation in a local area will not succeed and may damage the
organization’s reputation.
Needs
— top brands appeal at some level to human emotions. Understanding customer needs and wants and
making the right promises (that you will reliably meet) is a key part of the
strategy.
Delivery of
excellent products or services — your customers or clients must come to
rely on the delivery of the characteristics they are looking for in your
product or service.
Indicators
of performance — actively setting, measuring and managing performance
parameters and adjusting the strategy accordingly. Continually looking for new opportunities
to build brand value.
New (unique)
— at its best, a brand is an unmatched expression of an idea, which
customers or clients wish to be part of.
Great Surveillance — closely monitoring and acting on potential infringement of
rights.
The challenges of global brand strategy
The Interbrand survey focuses on brands that are
‘global’ — in their words, global brands are
‘available in many countries and, though they may differ from country
to country, the localized versions have a common goal and a similar
identity.’
Although it can be extremely successful, this is not always
the best strategy to adopt. A global
brand brings with it an extra set of challenges and costs associated with
achieving the consistency and scale of a global brand along with the intimacy
of a local brand. Choosing the right
communication strategy for each country (and culture) is a critical but
complex task.
Companies competing well in several markets may be seduced
into a global branding strategy which does not match the business strategy
for the organization. If this happens,
the company will find itself doing neither the local nor the global aspects
very well. Conversely, if it makes sense
for the business strategy to be global, then, of course, global branding is
also going to be critical.
The Interbrand report
For brands to be considered by the Interbrand report, they
must:
Originate from a publicly traded company
(presumably to allow access to the relevant financial data)
have at least one third of revenue generated outside the country of
origin
be a market-facing brand
have a positive Economic Value Added (EVA)
not have a purely b2b single audience with no wider public profile or
awareness.
As Interbrand admits, this excludes well known high-value
brands such as Mars which is privately held and Wal-mart which is not
sufficiently global.
The numbers
Here are some statistics from the report (most of which are
mentioned in the report itself):
The top five global brands:
are: Coca-Cola (US $ 67B), Microsoft ($57B), IBM ($56B), GE ($49B),
Intel ($32B);
were ranked (and valued) as follows
in 2001):
Coca Cola (1), ($69 B); Microsoft
(2), ($65.1B), IBM (3) ($53B), GE (4) ($42B), Intel (6) ($35B)
In other
words, 3 of the top 5 global brands have lost value since 2001.
Interestingly,
3 of the top 5 are in the IT business — no doubt because of the
‘readily global’ nature of that business.
The top 100 global brands:
are collectively worth US $ 1.1 trillion dollars.
originate from 13 countries
mostly from the USA
(51), Germany (9), Japan (8) and France (8)
In the 12 months since the 2005 survey:
the biggest losses were by: Gap (down 22% to US $ 6.4M), Ford (down 16%
to US $ 11 M), and Kodak, (down 12% to US $ 4.4M).
the biggest gains were by Google (up 46% to US $12.4M), Starbucks (up
20% to US $ 3.1M), and eBay, Motorola, and Hyundai, each up
approximately 18% to US $6.8M, US $4.6M, and US $4.1M respectively.