What is the role of Branding nowadays? Does it still make the difference to have a Big Brand during a crisis? How have the Top Brands performed against the rest of the Brands during the downturn?

I have just happened to read an interesting article from the Financial Times that shares some research done around Brand Performance based on the Brand Z 2012 Report from Milward Brown. Here you have the key findings:

• The world’s favourite labels are becoming more highly valued and influential
• Those in the top 100 league table – worth some $2.4tn – barely moved from their positions last year, repeating the stagnation seen during the recession of 2008-09.
• A strong brand is a great insulator against financial and recessionary pressures
• Overall, technology and telecoms brands account for just under a third of the top 100 brands and nearly half the value.
• Brands have gone further by linking themselves more directly to social and emotional causes, such as disease or famine relief in poorer countries through profit-sharing schemes and other donations.

• Last year, just under 60 percent of goods were bought on the strength of brand, according to Millward Brown’s survey of 2m-plus consumersin 31 countries. That compares with 43 per cent a decade ago, with much of the switch coming from once price-conscious customers. In mature markets, according to the management consultancy’s own survey on the subject, one in four shoppers say they are influenced by brand. But that number rises in emerging markets: to 30 per cent in India and 40 percent in China, for example
• People in mature markets are much more active players in taking more control of the relationship with providers, rather than just following a brand or product.
• Reflecting trends in the wider world, fast-growing emerging markets now account for 20 of the top 100, a 10-fold increase from the two that appeared in 2006.
• Top brands may be getting stronger, but the survey’s authors point to a dissonance between brand value and trust.

Interestingly, if we complement the previous research with the one from Brand Finance 2012, we find that:

• The Brand Value of the Top 500 has increased by 5%, compared to a -3% of the european ones.
• Technology firms also dominate the Top 10 and Top 100 rankings. Looks that the internet raise, together with social media and new technology adoption are clearly pushing up brand value of tech brands.
• Banking Brands show an unconsistent behavior: European Banking Brands go down while the ones from emerging market flourish.
• Luxurious lifestyle brands appear to be immune from the economic downturn.

Quick thoughts from going through these rankings:

• No matter how we build Brands, powerful branding still plays as a source of competitive advantage.
• Internet and Technology are one of the key drivers for brand building.
• Trust is a pending action point for Global Brands, specially in mature regions like Europe. Not working it in will eventually lead to significant Brand Destruction.
• Companies should continue to invest and monitor their brand performance. Even during downturns, it still makes the difference.

I look forward for your comments and views.

THINK DIFFERENT!!!

Ignacio Gafo

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