BrandZ report is a connector between all GroupM agencies: CVL Srinivas
The BrandZ Most Valuable Indian Brands analysis released by WPP and Kantar Millward Brown highlights the growing value of brands in India. Trust is an important key driver of brand value, with its impact on corporate performance.
What emerged from the report and the discussions that followed its launch, is that brands have to meet consumers’ needs to be valued. As Preeti Reddy, CEO, Kantar South Asia, put it, “If a brand satisfies a need that a consumer has, then it is a relevant brand for them. A need is really a consumer tension that a brand satisfies, and that’s why brands exist to, in some way, alleviate consumer tension.”
Agreeing with Reddy, David Roth, CEO EMEA and Asia, The Store WPP, noted, “The social networks have made things so complex and offer consumers an infinite choice of brands. One of the most important roles that brands will play in the future is by helping simplify the trouble of making choices by the consumer. That’s going to be one of the most important roles brands play in the future. The question will be how does a brand help my life become simpler and easier to navigate – this is why you need brands to be meaningful and different.”
CVL Srinivas, Country Manager of WPP, too, stressed on the importance of brands staying meaningful to their customers as well as being differentiated in order to stay on top of the game. On whether such a brand valuation exercise helps brands in their overall growth and ad spends, Srinivas said that while advertising and marketing had some role to play, it was not the only role. “You cannot correlate ad spends to brand value, as determined by BrandZ. Salience is one of the important factors. There are some brands who score well on salience because they have done good advertising, while there are some brands with high salience who hardly advertise. These brands use other avenues such as their service, branch presence, etc.,” he added.
Srinivas further said, “Most of the brand recall or brand value studies done in the market are purely based on consumer perception, which in a way link very heavily to salience, advertising and hence, this is an extremely holistic study. A very rigorous approach is followed in creating enterprise value. At the end of day, the more brand value you create, the higher is your corporate value. The brand valuation takes an intangible asset and accords it with a financial value. A lot of investment goes into building a brand from where it started out to where it is currently. Therefore, it is about the investment that has gone into building the brand and what the ROI has been. It is a very good metric for brands to measure the ongoing progress of their assets.”
Commenting on the BrandZ report, Srinivas said that it is a connector between all the GroupM agencies, even as it connects the CMOs and the CFOs.
Strong show by the BFSI category
Five of the top 10 most valuable Indian brands are banks and financial institutions, with HDFC topping the list for the fifth straight year. Commenting on this, Vishikh Talwar, Managing Director at Kantar Millward Brown, South Asia, said, “If you look at it in the financial companies’ context and the digital era that we are living in, digital consumption perhaps is highest as far entertainment is concerned, but the second most category that is happening is the financial sector, where the transactions are happening. In keeping with the changing demands of the consumers, banks and financial institutions have innovated faster and made the life of the consumer easier, right from the time the first ATM came into our country, to completely moving on to online operations and using apps. They have been far more sensitive to the consumers’ needs and changing dynamics than we think and that’s why they continue to be one of the strongest categories in the brand evaluation.”
FMCG holds firm
But this doesn’t mean that FMCG brands are slipping up, even though not a single FMCG brand features among the top 10 most valuable brands. As Srinivas pointed out, “I think FMCG is still the biggest sector in terms of Adex. 27 per cent of media and advertising comes from the FMCG sector.” He added that due to the high ad spends there was a perception that when any such list came out, FMCG brands should be a dominant part of it. “But, of course, BrandZ is a much more holistic study, which takes into account a lot of other factors,” Srinivas said.
Talwar added here, “In my last count, there are more than 20 FMCG brands in the BrandZ list. The evaluation involves attaching a financial value to the brand, which has two components – the financials and the brand context. If I were to look at just the brand end of the vitality quotient, then yes, in some of the cases FMCG is a stronger category than the others. But when you bring in the whole perspective of financials as well, the FMCG brands do come a little low.”