BrandZ Report bridges the gap between CMOs and CFOs: CVL Srinivas, WPP
Key takeaway from this year's report is that brands need to take digitisation and trust very seriously to be valued by consumers
Brands need to take digitisation and trust very seriously to be valued by consumers, said WPP and Kantar Millward Brown top executives at the launch of the fifth annual WPP and Kantar Millward Brown BrandZ™ Most Valuable Indian Brands study.
Summarising the findings of the report, CVL Srinivas, Country Manager of WPP, said, “What is clearly coming out of the study over the last few years is that brands that stay meaningful to their customers, are differentiated, and have saliency are the ones that not only stay on top but also consistently top the list. One of the sub-themes that is coming out strongly these days is that brands need to build trust with consumers.”
“Digital cannot be an afterthought in the marketing strategy and has to be an integral part of a brand’s strategy,” said Vishikh Talwar, Managing Director at Kantar Millward Brown, South Asia.
Brands are the most valuable asset for any company and there is no better time to invest in brand building, Srinivas felt. “Creating brand value leads to a huge amount of enterprise value. In this day and age when most companies are under pressure, we believe that there is no better time than now to look at brand building as a serious investment exercise just because of the enterprise value it can create,” he said.
At a time when the CFOs are making the decisions on investments, BrandZ is a ready reckoner for clients on brand building as it “bridges the gap between the CMO and the CFO,” Srinivas said. “This is the only study of its kind that puts a tangible value to a brand and helps make the case internally for investment."
Srinivas added that the report ties together all the businesses across WPP. “We are forging a lot more collaboration amongst all the WPP operating companies. The BrandZ report is one of the best connectors we have within WPP to bring all of us together because a study like this is useful to all our businesses be that our content, media, branding, PR businesses.”
Digital Footprint a Must
Digital is a must especially in the customer-facing service sector. "I do not recommend that every brand has to go digital, if it makes sense go digital,” Talwar said. According to him the service sector, which has been about delivering experiences, is seeing a growing need to deliver good digital experiences. “This is not just limited to what is in the brand’s control, but even what people are saying about the brand on various platforms. So it is the entire digital footprint of a brand that is gaining relevance,” he said.
Talwar said that the conversation among brands now has moved from ‘I need to have an app’ to ‘I need to have the best app.’ “If a brand is engaging with consumers, digital is no longer just a tick mark,” Talwar said. The role of the digital interface has become very significant to delivering the experience, he feels.
Rural India Driving Growth
Premiumisation emerged as one of the key trends in the market, driving brand value for consumers. This applies to rural India too. “Premiumisation is not restricted to the top end of the market. It’s just a trend of upgrading; if I move from economy to popular I am moving up the ladder,” Talwar explained.
As rural India grows it is perhaps “upgrading its choice of brands at a faster rate than urban India,” Talwar said. Noting that rural India is a relatively difficult space to reach, Talwar said that brands are calling out to rural consumers and giving them relevant messages at relevant time points.
Patanjali Slowing Down
“Local brands are growing faster than MNC brands,” said Preeti Reddy, CEO Kantar South Asia. “They are understanding local needs better and are not bound by many of the processes and stage gates that a multinational company has to go through before innovating for the market,” she said.
That said, Patanjali’s performance is plateauing, Talwar said. “Demonetisation and GST hit Patanjali too and perhaps harder than the MNCs, but there have been product quality issues and their sales have flattened. It is now a wait and watch about how they recover from this set-back,” he said.
Patanjali had an edge because it found an area which was relatively vacant and thereby disrupted that space. “But now established players are encroaching into that area by launching similar products. How they now promote their brand and engage with consumers will determine how they perform over the next few years,” Talwar said.
Why BSFI and Telecom Rule?
For the fifth year in a row HDFC bank has topped the BrandZ list of top brands. The top 75 brands list is dominated by BFSI and telecom brands. “This is because they have been running their business well and kept their conversation with consumers right. We don’t think it is an exciting category but the key point is that in the space that they operate, they innovate very fast. The amount of changes in the banking or loans structure to make them tuned to the consumer needs is exemplary. They have heard consumers and are making those changes,” Talwar said.
Negative News is Bad Publicity
Brands such as Air India, Axis Bank, ICICI Bank, which have all made headlines for the wrong reasons and are on the top 75 brands list, run the risk of seeing a decline in brand valuation. “Negative news about a brand impacts brand valuation very much. The brand valuation for Maggi had dropped by around 50% during the time it was embroiled in controversy. A strong brand that commits a mistake can make a comeback if it accepts its mistakes and makes amends,” Talwar pointed out.
Expanding the Study
To give a holistic view of the industry, the study this year added growing sectors such as technology (IT services), technology (online); durables and home appliances, tobacco, and entertainment (TV stations). The team has also added privately owned brands, where financial information is publicly available, and unicorn brands, to the scope of the study.
Yet, the report does miss out on studying some key brands whose financial reports are not publicly available. “It unfortunate that a few brands get missed out but the brands that are getting missed out are far fewer than the brands that are being included in the study,” said Talwar.
He added that even if foreign companies were studied in the Indian context, this Top 75 list would remain more or less the same barring the inclusion of brands such as Google, Facebook and Vodafone.
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