Global Brand Strategy & the Top 100 for 2006 (the ‘B.R.A.N.D.I.N.G.’ approach)

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).

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 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.

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.

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):

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.

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