South Africa: The Finance Of Brands

Last Updated: 15 August 2019
Article by Gaelyn Scott

Most Read Contributor in South Africa, July 2019

“Marketing should always be seen as an investment rather than a cost, once you know the value of your brands you can better manage them and monitor the effectiveness of the investment”.

This quote comes from Brand Finance South Africa 50, 2019, a report that was published recently. As trade marks are, in essence, the identifiers of brands and trade mark law is all about protecting and enforcing these brand identifiers, the report is worth a look. Reports like these give trade mark law some context and justify the cost of protecting, maintaining and enforcing intellectual property, typically a company’s most valuable asset.

The report seeks to identify the strongest and most valuable South African brands. The authors (one of whom is Jeremy Sampson, a well-known figure in South African branding) say that they put thousands of the world’s biggest brands to the test every year, evaluating which are the strongest and the most valuable.”

The report says that the purpose of a strong brand is to attract customers, to build loyalty, to motivate staff”. But, it goes on to say, for a commercial brand “the first answer must always be to make money.” So, the authors claim, we “connect brands to the bottom line.”

This is explained further as follows: “Huge investments are made in the design, launch and ongoing promotion of brands... monitoring of brand performance should be the next step.”

But, as many involved in branding and marketing will know, there are those who have doubts about this monitoring: “Where it [brand monitoring] does take place it frequently lacks financial vigour... as a result marketing teams struggle to communicate the value of their work and boards then underestimate the significance of their brands to the business... sceptical finance teams unconvinced by what they perceive as marketing mumbo jumbo may fail to agree necessary investments.”

The report suggests that it is high time the doubters (bean counters!) got with the programme: “There remain some who still sniff at the mention of intangibles and goodwill. Today the value of the intangibles of a company invariably far outweighs the value of the tangibles, and brand value is usually the major contributor.”

Brand valuation, say the authors, is more rigorous and recognised than it may once have been. There’s mention of ISO 20671 Brand Evaluation and ISO 10688 Brand Valuation. There’s a reminder that the standard brand-value methodology is the royalty relief approach – “estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use.”

Looking at brands in South Africa, the report tells us that brands are outpacing a decidedly sluggish economy, recording growth of 5.8%. We’re told that the values of the Top 10 brands all went up over the past year, in some cases by over 30%. The performance of South Africa’s biggest brands poses a potential source of growth for the economy that, in turn, could lead to increased job creation and funds flowing to the fiscus.” The suggestion might well be that government should be taking more note of brands!

So, which brands are doing well in South Africa? In South Africa, like in many emerging markets, telcos and finance are the dominant forces.” But it’s not only cell phone companies and banks that are coining it – retail, entertainment, insurance... they’re doing OK too. According to the report, the top 20 most valuable brands in South Africa are:

  • MTN
  • Vodacom
  • First National Bank
  • Absa
  • Standard Bank
  • Sasol
  • MultiChoice
  • Woolworths
  • Castle
  • Nedbank
  • Investec
  • Mondi
  • Shoprite
  • Discovery
  • Carling Black Label
  • Old Mutual
  • Sanlam
  • Sappi
  • Pick n Pay
  • Capitec

ENSafrica’s IP team is delighted to manage the worldwide trade mark portfolio of South Africa’s most valuable brand, MTN. The list suggests that in the South African economy there’s a very strong emphasis on services, but it does show that oil and gas are important too, as is paper and, of course, we do like our beer!

Brands, being extremely valuable assets, must be legally protected and, once protected, they should be enforced. That’s where trade mark law comes in.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions