The 2022 edition of "Brand Finance South Africa 100", described as "the annual report on the most valuable and strongest South African brands", was recently published. As always, it contains useful information and lessons.
Some general words on brands, brand value and brand-building
The report contains this well-known and somewhat unwieldy definition of a brand:
"brand is defined as a marketing related intangible asset including, but not limited to, names, terms, signs, symbols, logos and designs, intended to identify goods, services or entities, creating distinctive imagery and associations in the minds of stakeholders, thereby generating economic benefits."
This definition from branding guru Jeremy Sampson is certainly far more user-friendly: "A brand is a promise made and a promise kept. But as Henry Ford said: 'You can't build reputation on what you say you are going to do', something politicians seem oblivious to."
The report says this about brand value and maintenance: "Brands are often the most valuable assets of their owner, to be nurtured, protected and invested in at all times. Living in turbulent times, invariably it is the companies that own strong brands that remain relevant and prosper."
Finally, there is this interesting observation about brand-building: "A key driver of Woolworths' brand strength is parochial support in South Africa where local consumers and stakeholders feel a national affinity with Woolworths (and several other South African brands too)."
More about those "turbulent times"
Sampson says this about the past two years, which of course involved Covid as well as serious civil unrest in South Africa: "Looking at the top 50 brands, considerable resilience was displayed in the first 52 weeks, with a total decline in value of only 2%. This year the Top 50 South African brands have gained 8% in value to R487.8 billion, a new South African record."
As for the future, Sampson says this: "As we look to the next two years and a post-pandemic future we expect that South African brands will continue to drive the economy."
South Africa's most valuable brands
The report lists these as the ten most valuable South African brands in 2022:
- MTN. The value of the brand is ZAR59.8 billion (up 34% from last year) according to Brand Finance. MTN subscribers on the African continent have increased by 2.9-million this year, bringing the total number of subscribers up to 272-million. ENSafrica is very privileged to manage this brand worldwide.
- Vodacom. The brand is valued at ZAR29.9-billion.
- Standard Bank (ZAR23.4-billion).
- First National Bank (FNB) (ZAR23.4-billion).
- Absa (ZAR21.3-billion).
- Multichoice. This is another big grower, up more than 30% from last year to ZAR17.5-billion.
- Woolworths. The brand is also up more than 30% from last year to ZAR17.3-billion.
- Shoprite (ZAR15.7-billion).
- Nedbank (ZAR15.1-billion).
- Mondi (ZAR15-billion).
According to the report the aggregate value of the top 50 South African brands grew by 15%.
Leaving aside the issue of brand value, the report tell us that:
The fastest-growing South African brand is Checkers. Retail is clearly doing well, with Shoprite and Woolworths also showing good growth.
The strongest South African brand is Capitec Bank. According to the report, this award is based on "relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity and business performance."
The sectors dominating the top 100
The really big hitters are finance, telecoms and retail, followed by insurance, mining and chemicals. This is apparently the first year that mining brands have appeared in the rankings.
There are some obvious IP observations to be made.
Services
The first observation is that the South African economy – like many others – has a very strong services sector. This has obvious implications when it comes to IP: trade marks can, of course, be registered for both goods as well as services. When it comes to trade mark registration, popular service categories include finance, telecoms, retail and entertainment. But service providers might also want to protect their trade marks for goods, for example where a supermarket sells own-brand products. Whereas a goods provider might want to register for services, such as a vehicle manufacturer registering for vehicle maintenance services.
Legalities
Brand owners will, of course, need to go through all the hoops when it comes to protection and enforcement. This could involve clearance searches for a new brand or an extension of an existing brand, registration in the right classes, recordal of licences and other transactions, enforcement of rights, co-existence agreements, and more.
This is, of course, where we lawyers become involved with brands. If you're starting out and you want to create a great brand you may find this bit of advice from the report useful:
"Amazon is undoubtedly one of the world's strongest brands, one of just a handful achieving the highest AAA+ rating." Keep it simple and do what Amazon does – the retail giant offers 'outstanding value' and a 'slick shopping experience.'"
We also have in-house expertise to provide you with a brand valuation. These are required for various reasons, including:
- raising capital;
- assessing tax considerations;
- applying for exchange control approval;
- mergers, acquisitions and disposals;
- royalty rate determination for licensing;
- litigation and expert witness advisory work;
- brand management; and
- frequently also for strategic reasons, such as enhancing the "IP image" of your business or justifying IP related spending.
Reviewed by Gaelyn Scott, head of ENSafrica's IP department.
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.
