Brand IT rules

Also, mass-market brands are the most valuable

The recent Forbes list of the world's most valuable brands throws up some interesting lessons. To begin with, this list is technology-heavy. Apple is right on top for the third year in a row. Its brand value, $104.3 billion, is nearly double that of its closest rival, Microsoft ($56.7 billion). In the top-10 list, as many as six are technology brands. (Among the top 100, the sector has 19 entries.) Most of the technology brands in the top-10 list (Apple, Microsoft, IBM, Google, Intel and Samsung) are of recent vintage compared to the non-technology brands (Coca-Cola, McDonald's, General Electric and Louis Vuitton). This shows that with the right strategy, it is possible to build a big brand in a relatively small span of time. Samsung's 53 per cent rise in brand value this year, to $29.5 billion, has been attributed partly to the stupendous success of its Galaxy S4 smartphone.

Two, brands can also lose value quickly, especially in the dynamic world of technology. Thus, BlackBerry's brand value fell from $6.1 billion in 2012 to $2.2 billion this year. As a result, the brand has fallen off the top-100 list. Similarly, Nokia's value has eroded 55 per cent to $7 billion this year. Placed in the top-10 list three years ago, it is now ranked 71st. Three, brands that cater to the mass market create more value: Apple, Microsoft, Coca-Cola, McDonald's et al. The popular belief that strong brands exist only at the top end of the value chain does not hold true. Thus, there are only eight luxury brands in the top 100 entries: Louis Vuitton (rank 10), Gucci (38), Coach (45), Hermes (53), Rolex (68), Prada (70), Chanel (74) and Burberry (99). Four, there is only one telecom service brand on the list: Verizon has been ranked 22nd. This confirms the suspicion, voiced by more than one brand expert, that telecom service brands are a mile wide but only an inch deep. That's perhaps why companies don't think twice before killing the brand that comes with an acquisition. For example, Vodafone replaced Hutch completely after it acquired its Indian business, though it was the second largest brand in the market after Airtel.

America still dominates the world of brands. The country accounts for almost half the names on the top-100 list, followed by Germany (nine brands), France (eight) and Japan (seven). China does not have a single brand on the list, though it is the world's largest hub of manufacturing. India, of course, has no brand on the list. That's because a large majority of Indian businessmen and companies do not take a holistic view of brand building. Brands are complex things. For their value to improve, the user experience has to be consistently good. For that to happen, the entire organisation has to think in terms of the consumer, and not just the brand manager. In that sense, it is not just about the advertising money. Until this realisation hits Indian companies, it is unlikely that they will win that coveted spot on the Forbes list.