Jez Frampton is the global chief executive of brand consultancy Interbrand. With 40 offices across the world, Interbrand is one of the largest in its space. Every year, the consultancy releases a list of the 100 best global brands - something that is keenly awaited by a number of corporate chieftains. Indian companies, however, have nothing to cheer about this year as no domestic brand has made it to the list - a trend that has been more or less the same since the first list was published eleven years ago. Frampton, who was in Mumbai recently, explained to Viveat Susan Pinto, why Indian brands have failed to make it to the august list. Excerpts:
Despite the India Shining story, Indian brands have failed to make it to the top 100 list. What is the problem?
There are a number of reasons for not being on the list. The key criterion is that you must have a genuinely global business and brands, and not just have operations across the world. While there are a host of good Indian companies, none of them have sufficient scale. By scale, I don’t mean scale in terms of operations alone. Take the Tatas, for instance. The group has a presence across sectors and in a number of countries. There are brands such as Tetley, Nano and Jaguar in its portfolio. Yet, the Tata brand is not sufficiently big enough. So yes, the business is big and valuable, and there are notable brands within its portfolio, but as a homogenous entity, there is no Tata brand all over. There lies the problem. Of not being sufficiently global enough from a brand point of view. This principle also applies to other business houses such as Mahindra & Mahindra, Godrej and Reliance. If this issue is addressed, I don’t see why Indian brands can’t make it to the global list.
But do you see this happening soon enough?
There is a distinct possibility that Indian brands will make it to the list going forward. I am pretty confident of that, the reason being that I see Indian firms addressing this basic issue that I spoke about earlier. I find firms today realising that there is need for a homogenous identity that stakeholders across the world can identify with. Don’t forget, this is the hallmark of all the brands which have made it to the global list this far.
Tell us something about the brands that have made it to the list this year?
Coca-Cola is on top, followed by IBM, then Microsoft, Google and GE. These are the top five brands on our list this year. Coca-Cola has retained the top spot for the last eleven years. This is interesting if you ask me. Why? Because like the others on the list, Coca-Cola has actually had quite a chequered past. But the point is that it has managed to tide over controversies time and again leaving a lasting impression in the minds of stakeholders. There are some brilliant people sitting out there, who understand who the Coca-Cola consumer is, and what that consumer wants. They have a clear vision of the brand, which is why the innovations for the brand have worked.
Let me give you an example. For its integrated marketing campaign around the Football World Cup this year, Coca-Cola chose Canadian-based singer K’Naan’s ‘Wavin’ Flag’as the official anthem. The song was already popular in Canada prior to Coca-Cola’s initiative. But post the campaign, the song became number one in Germany, Switzerland and Austria among other countries. What Coca-Cola did is take a very popular song and make it part of the musical element of its campaign. The traction that the brand generated in the process was enormous, not to mention that the song and the singer benefitted too. There are many such innovative things that Coca-Cola does .
Apart from brand salience, what else are you looking for in a brand?
There are three elements to the exercise, all of which are inter-linked. We look at the notion of economic profit, which is similar to Economic Value Added (EVA) and multiply it with the role of the brand to arrive at branded earnings. The branded earnings give us a sense of the brand strength, which helps us determine who is on the list and who is not.
What is the cut-off for a brand in terms of value?
Three billion dollars. If a brand does not have a value equal to or above this, it is automatically eliminated. Every year, we look at close to 200 brands before arriving at the list of 100. Coca-Cola’s value this year, for instance, is $70.4 billion, IBM’s $64.7 billion, Microsoft, $60.8 billion, Google’s, $43.5 billion and GE’s $42.8 billion. The other five on the top ten list are McDonald’s at $33.5 billion, Intel at $32 billion, Nokia at $29.4 billion, Disney at $28.7 billion, and Hewlett-Packard at $26.8 billion respectively.
Who have been some of the notable drop-outs this year?
BP, Burger King and Lexus from Toyota Motors. Last year, these brands were ranked 83, 93 and 96 respectively. This year, they are completely out of the list. For BP, it was the oil spill issue, which cast a doubt over whether governments across the world would grant the firm rights to drill. Lexus because of the issue of recalls this year, and Burger King because it appears weak in the face of a spirited challenge from McDonald’s, which has managed to pursue a far more aggressive and positive strategy in the last few years.
