Kantar and IAB’s online insights in action series, held on 30 September 2020, featured Natalie Otte, Head of Kantar Insights Johannesburg, and Stina van Rooyen, Head of Brand at Kantar Insights Division. They shared learnings from BrandZ’s Top 30 Most Valuable South African Brands report 2020.
Top BrandZ is the largest brand-building platform in the world and their ranking methodology comprises of:
Step1: Financial value created.
Step 2: Brand contribution (%) – the proportion of financial value generated by the brand’s ability to increase purchase volume and charge a premium.
Step 3: Brand value.
Technology brands continued to grow brand value through the last recession and look set to continue this growth. Luxury brands were among the hardest hit through 2008-10, but have since recovered to deliver strong growth every year.
A closer look at the ranking and value:
– BrandZ SA represent brands born in South Africa and not the value of holding companies, and the financial value needs to be publicly available.
– Strong brands deliver superior shareholder returns. Even with market volatility in the current crisis, BrandZ’s portfolios dipped much less than the global average.
– Banks and beer top BrandZ’s most valuable South African brands 2020. Retail experienced the biggest value decline as two stalwarts dropped off the list. When combined, financial services make up 43% of the Top 30.
The key themes:
SA brands lack strong equity.
Most South African brands have grown as a result of expanding operations, not necessarily by building strong brands. A number of brands that score 4 or 5 in BrandZ Top 30 rankings are in developing markets.
Validated measures of equity continue to be stronger for the more resilient brands. The Top 30 South African brands rely heavily on salience and meaning, but there is a lack of strong differentiation. A shift to digital commerce means brand salience becomes more important. A brand must be salient if people are to search for it by name.
Difference is the key, especially for price/value equation
Perceptions of difference motivate people to pay more. Defend with difference. Difference provides a reason to choose at the time of purchase, helps justify paying the price asked and provides an easy justification for choice after purchase (higher satisfaction). Woolworths has the highest difference in the Top 30 and does well to justify its worth.
Purposeful brands grow in value at a faster rate.
They help makes people’s lives better. Responsibility is now three times more important to corporate reputation than 10 years ago. Purpose shows a strong relationship with responsibility. Responsibility accounts for 49% of corporate reputation. 90% of South Africans say brands should talk about how they can be helpful in everyday life.