Branding lessons

Indian brands are rarely as global as the businesses they serve

Brand Finance and IMRB Kantar Worldpanel came out with their surveys last week on the most chosen brands in India. While the former survey focused on brands across the spectrum, the latter was restricted to consumer brands only. But the primary theme in both the reports remains the same - those on top can't rest on their laurels. While the Brand Finance rankings talk about 20 new challenger brands (the highest so far) that could threaten the domination of the old guard, IMRB Kantar sees the emergence of local brands giving established names a run for their money. If Titan, Taj or Havells can drop off the list, any brand can follow suit. Thus such rankings are helpful in coaxing the top companies to pay closer attention to their brand value. Emerging sectors like e-commerce, telecommunications, technology and banking services are particularly competitive, and staying in the premier league of brands will require continued investment in customer relationships, technology, advertising and brand strategy.

What is, however, interesting is only three brands in the top 10 list of Brand Finance are from the new economy - all others are from the old economy or are established players. Even the 20 new brands that made an entry into the top 100 list are largely from the old economy, except two in the telecom space - Micromax and Aircel. This is largely because the methodology such reports follow gives an inherent advantage to those who have had a longer presence. While Brand Finance calculates brand value by the royalty relief method - calculating the royalties a corporation would have to pay to license its brand if it did not own it - the IMRB ranking is based on what it calls a "consumer reach point" score, a composite measure of the number of households buying a brand and the frequency of such purchases. Thus the presence of State Bank of India, Life Insurance Corporation, Indian Oil and ONGC in the top 10 list is a reminder of their considerable mindshare and the predominant role public sector enterprises still play in household expenditure.

What should be a matter of concern is that Indian brands are slipping in global rankings. Comparable figures are difficult to come by, but the following could be an important indicator. For example, Tata remains the country's industrial titan with its brand value, for the first time, exceeding $15 billion (about Rs 96,000 crore at the current exchange rate). It is deservedly India's leading brand by a long way on almost every measure and is the world's 65th most valuable brand in the Brand Finance list. The catch, however, is that the salt-to-software conglomerate has gone back five years - it was at the same spot in 2010 before entering the global top 50 in 2011. A part of the reason for Indian brands' indifferent performance could be the fact that they are rarely as global as the businesses they serve. This will hopefully change as more Indian businesses shed their reluctance to nurture their brands and start treating them as genuinely valuable economic assets - while making more astute acquisitions of great brands from across the world.