Brand power remains key to success

Home Inside FCNews Brand power remains key to success

by Matthew Spieler

It has often been said a brand provides an avenue to success for everyone involved in it—from the manufacturer of the product to the retailer who not only sells it but combines its own brand into the selling picture to the end user who connects to the brand’s message or image. The latest global study on brands and their overall affect on business shows even during this prolonged period of economic uncertainty, the world’s biggest brands have continued to grow in value.

Millward Brown’s “2012 BrandZ Top 100 Most Valuable Global Brands” ranking points to the power of strong brands as both a driver of new business growth and critical support in hard times. In the study’s seven years, which now covers over 2 million consumers and more than 50,000 brands in over 30 countries, the Top 100’s total value rose 66%.

In addition, while the total return on investment for all companies in the S&P 500 index was 2.3%, the BrandZ portfolio was 36.3%.

Eileen Campbell, Millward’s CEO, said strong brands enabled companies to endure continued economic weakness and thrive in the transition to recovery. “Brands are an insurance policy for businesses.”

David Roth of Millward’s parent company, WPP, added, “Brands help businesses create competitive differentiation, command a price premium and become more resilient to crises or economic turbulence.”

The BrandZ report specifically noted “strong brands drive sales. The importance of brand in consumer purchasing decisions increased significantly in the
past decade, while the influence of price declined… Price alone rarely drives sales…59% of consumers now say brand alone is an important purchasing determinant compared with only 7% who say price alone is important…The preference for brand alone stayed strong even during the recession.”

But, it added, brands that appreciated in brand value also combined price and quality into propositions that appealed to consumers battered by the economy.

Roth noted businesses that leveraged technology, focused on the customer experience or boosted control of their brands thrived in the past year.

Bryan Roberts, retail insights director of Kantar Retail in London, said, “retailers have to realize they need to engage with shoppers whenever and wherever those shoppers are thinking about purchasing.”

Michael Ross, co-founder and director of eCommera, a leading provider of eCommerce trading solutions, said, “The Internet has catalyzed fundamental changes across the entire retail system. At the heart is a dramatic shift in retailing priorities. Location, location, location is giving way to customer, customer, customer.”

As such, he noted the terms retailer and brand owner have become misleading and obsolete. “In a world where successfully selling products and services depend primarily on profoundly understanding the customer, the brand owner and retailer are in the same business.”

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