As India changes, highly trusted brands increase value faster
As India changes, highly trusted brands increase value faster
Newer brands build trust with unusual speed
Fluctuations in brand trust over the past five years, since the launch to the BrandZ™ India ranking in 2014, underscore the importance of brand trust and the critical connection between trust, brand equity, and brand value growth in India, new BrandZ™ research reveals.
The research investigates the importance of brand trust in India. It documents how trust has changed over the past five years and explores three of the most important levers that drive brand trust: Meaningful Difference, Purpose, and Experience.
Changes in the BrandZ™ India ranking since 2014 confirm the importance of trust. Brands that dropped out of the ranking scored 102 in the BrandZ™ Trust Index. Brands that entered the ranking scored 111, and brands that stayed in the ranking over the five-year period scored 113. An average score is 100.
Since 2014, the correlation between high trust and high value became stronger. In 2014, the value of brands that scored high in the BrandZ™ Trust Index was virtually the same as the brands that scored low in Trust. In 2018, the value of brands scoring high in Trust was 86 percent higher than the value of brands scoring low in Trust. The analysis compared the brands in the top third of Trust Index scores with brands in the bottom third.
Power and Premium
The importance of Trust in India is one more way that brand building in India both conforms with and diverges from brand building in other parts of the world. In India, as in other parts of the world, high Trust correlates with strong brand equity. And brand equity, rather than trust alone, drives value. These assertions apply in India, but they are amplified.
The BrandZ™ research analyzed the relationship between brand Trust scores in the 2018 India ranking, and the two components of equity—Power (predisposing consumers to buy more) and Premium (predisposing consumers to pay more).
The Power score of brands high in Trust was triple the score of brands Low in Trust. Similarly, the Premium score of brands high in Trust was higher than the score of brands low in Trust. The same correlations exist globally, but are less pronounced, reflecting this closer relationship between Trust and brand equity in India.
The connection between Trust and Premium is especially important in India, where aspiring consumers across all segments of the market are interested in products and services that promise to help them achieve a better life.
And the connection between Trust and brand equity is especially relevant for India’s most highly valued brands that have typically built Trust over time. The 20 oldest brands in the BrandZ™ Top 75 scored 112 in Trust in the 2018 BrandZ™ India ranking, while the 20 newest brands scored a comparable 110.
For example, Flipkart, the online marketplace that launched in 2007, scored 117 in Trust, having transformed the perception of the e-commerce into more reliable channel. Ola, the ride-hailing service launched in 2010, scored 122 in Trust.
The ability of new brands to build trust rapidly suggests that the timeframe for building Trust has shortened, perhaps because of social media and other accelerated consumer interactions with brands. The newest brands in the India Top 75, which tend to fall toward the bottom of the ranking, may be better aligned with these contemporary media trends.
The deeper reason for this development pertains to the ability of some newer brands to excel at key drivers of brand success—Meaningful Difference (meeting needs in relevant ways that create affinity with the brand) and Purpose (being seen as useful, making life better). Brands that score high in these BrandZ™ metrics are more likely to deliver a consistently good Brand Experience and earn trust.
The BrandZ™ research quantified the correlation between Brand Experience and being a trusted brand. In the India 2018 BrandZ™ ranking, the least trusted brands (the bottom third in Trust Index scores) scored below average, 98, in Brand Experience. Conversely, the most trusted brands (the top third in Trust Index scores) scored 117 in Brand Experience.
Ultimately, Trust, like Love, is an outcome brands enjoy when they do all the basic brand-building initiatives well. In combination, strong Trust and Love compound their impact. In the 2018 BrandZ™ India ranking, brands that scored in the top third in both Trust and Love were double the brand value of brands that scored in the bottom third of both Trust and Love.
The first takeaway of the BrandZ™ research is that brands need to look after their brand equity, which will have a knock-on effect in the medium- and- long-term to sustain the brand as more trusted. The levers to this outcome are a strong Purpose, Innovation, and Communication to create and convey a Brand Experience that will draw customers and convince them to return.
The second takeaway is that trust is particularly important in India for several reasons including: the increase in consumer knowledge about brands because of the internet and social media; recent scandals around tainted products; and the influence of young people whose greater access to information makes them more skeptical than earlier generations.
This is the new reality: Indian consumers of all ages like brands but subject them to greater scrutiny. New brands need to continue to build trust quickly, and heritage brands, which have had the luxury of building trust over time, needs to constantly renew it.
Especially for young consumers, trust—typically the outcome of successive positive encounters with a brand—needs to be established early. Younger consumers, who grew up with social media, became more predisposed than their parents to distrust brands. They want to trust a brand even before the try it.
Brand trust has been a powerful purchase influence in India for a long time. Family business dynasties confer trust on products across categories as diverse as telecoms and tea. Continuing this history of trust today requires brands to establish a clear Purpose and execute it in a Meaningfully Different way to create a consistently great Brand Experience.
Finally, brand Trust is reinforced by a positive corporate reputation. Trusted corporations score high in the key BrandZ™ metrics of Corporate Reputation: Success (having strong financials), Fairness (being honest in pricing and other dealings), and Responsibility (caring about employees, the environment, and other issues).