Top 50 German brands worth over EU260 billion
The combined value of the BrandZ Top 50 Most Valuable German Brands 2018 is US$305,708 million, or roughly EU263 billion. This is significantly higher than the value of the UK Top 50, $230,360 million, and the French Top 50 2018, which are worth $240,407 million.
SAP is Germany’s most valuable brand
Germany is the only European market in the BrandZ rankings to be led by a technology brand, and SAP is by far the most valuable brand in the inaugural BrandZ Top 50 German Brands ranking. SAP has a brand value of $48.9 billion, which means it alone accounts for 16 percent of the value of the entire German Top 50. This world leader in enterprise applications of software began in the early 1970s, started by five entrepreneurial engineers with a vision to change the way companies do business. It is now a truly global brand, and counts 87 percent of Forbes Global 2000 companies as customers.
Mega brands dominate the ranking
Value is concentrated at the top of the German ranking, with top two brands – SAP and Deutsche Telekom – between them accounting for 29 percent of the value of the leading 50 brands combined. This domination of the ranking by a small number of mega brands is a pattern we see in other markets. In France, for instance, almost half of the Top 50’s value comes from just five brands, while in the UK, the top two brands provide 21 percent of the Top 50’s value, and the top five make up 41 percent.
Luxury cars set German ranking apart
The presence and influence of so many premium automotive brands gives the German Top 50 ranking a unique flavor. There are five leading global car brands in the German Top 50, something unmatched in any other national ranking. Between them, names like BMW, Mercedes-Benz and Porsche make the car category the most valuable in the ranking, and together account for 22 percent of the total brand value of the entire Top 50.
Diversity of brands reflects German economy
A look through the German Top 50 ranking is a like a glance at daily life for consumers and businesses in Germany. There are brands from 18 categories, many of which have not only become national success stories but truly global leaders in their fields. For everyday essentials there’s NIVEA, Knorr, Fanta and HiPP, there are logistics, telecommunications and finance giants, a range of retailers, home appliance producers, apparel, several beer brands, a travel company and the airline Lufthansa.
Brands communicating well, but need more focus
Tracking of the Top 10 most valuable German brands over time shows that while they are consistently good at achieving visibility among consumers and coming to mind when people think of a category, there is room for improvement in brands’ focus on being different to others in their category, and being different in a way that is important to consumers. Meaningful difference, a key ingredient in what makes strong brands valuable, has not grown at the same pace as being well known. This is potentially risky, as it leaves the door open for newcomer brands to win market share and brand value by simply standing apart from the status quo, and in a way that consumers find relevant and appealing.
Brand vitality on par with top global performers
Brands that make the Top 50 ranking in Germany this year are performing as well as the leading brands in the world on the BrandZ measure of health and vitality. Among the leading 50 German brands, 40 percent are classed as being healthy, having achieved great scores on the five components of vitality: purpose, innovation, communication, experience and love. This is not far behind the performance of the Global Top 50 in 2017, 50 percent of which were classed as healthy. This picture of vitality sets German brands apart from those in other large European markets; the top brands in the UK and France were considerably less healthy.
Trust and growth are natural partners
Some of the most trusted brands in Germany are also the most highly recommended by consumers, and this matters enormously given the high usage of social media. Trust often takes many years to earn, and some of the most trusted German brands have indeed been around for decades – names like Lufthansa, HiPP, DHL, adidas and Miele. These trusted brands feature among the most likely brands to be loved and recommended, factors that also correlate with brand value.
Top 5 learnings for marketers
1 Even global giants need to be nurtured
Many of the brands that feature in the German Top 50 are among the most widely recognized and respected brands in the world, and their current scale shows that they have built both brand and business simultaneously. But businesses that nurture the power of their brands can punch above their financial weight and create the best conditions in which to grow future sales. This is especially important now, given that powerful startups are shaking up entire sectors and challenging established business models.
2 Make branding a priority and reap the rewards
Analysis of the BrandZ ranking shows that the healthiest and strongest brands are those that can best generate volume sales, justify a premium, and grow their value at a pace that outperforms brands in general – factors that all add to their bottom line. In over 12 years of Global BrandZ rankings, it has become clear that the share price of valuable brands is better insulated when external factors buffet the market, and these brands make a faster return to growth when conditions improve. Over time, their returns to shareholders have averaged four times the returns of a global market tracker.
3 Fame is not enough, and history does not guarantee a future
Being well-known is a key ingredient of brand growth, but there is more to building a healthy brand than having the biggest voice. Brands need to have a purpose – something they stand for that goes beyond making money and that is both credible given what the brand produces, and also important to the people they’re targeting. Consumers are seeking brands that share their values and that deliver a delightful experience before, during and after a purchase is made. Similarly, while longevity in a market and generations of happy customers are an advantage to brands, heritage is not enough to ensure a brand’s continued relevance in people’s lives. Brands must constantly demonstrate to consumers that they stand for something that’s relevant to people’s lives today, or they risk losing their ability to win sales and command premium pricing.
4 Emotional connections can deliver future growth
The brands that are meaningful, those that make a positive difference to people’s lives, and that are seen as different to other brands in their category, are those that are more healthy and tend to be worth more. Meaningful difference is conveyed through products and services but also through powerful and memorable communications. Advertising by meaningfully different brands doesn’t just reach the target audience – it moves them. Strong communications can help make up for deficiencies in other areas, but it cannot work alone.
5 Innovation & experience generate biggest rewards
Innovation and experience are two of the five key factors that contribute to the BrandZ measure of brand vitality. While the brands that are in the best shape perform well on all five measures, it’s clear that in Germany, investment in innovation and experience pays disproportionately high dividends. Brands that are especially strong on these two factors have significantly higher brand value than those that are not. Innovation is strongly linked to consumer love, which is important not just because it’s nice to be loved, but because it helps sustain sales and brand value during the periods between innovations. And innovations that are used to improve the consumer experience are loved for making life easier and perhaps a little more fun.
Planning a route
Ensuring future brand strength means building on the best of the past, but also being agile enough to be able to see what the future might bring – and being brave enough to embrace it. This can require a brand to think about their category in an entirely new way, and question what it is that they actually offer the consumer. BMW is doing this through its increasing focus on solutions for mobility, rather than just selling more new cars to individuals. It’s also branched out into a category that at first seems incongruous – beer – but actually gels with what the brand already delivers to people. The brand is working with Nittenauer brewery on a zero-alcohol craft beer, which in itself captures the zeitgeist, but that is particularly relevant to motorcyclists. The brand says it already offers all the things bikers desire: bikes, events, comfort features, training, servicing, oil and clothing. Now, it also offers the post-ride refreshment its customers want.