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HOUSEHOLD NAMES SHOW HOW TO TURBO-CHARGE BRAND VALUE

There are some brands that punch above their weight in BrandZ rankings because they score well on a measure we call “brand contribution”.

 

Brand contribution is a score between one and five that reflects how well a brand differentiates itself from its competitors, generates desire, and cultivates loyalty. The brand contribution score assigned to a brand is the result of extensive consumer research, so it reflects current sentiment among consumers towards a brand.

 

The inclusion of brand contribution scores in the formula used to generate brand value is one of the key ways that BrandZ rankings are distinguished from other brand valuation methodologies. It is the only ranking that uses online and face-to-face interviews with consumers to quantify the place that brands occupy in people’s hearts and minds.

 

Brands with high scores for brand contribution tend to be resilient to challenges in the market and outperform their competitors when it comes to value growth. These brands predispose consumers to choose their particular brand over another, or make them more likely to be willing to pay a premium for it.

 

Over 13 years of global BrandZ rankings, it has become clear that brands with high brand contribution scores have more brand power and outpace other brands on value growth. Tracking the brands that appeared in the first Top 50 Indonesian Brands, in 2015, and seeing how these brands have grown, shows the same correlation applies here, too.

 

Indonesian brands with consistently high brand contribution scores – either four or five out of five – have grown in value by 11 percent over three years, while those with the lowest brand contribution scores actually lost value.

 

The clear correlation between brand contribution and growth in brand value demonstrates the importance to business of investing in brands. Eight of the Top 10 brands in the Indonesian Top 50 this year have a high brand contribution score (four or five out of five).

 

 

 


 

 

To illustrate the role of brand contribution on the outcome of the 2017 Top 50 in Indonesia, we can look at brands 11 and 12 in the ranking. Matahari Department Stores has a similar brand value to the tobacco brand U Mild, but Matahari comes out ahead even though U Mild is financially stronger, thanks to a brand contribution of five, compared to U Mild’s score of three. Brand contribution has a multiplier effect on the financial strength of a brand.

 

Similarly, noodle brand Sarimi and the bank CIMB Niaga have almost identical brand values (and rank 41 and 42 in the 2017 ranking). But Sarimi is more brand-driven, with a brand contribution score of four, while the bank has a score of only two.

 

This is all good news for brands seeking to grow their brand value, because brand contribution is something they can work to improve. And the Indonesian ranking shows that it’s not just brands in the categories people tend to think of as the most fun or desirable to consumers that can drive strong brand contribution. In fact, the Top 10 brand contribution scores in Indonesia this year come from nine different categories. Clearly, there is room in every category to achieve the closeness and relevance to consumers that drives brand contribution.

 

 


 

WAYS TO WIN

 

The Indonesian brands that have the highest brand contribution scores do not appear to have much in common, given they come from such a wide range of categories. What they have all done, however, is build up a reputation for quality and reliability over many years, as well as fostering a deep emotional connection with consumers in a way that means more than just a safe flight (in the case of Garuda), clean teeth (Pepsodent) or a good cup of tea (Sariwangi). They have become deeply valued by the people who know and buy these brands, irrespective of the price tags they carry.

 

Brands can build their brand contribution by:

·      Defining what makes them meaningfully different in ways that transcend function;

·      Refreshing the way this is brought to life through communications and other interactions consumers have with the brand; and

·      Amplifying key messages that reinforce the message and the brand’s position in the market.

 

 

Theory in Action

 

Pepsodent is, on one level, just toothpaste. But it has become so widely used and well loved that it has come to mean something more than that to consumers: it’s their toothpaste. The brand has achieved this closeness to consumers – borne out in its brand contribution score of five out of five – by providing oral care at an affordable price. Beyond that, though, Pepsodent has made it the brand’s mission to promote oral hygiene and the importance of regular brushing to improve the health of Indonesian families. This mission is reflected in regular, ongoing and frequently updated advertising campaigns that target both adults and children.