How to energize German brands
We have established that Meaning and Difference give brands a clear advantage over their competitors, contributing to strong brand value and greater ability to resist adverse pressures on a category.
The key question then is: how do brands improve their Meaningful Difference? Well, they need to work on their health and, just as there are many contributors to human wellbeing, there are multiple factors that play a part in developing the health of a brand.
BrandZ analysis has identified five key attributes shared by healthy, valuable and Meaningfully Different brands.
When a brand is strong on all five of these attributes (scoring significantly above average), they’re healthy brands overall. We combine scores on each of the five elements into a single “Vitality Quotient”, or vQ score.
If a brand is lacking in any one area, they are at risk of damaging their brand health and underperforming in the market. If they fail on all five measures (a vQ score of 99 or less compared to an average score for all brands of 100), they are classed as being “frail”.
There are three German brands that appear in the Top 10 for all five aspects of brand vitality. Fielmann, DHL and adidas are among the leaders on every element of vQ.
Five ways to vitality and value
How German brands shape up on the world stage
The German brands that feature in the 2020 Top 50 ranking are among the healthiest brands in the country. Their average vQ score is 11 points higher than the average for all German brands. Germany and Italy share the accolade of having the highest vQ scores in Europe of any BrandZ market. Globally, they are beaten by Indonesia, India, Japan and the USA.
German brands are especially strong when it comes to the first element of vQ: purpose. Purpose is the buzzword of the moment for brands around the world, but among many of Germany’s leading brands, purpose has been at the heart of their business for years, if not decades. Fielmann, for instance, has been driven by a mission to make buying eyewear as simple and as pleasant as buying a cup of coffee. dm has set about providing a range of drugs and personal care products that suit every budget.
This focus on purpose is delivering value to brands; in the past year, brands with high scores for purpose (of 110 or more) have risen in value by an average of $59 million. Those with poor purpose scores have actually lost brand value, to the tune of – on average – $259 million each.
Germany also shines on innovation. Turn to the Creative Innovation section that follows for more on how this benefits brands, and how to dial up the value that innovation can offer.