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LatAm Peru The Secrets of Local Brand Value

While the global scenario is led by brands related to technology and information, Peruvian brand ranking seems to be led by its traditions. As true as it is that on this side of the world there are still no strong IT brands, it is also true that, in Peru, national pride has increasingly developed around, among other things, its culinary tradition. So, one of the secrets the local brands have learned to exploit is to associate themselves with an element of shared pride. A pride in which all participate equally.

It's not strange, then, that a brand of dairy products [1], the same brand our moms used to give us, or a local beer, the one we drink with our 'pals', are among the most valuable Peruvian brands. Whether unusual or not, whether conscious or not, if there is something Peruvians seem to agree on it is the preference for local brands in many of the categories of food or drink products. These brands, many of which existed before the turbulence of the eighties, have survived until now, they still know how to beat their foreign competitors, and are still bound to Peruvian hearts.

However, let's remember what makes a brand valuable and how Millward Brown measures it. A brand is valuable as long as it is able to explain the future financial flows of the company. A brand's worth depends, then, on the combination of those values it will attract in each transaction and on the level of intensity of the relationship established with these people (which acts as an indicator of the number of future transactions). This component is called Brand Contribution and can be calculated based on key questions in a structured survey. And what does this tell us? It helps us understand the willingness of each consumer to choose a specific brand within the category they buy into

A good analogy is that of the soccer team we love. Surely, if we questioned our behavior we would not have a "very important" reason that explains why we yell and cheer for a team, yet we can't doubt the particular feeling. Well, something similar happens with our favorite beer. Are you sure you would recognize its taste in a "blind" test? Maybe not, but you know which one you'll choose when asked. Moreover, there is no doubt that, if we ask, a lot of tenuous arguments will surface to defend the other option; these arguments might not be very rational, but they are deeply felt.

This is what's unusual but also powerful about brands. They organize the world, they predispose us and they help us orient our decisions. Building a solid brand will increase the financial stability of the companies much more than if this stability came from an eventual technological or sensory advantage.

While some brands have learned to rely on tradition and help consumers – through the perpetuation of habits – to reaffirm certain personal and identity values, other brands still have to find a strong and reverberating attraction point for the customers they intend to recruit.

A recipe for success? “Don't try to fill in the space others earned before. Look for other spaces for your brand.”

Claudio Ortiz

Managing Director, MB Perú

[1] For those brands that do not trade in the stock exchange or that do not publish their results it is not possible to estimate the dollar value of the brand but just a Brand Contribution Index.