Brands are assets with potential to grow businesses if managed well: Interbrand

Interbrand India Managing Director Ashish Mishra shares key insights

Q: Interbrand introduced the idea of brands as business assets and pioneered brand valuation in 1988. Its brand valuation methodology is globally respected as the best-in-class. Could you explain the framework?

A: Today, business leaders widely accept the importance of strong brands and the significant value they can play in enhancing business performance. Interbrand has played a leading role – if not the leading role – in instilling confidence through our robust brand valuation methodology. Strong brands influence customer choice and create loyalty; they attract, retain, and motivate talent; and they lower the cost of financing. The influence of brands on current and prospective customers is a particularly significant driver of economic value. Brands help shape perceptions and purchase behaviour, and make products and services less substitutable by expressing their proposition consistently across all touch points. In this way, they create demand and allow their owners to enjoy higher returns. They also create continuity of demand into the future, making expected returns more likely – or less risky. 

Interbrand’s brand valuation methodology has been specifically designed to take all of these value-creation levers into account. Role of Brand analysis is about understanding purchase behaviour: The brand’s influence on the generation of demand through choice. Brand Strength, which measures the ability of the brand to create continuity of demand into the future through loyalty and, therefore, to reduce risk, considers both internal (management and employees, formulae, intellectual property etc) and external (customer) factors, both real and virtual. Finally, these inputs are combined with a financial model of the business to measure the brand’s ability to create economic value for its owner.

Q: Interbrand has worked with the Best Global Brands in every sector, like BMW, Mercedes, Audi, Toyota, P&G, McDonald’s, Kellogg’s, Intel, Samsung, Philips, AT&T, YSL, Burberry, British Airways, and Thai Airways. What accounts for the durability of these relationships? 

A: We believe brands are living business assets with the potential to grow businesses if they are managed well across touch points. We partner the Best Global Brands to anchor experiences that drive efficiency and develop internal cultures that enhance productivity. Our processes and tools are based on a robust value-based methodology that brings together market, brand, competitor, and financial data into a single framework that provides a rich and insightful analysis of how the brand contributes to business growth today, together with a roadmap of activities to ensure that it continues delivering even further growth tomorrow. Our work with Hyundai is a case in point: when Interbrand began its engagement to reposition the brand globally, the auto major was owning price-offs as its demand driver and devaluing itself. Interbrand’s value-based methodology pointed to high Role of Brand drivers such as tech and design as key focus areas, and led to signature technology platforms, the Fluidic design style, and ultimately the resurgence of Hyundai as a global brand.

Q: Interbrand created the first Korean Top 100 brand, Samsung, which today ranks #6 in Best Global Brands. Can you tell us more about this?

A: Samsung was a commodity manufacturer that made electronic components like flat panels in TVs and monitors, memory and mass storage microchips in mobile phones, and super fast processors in computers. For Samsung to successfully compete with established brands like Sony, Canon and Bosch, the business challenge was two-fold: first, build a strong consumer-facing brand that was relevant, differentiated, and emotionally connected with consumers. And second, shift the organisation’s engineering-led mindset towards a world-class brand-driven organisation that could compete globally.

In 1998, Interbrand was appointed for the first detailed valuation of the Samsung brand, which included 58 product segments across its B2B and B2C businesses in key markets, which would uncover insights into the drivers of consumer value and the opportunities to enhance strategy, execution and performance management in each segment. Working with Samsung’s Global Marketing Officer in Korea, we introduced the brand value concept to their senior management and delivered a gap analysis showing where and why the Samsung brand – which at the time competed on the basis of price and features – underperformed against its competitors and how the brand strategy could create value through a differentiated, premium positioning. 

At the time, Samsung was a weak brand with less consideration within the customer decision-making process. However, our analysis also showed that mobile phones and TVs had the highest Role of Brand, which led Interbrand to recommend a halo strategy that could provide the greatest opportunity to connect with consumers. Brand value therefore became a key performance indicator internally, and managing the business around brand value growth began to focus the organisation on brand building and long-term profitability.

Today, the value of the Samsung brand is understood and prioritised within the organisation. The brand drives marketing, innovation, rewards, and long-term planning, and is recognised as one of the world’s leading consumer brands with #1 market share across 21 countries in total consumer electronics. It has outgrown its original competitive targets, like the incumbent TV and consumer electronics giant Sony, and continues to maintain its B2B leadership in semiconductors, LCD panels, and memory solutions. Samsung is also one of the fastest growing brands globally and the 6th most valuable brand in the Best Global Brands table worth over $56 billion in 2017.

"Our goal is to place Sri Lankan brands on Interbrand’s Best Global Brands table, which still doesn’t feature any Indian or South Asian brands."

Q: Interbrand and your Sri Lankan partner MND have partnered top conglomerates Hatton National Bank and DIMO, and are soon to commence working with the Sri Lankan government. What are your plans for the market? 

A: Both HNB and DIMO present excellent opportunities for us to create success stories in the Sri Lankan market. Our experience in managing the Best Global Brands, which include partnerships with Asian brands like Toyota and Samsung, help persuade Sri Lankan businesses to think differently about brands. Toyota, which is ranked #7 on the Best Global Brands table has successfully built its brand on three key factors. First, Toyota understands that brand building is a strategic investment that requires long-term planning. Second, they understand what customers want and have managed to develop and launch products that meet these needs. And third, they have created an internal culture that focuses on teamwork and an understanding of how each employee contributes to the success of the brand. 

Samsung, which entered Best Global Brands in 2001 and is now ranked #6 also offers important insights. First, Samsung invested heavily in R&D to improve its product. Second, they developed a brand platform and brand architecture that laid the foundation for all their marketing activities which meant they could shape perceptions in a coordinated and consistent manner to create greater impact and operational efficiencies at the same time. Both of these brands effectively invested in a long-term brand strategy and saw it pay off. If South Asian brands are willing to do the same, they could potentially see the same kind of success as Toyota and Samsung. 

Q: In December Interbrand will launch the Best Sri Lankan Brands table, which recognises the most valuable Sri Lankan brands. What inspiration can Sri Lankan businesses draw from this?

A: Our goal is to place Sri Lankan brands on Interbrand’s Best Global Brands table, which still doesn’t feature any Indian or South Asian brands. Of course, there are a number of South Asian businesses that are global but to really understand why growing in size doesn’t result in being a global brand, it is useful to understand what truly global brands have to deliver today. We live and operate in an era where individuals with high cognition are in a vantage position and use brands to design their lives. Businesses in local geographies may still be operating on borrowed time but global brands really have no choice and must move at what Interbrand calls the Speed of Life. 

As the world’s largest brand consultancy, we continue to educate senior managers on the distinguishing characteristics of the Best Global Brands and how Interbrand’s partnerships with them through its value-based methodology have been proven to drive growth and long-term profitability. The Best Global Brands strategically focus on brands and realise that businesses are all about people. This is what we mean when we refer to the brand as a strategic, living business asset that can provide long-term competitive advantage. The Best Global Brands also realise that as global competition becomes fiercer and technology continues to level the playing field, the brand’s contribution to shareholder value will only increase. 

" To really understand why growing in size doesn’t result in being a global brand, it is useful to understand what truly global brands have to deliver today. We live and operate in an era where individuals with high cognition are in a vantage position and use brands to design their lives. Businesses in local geographies may still be operating on borrowed time but global brands really have no choice and must move at what Interbrand calls the Speed of Life."

Q: So what should the Best Sri Lankan Brands that aspire to become global brands do? 

A: They must be global frontrunners in designing lives and creating better experiences at the Speed of Life. When doing this, the toughest challenge they will face is a lack of experience in managing the exploding micro experiences within the customer’s journey. This requires finding new relevance and a role in creating better life experiences – an anchor with a meaning system that inspires and connects people: on the inside around culture, and on the outside around experience. 

Historically, businesses have led brands with the business strategy followed by functional strategies – HR, Sourcing, Manufacturing, R&D, Distribution, Sales, Marketing – and somewhere within Marketing was Communications and Branding. At Interbrand, we believe in taking the brand out of Marketing and placing it at the centre of the organisation as a pivotal tool to drive growth for businesses that aspire to become global. The ability to manage this through the brand will create the only possible differentiation in the easy-to-imitate age we live in. As we partner Sri Lankan businesses to change their mindset, perspective, and management of brands, the opportunities are limitless.