Mauricio Martínez
Managing Director, Insights Division
Kantar México

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What Makes a Valuable Brand?

By Mauricio Martínez | Wed, 07/27/2022 - 14:00

Marketing is often seen as a series of activities, at best as links in a chain where effect follows action. In reality, the world is dynamic and sometimes consumers perceive brands to be half-real/half-virtual things.

The consumer lives in a sea of ​​brands that are around him all the time. Brands touch it hundreds of times a day, mostly in the smallest of ways without you even realizing it. Only some of these contacts are actively controlled by marketers but they are all part of the brand experience that shapes consumer attitudes and actions.

Equally, consumers are also creating many brand outcomes every day, some more obvious than others. A click, a search, a web page visit, a referral, a review, a moment of consumption, reading the packaging: all of these fresh connections are all potentially as important as a sale.

Multiple Value Streams, Many Unrecognized

Marketers are too often distracted by what can be easily measured, ignoring the broader, cumulative effects of their activities.

The value that a brand creates for your business is often understated. Business value comes in many forms and a strong brand can support each of them:

  • Brands predispose consumers to choose a product or service. Increasing the number of people buying or choosing your brand (or their frequency of doing so) increases your volume share.
  • Brands imbue products with qualities that consumers are willing to pay more for. Higher prices or lower promotional rates improve your value share, margin and profits.
  • Brands exist in the minds of people. Strong, well-built, and well-maintained brands persist in memory and deliver these value streams over time, lasting for years.
  • Brands have impacts outside the business. They can improve – or damage – aspects of society, the environment or the lives of individuals.

The Flow of Connections Capitalizes on a Brand

All these different forms of value are connected. The variables involved are quantifiable. We call this formula the Meaningfully Different framework, and it helps businesses increase the value of their brands – their sales, their share price and their impact on society and the planet.

The Meaningfully Different framework measures the value of brand equity accumulated in the minds of consumers – its impact on penetration and market share; its impact on willingness to pay; and its impact on future growth potential.

Each brand is unique, represented by connections that each individual consumer makes in their mind. Brands are like homes, they are made up of facts, memories and experiences, inhabited by different personalities.

Each decision point is also unique, with an ever-changing context of needs. Brands face real-world factors like availability, pricing, and prominence. All of these impressions, connections, and experience points add up to this concept of brand equity.

The Ripple Effect From Consumer Decisions and How to Measure It

Consumer decisions are fluid. Kantar through its various studies has found that the connections between memory and context influence decision-making. For example: promotions create the expectation of lower prices; the poor provision of some service can trigger a search to replace it.

This landscape can be assessed through brand research, which allows us to measure the flow of inputs, we can measure the connections that consumers are making with each other, and we can measure the flow of value.

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According to a BrandZ analysis, we know that the brand's connections with the consumer remain in their memory. These connections can take the form of knowledge – knowing what a brand or product is, how it works, and what needs it will meet. In addition to the fact that consumers often associate feelings, connections to a place, people or time in their lives in conjunction with the previous experience with the brand.

The brain assembles the concept through connections of knowledge, feelings, and experiences. A strong brand has this same balance and depth: a wide variety of relevant thoughts and feelings evoked in the mind of the consumer.

Stronger marks are more quickly and easily evoked, giving you high mental readiness. These guide intuitive responses when a decision is required and support reflection, rethinking, and justification around that decision.

What Are the Most Valuable Brands?

This year, Apple is at the top of the Kantar BrandZ ranking, and is on its way to becoming the first trillion-dollar brand. With a brand value of US$947.1 billion, Apple stands out for its high degree of differentiation and continued diversification across its hardware, software and services portfolio. Google moves up to second place and is one of the fastest risers in the ranking, increasing its brand value by 79 percent to US$819.6 billion. Google’s suite of work and productivity apps have made it an essential part of consumers’ lives worldwide.

As we mentioned before, the most valuable brands in the world are those that stand out from the crowd in a way that creates a positive difference in people's lives. This difference represents a reserve of positive connections in the minds of consumers that generate a predisposition in choices toward brands today and tomorrow. Consequently, brand building is closely linked to the cash flow that it will produce in the present and the future.

Photo by:   Mauricio Martínez