HDFC Bank has topped the first BrandZ study of the 50 most valuable Indian brands by marketing and brand consultancy Millward Brown and advertising group WPP. Four of the top 10 brands are banks -- State Bank of India, ICICI Bank and Kotak Mahindra Bank being the other three. Prasun Basu, Managing Director for South Asia at Millward Brown, says he expected financial services firms to come at the top but not so many of them. In a conversation with Ajita Shashidhar, Basu talks about the methodology of the Indian version of BrandZ and the other brands that made it to the list. Excerpts:
Q- Corporate India has seen quite a few brand valuation studies (from the likes of Interbrand and Brand Finance) being done in the past few years. How is the Millward Brown BrandZ report different?
A- It's quite interesting that in the last couple of years you have seen other companies also coming with brand valuation, which I think underscores the point of how important valuation is. Whether the methodologies are a little different or a lot different, the fact that there are two or three entries which are talking about brand valuation itself tells a very important thing.
Having said that I will underscore the important points of the BrandZ valuation approach. One key thing is that it looks at publicly available financial data, so the authenticity of the data is right up there compared to what anyone else would do.
The second important point where the Millward Brown approach comes in is that it takes a large amount of consumer touch point data. So, ultimately, when you are looking at brand values, you are looking at whether the brand will be successful in future.
Brands which will be successful are those which are connected well with the consumer and are delivering consumer benefit. So, if you step back and think about it, a good valuation should have a very large amount of consumer touch points.
You may want to go back and look at which methodologies have as much consumer touch points as BrandZ has. In my understanding there is nobody who comes close. There is some sporadic branding consumer data available here and there, but ultimately a brand's success comes from the bond they create with their consumers and the future potential of growth comes from there.
We have done close to 30,000 interviews in the recent past to publish this study. The large syndicated studies that are done in this country on which big decisions are taken, many of them don't have this kind of sample size.
Q- What kind of insights did these consumer interactions throw up about the brands that have made it to this list?
A- From a consumer touch point perspective, the key takeaways were that brands which stand for a meaning in consumers' minds have a long way to go on the success path. When I say meaningful, it could be meaningful in terms of having an emotional connect with the consumer, it could be meaningful in the context of serving a specific need.
It has a meaning in the consumer's mind ahead of other brands in the category. So, if I look at a Horlicks or Maggi, they stand for a specific benefit in the consumer's mind either emotionally or functionally, and that plays a big role In brands doing well.
The other things we talk about is differentiation and salience.
Differentiation is about doing something which is different, are you setting a trend, are you delivering something which others don't. It could be either emotional or functional, but they are different from the rest. This takes the brand a long way both in terms of charging a premium from the consumer as well as in terms of future potential to grow.
On the other hand, saliency just doesn't mean TV advertising spends, it means all kinds of visibility, it means distribution, accessibility, availability and all of that. But are you building saliency top of mind, ease of access in the mind of the consumer to pick up a meaningful and differentiated brand? Does that create huge brand equity and huge financial growth for the brand?
Q- Which are the brands that score well on all these parameters?
A- Brands like Maggi, Horlicks, Lipton, Asian Paints, State Bank of India - many of them are salient but all of them might not be balanced brands. Some of them are salient and meaningful, some of them are differentiated and meaningful.
Q- What do you mean when you say 'balanced brands'?
A- There is a set of brands, especially in the service sector, that are doing a great job of creating scale and size. Not all of them have as much of brand equity and brand contribution. FMCG brands are doing a great job of the reverse, which is creating brand contribution. The ones that are on top of the list are balanced brands.
They have done a great job of both. HDFC, SBI, Horlicks, Asian Paints, Castrol are a few examples. Banks like HDFC have done a great job of building consumer connect. There is a very large set of consumers in the Indian financial inclusiveness space which SBI connects extremely well with and consumers find that bank approachable, trustworthy and reliable.
That is meaningful for the consumer. At the same time, they have also built scale, distribution and technology. If you look at SBI of today and SBI of 15 years back, the company has moved a huge way from a technology implementation standpoint. They have kept up with times and that has helped them build scale. Similarly, HDFC has a huge rural and semi-urban presence today. They have done a good job of building scale, reaching out to the consumer as well as build consumer depth. So, balanced brands build scale to get financial value and they build depth with consumers to amplify that for the future.
Q- Which are the brands which need to work harder to be classified as a balanced brand?
A- The telecom space is a difficult space with a lot of price competition. You may find brands there which need to work harder to build above the whole price competitiveness and either be meaningful or be different. Many a time these are salient, but perhaps not different enough or meaningful enough. That's a category where one could build more brand power.
Q- Your report also says that Indian conglomerate brands having done better than MNCs.
A- There are facets on which they are doing better. Indian conglomerates have built scale and differentiation. Some of them have followed a master brand strategy. They have deep pockets, opportunity to invest, management bandwidth and scale that they have used very well. So, I am a FMCG conglomerate like ITC and I am able to use my retail infrastructure beyond a specific category or specific brand. Tata, Godrej, ITC are great examples who have used their learning from one category into another. So, transfer of learning, hence, management bandwidth, thinking at the top and managing scale across their various businesses are the key advantages of Indian conglomerates. Since they have size, they have deep pockets and they can invest for the long run. That is playing back in their favour.
Q- What do the MNCs need to learn from the Indian conglomerates?
A- The MNCs need to learn to take risks and be more bold about scaling up. Essentially, MNCs are in single categories for most part, so learn from the Indian brethren as to how they have scaled across and see what value can be gotten from there. The story of the Indian conglomerates is a great success story and the MNCs can learn from there. The Indian conglomerates have learnt professionalism and management tenets from the MNCs. Similarly, the MNCs can learn about risk-taking and boldness that the Indian conglomerates have had.