Page 20 - Connecting Media, Technology And Brands To Tomorrow's Consumer

Section 02
10-Year Trends // MULTINATIONAL-REGIONAL & FAST GROWING
10-YEAR RESULTS
9. A WORLD OF DIFFERENCE
Multinationals Different, and regionals, Salient
10. VALUE RISES IN ASIA
Brand Value in China up 10-fold in 10 years
The brands that comprise the BrandZTM Top 100 Most Valuable Global Brands are by definition the most international brands
in the world. Not surprisingly, about two-thirds of the brands are multinational in the broadest sense, with businesses that extend across the globe. The businesses of the remaining one-third cross borders too, but primarily within the surrounding region.
Both kinds of brands achieve high value. But the average Brand Value of multinational brands is about 25 percent higher than that of regional brands. Multinational brands
are older and involved in wider activities. Most interesting, multinational and regional brands achieve their Brand Power in contrasting ways.
Multinational brands excel in being seen as Different. That’s because wherever a multinational brand competes, it usually faces a regional brand leader setting the category standard. The regional brands trade on Salience because they’re present, widely distributed and heavily advertised. They’re Meaningful because of their local affinity.
Consumers also view the regional brands as more responsible, probably because
the brands are more connected with the regions that they serve. Consumers view multinational brands as responsible too, but not to the same extent.
Strengths of multinational and regional brands differ
Both multinational and regional brands achieve high value. But the average Brand Value of multinational brands is about 25 percent higher than regional Brand Value.
North America, home to the BrandZTM Top 10 Most Valuable Global Brands, still comprises two- thirds of the total Brand Value of the BrandZTM Top 100. That Brand Value increased over 137 percent during the past 10 years, a slightly faster growth rate than the Top 100 overall.
The Brand Value of brands based in the UK and Continental Europe also grew, but more modestly over the last 10 years. The value
of brands from Australia and from Asian markets, including Japan and South Korea, also steadily appreciated.
During the same period, however, the number of Chinese brands represented in the BrandZTM Global Top 100 increased from just one in 2006 to 14 in 2015, and the total Brand Power of Chinese brands increased 1,004 percent.
In just a decade, China developed from representing only minimal Brand Value in the BrandZTM Top 100 Most Valuable Global brands to being the second center of Brand Value growth after North America.
Brand value growth velocity shifts to China
The number of Chinese brands represented in the BrandZTM Global Top 100 increased from just one in 2006 to 14 in 2015, and the total Brand Power of Chinese brands increased 1,004 percent.
2006
2015
$373.8bn $112.3bn
$186.9bn
$912.7bn
$2,164.2bn
$303.0bn
$68.7bn $120.6bn
$39.2bn
Meaningful 111
Different
Salient 117
133
Multinational Regional
Average Brand Value
US $35.3 bil.
US $27.8 bil.
121 120 112
Responsible
105
112
Source: BrandZTM / Millward Brown
+137%
+23%
+ 1,004%
BRAND IMPLICATIONS
It’s critical for the multinational brands to emphasize their difference and
to make that difference relevant in each regional market in which they compete. To be more accepted in each regional market, multinational brands need to act responsibly and guard against the perception that big
is automatically bad. Regional brands with aspirations to be multinational need to understand the basis of their meaningful difference, how exportable it is, and how it enables the brand to fit in or disrupt new markets.
Source: BrandZTM / Millward Brown
$432.4bn
North America Continental Europe UK
China
Other Asia/Australia
38 BrandZTM Top 100 Most Valuable Global Brands 2015
39
BRAND IMPLICATIONS
The competitive landscape is about to change. Chinese brands have so far built value in their home market. But the examples of the technology brand Huawei, and Alibaba, the e-commerce leader, suggest that Chinese brands are following the same arc as Japanese and South Korean brands, moving from low-cost manufacturing to added value, and from regional to multinational. Most Chinese brands will expand first to other fast-growing markets, and these brands move quickly. Many brands from fast- growing markets have already become the key competitors against western brands at the local level. Some of them are turning into key global competitors.
+55%
+64%