British brand power still has strength in depth
Vodafone tops this year’s Brand Finance list of the 50 most valuable brands of British origin, which paints a generally positive picture for the telecoms, retail and banking sectors.
Case study: Vodafone
Vodafone, the last British member of the big five mobile networks, has been named the most valuable British brand in 2010, as calculated by Brand Finance.
Vodafone has nudged past last year’s league leader HSBC. Its brand value has jumped from £17.03bn last year to £17.93bn this year. Brand Finance has calculated that the brand value contributes 16% of company’s total value.
While the brand has strong British roots, it is its performance in foreign markets that has weighted heavily on its brand value, according to Brand Finance chief executive David Haigh. “Vodafone has been growing strongly outside the UK, but it has a tough battle in its home market.”
In a market that is oversaturated and where players have had to come to terms with how to offer new services to customers, Vodafone saw its market leader position taken by O2 about two years ago. Whether the merger of T-Mobile and Orange disrupts the industry further remains to be seen.
To overcome the growing concern that mobile networks are becoming commoditised like the utilities sector, Vodafone is associating its brand with events such as London Fashion Weekend and F1 racing, as well as “money can’t buy” rewards for its customers. And these associations are being noticed. BrainJuicer’s emotional assessment indicates that consumers mention its sponsorship of the McLaren F1 team in a positive way.
However, the phone company’s massive cost- cutting venture announced at the turn of the recession will now spread to the company’s marketing operations, with job cuts of around 10%. The challenge will now be to retain high brand value on a much tighter budget.
Vodafone viewpoint:
Bart Michels, managing director for brand consultancy Added Value, one of Vodafone’s agencies
From an economic perspective, Vodafone has a ruthless, iconic way of treating its brand identity. The way it has pulled together all its visual representations from the high street through to communications and increasingly online is becoming very effective. In the mind of consumers, it creates an obvious marker to associate Vodafone with quality.
Some of the media strategy Vodafone applies, particularly around airports, makes it omnipresent, so that wherever British people travel they have this very reassuring visibility of Vodafone as an iconic brand.
Vodafone is fundamentally a UK business, and I think UK consumers understand that. Combined with its economic scale, people trust it because it gives a sense of being solid and reliable. And in tough economic times, where people want to deal with brands they trust, Vodafone gives that sense of reassurance. A lot of the communications it has been doing recently about being the most trusted and reliable network in terms of quality and coverage reinforces that message.
The mobile brand has a single-minded strategy to be the quality international mobile provider, which will be as true for the UK as anywhere else. I think this will increase the brand value in the future.
Loyalty is very important to the brand. The assets it has, such as Formula 1 and the work it is doing around London Fashion Weekend, are going to become even more present in how it attracts and holds on to customers because it’s a way of rewarding people. This is going to form part of a greater value proposition that Vodafone has been investing in.
Case study: The Co-operative
Creating a more unified group of brands has seen The Co-operative Group reach 19th place in this year’s Brand Finance list, up from 24th spot last year. The brand’s value has grown by about a third from £2.2bn to £2.89bn.
Brand Finance chief executive David Haigh says The Co-op is a brand “worth noting”, after a greater consistency was implemented across all branches of The Co-operative supermarket following the appointment of chief executive Peter Marks three years ago.
The “Blowin’ in the wind” advertising campaign, which positioned The Co-operative as a retailer with a real difference “had great impact”, says Haigh. “The Co-operative has done a lot of work to cross-promote the different areas of its business compared with the old days when it was quite fragmented.”
The Co-operative spokesperson Russ Brady acknowledges: “Peter Marks took the business by the scruff of the neck and brought it together in a way it hadn’t been operating.
“Bringing all the businesses together under The Co-operative identity, including food and financial services, along with the travel, funerals, pharmacy, legal services and electrical, has been a major plus.”
A £2.5bn investment programme has included a focus on branding, store refurbishments and improvements to customer service. However, it is the brand’s ethical and social approaches that have resonated with the public, particularly its stakeholder structure, believes Brady.
He says: “The investment programme, running alongside our core strengths of ethics and responsibility and being a member-owned business, has been a powerful combination in a time where the perils of going down business models based purely on maximising shareholder returns and short-term profitability came to light.
“There is a clear contrast, and people have begun to see The Co-operative as a viable, mainstream alternative in the areas we work in. Our financial services arm is a good example because our member-owned bank didn’t need to ask the Government for a bailout.
“We stayed close to our members during the financial crisis, which even though we might have been labelled as boring and old fashioned, was seen as a virtue because we weren’t lending more than we were getting in. These things have really resonated with our customers and the wider public.”
The past three years has seen a doubling in profits, revenue and membership, thanks in some part to the acquisition of the Somerfield supermarket chain. A merger of the financial services arm with Britannia is also pending.
Despite such heavy commercial activity, The Co-operative’s social agenda is high on the company’s priorities. “It is not just about ‘giving back’ to communities, but is another way of demonstrating brand unity and strength,” says Brady.
“We make profits to give back to our members and to also increase our social footprint through our social goals agenda. Such goals are not something that are just centrally oriented, they are lived and breathed in each individual business with cohesion and consistency.”
Case study: Asda
It seems that starting a price war pays off. Budget supermarket Asda’s brand value has risen by more than a third from £4.12bn to £5.64bn, moving up seven places to ninth in the UK’s on the Brand Finance brands league table.
Asda strategic communications director Nick Agarwal insists that ongoing economic instability and public insecurity means that a value proposition is still crucial to the supermarket sector. He claims: “Our internal data suggests that people are still very nervous about what will happen on the economic front this year.
“We need to make sure we serve new customers as well as those who are still feeling financially challenged, especially with the increase in VAT and public sector cuts that are to come. We are very conscious that value is still going to be at the heart of what people want in the coming 18 months.”
Being a low price champion, not just in groceries but also in clothing, has helped to improve the supermarket’s image over the past year. BrainJuicer’s emotional scoring shows that consumers feel more positive towards the retailer this year, compared with 2009, considering the supermarket to be “good value for money”.
The George clothing brand has become a key part of what Asda offers, claims Agarwal. “It claimed the top spot for volume sales in the last calendar year ahead of Marks & Spencer, Primark and Debenhams. Clearly that shows how positively customers responded to us last year.”
However, an improvement to Asda’s core offering has also had an effect on the retailer’s brand image, he suggests. The supermarket has overhauled the majority of its UK own-label food and drink lines, with an increased focus on locally sourced produce. It also introduced a premium range last year, as upmarket competitor Waitrose introduced its own value “Essentials” line.
“Over the last year we have increased the quality of our food range, particularly what we do from a local sourcing perspective, such as stocking Cartmel sticky toffee pudding in Cumbria or stocking our meat counter in Hounslow from a local concessionaire,” explains Agarwal.
“There is still work to do but we are getting better at tailoring our ranges to the needs of local communities. That adds to a better customer perspective of us.”
About the research
Valuation consultancy Brand Finance uses a combination of financial results and market analysis to produce a list of the 50 most valuable brands with British origins. See www.brandfinance.com for more information.
In conjunction with Brand Finance, market research agency BrainJuicer has produced an emotional analysis of the brands. It asked 6,000 people to rate the brands on emotions such as happiness, sadness, contempt, disgust, anger, fear, surprise or neutrality.
Other rises to note
- Standard Chartered up five places from 18 to 13. Brand value up from £3.3bn to £4.54bn.
- Legal & General up five places from 41 to 36. Brand value up from £963mn to £1.34bn.
Other falls to note
- Aviva down three places from 14 to 17. Brand value down from £4.19bn to £3.64bn.
- RBS down two places from 28 to 30. Brand value down from £1.79bn to £1.76bn.
- Lloyds TSB down six places from 27 to 33. Brand value down from £1.83bn to £1.61bn.
- British Gas down four places from 31 to 35. Brand value up from £1.47bn to £1.49bn.
- Unilever down ten places from 34 to 44. Brand value down £1.16bn to £1.04bn.
The top 50 british brands
