Sure Coca-Cola, Nestle and Nokia loom large in every market in the world. But that doesn't mean they can't be beat.
Even against leading global names, local brands can perform well. Maybe they can't compete head-to-head with a worldwide giant in the same product category, but they can rate high among consumers in terms of trust and likeability.
That's the crucial lesson emerging from data collected for Forbes.com by Young & Rubicam through its ongoing BrandAsset Valuator survey. We asked Y&R to identify for us the most respected local brands in 10 emerging market economies. Some of the results surprised us.
According to the WPP subsidiary, the most respected local brand in India is Good Knight, a maker of mosquito repellant owned by a joint venture between India's Grodrej Group and Sara Lee. In Turkey, Istanbul soccer club Galatasaray wields the most respect as a brand. And in Argentina, dairy company La Serenisima is not only the top local brand but commands an even higher rating than Coke , Sony or Gillette.
"In developing markets, it's easier for a brand to get established and make its presence felt and get consumer commitment,'' says Belle Frank, Y&R executive vice president and director of strategy and applied research. "The simplest explanation is there's less choice."
While premium, "aspirational" brands are important in emerging markets too, there's a greater emphasis on what a consumer is receiving in return for his or her money, according to Martin Roll, chief executive of VentureRepublic, a brand consultancy based in Singapore.
"They're a little more sensitive to, 'What am I getting,' '' Roll says. "You tend to focus more on the price-value aspect and a little more on the quality aspect. It's simply making sure that the quality you're getting is exactly what you pay for."
Along with a host of other data, Y&R's BrandAsset Valuator surveys measure consumer "esteem," which reflects how much a brand is liked, and "knowledge," which gauges familiarity and understanding. The combination of those two indicators yields what the firm denotes as "brand stature."
These criteria yielded the most respected brands in these markets--not the biggest or the most valuable. To put the results in context, the same criteria applied to U.S. brands found that the most respected names were UPS and Sears' Craftsman line of tools.
State-owned companies dominate the top local brands in China, with wireless carrier China Mobile at the top of the heap. And despite complaints about service quality aimed at its state-run parent Saudi Telecommunications, STC wireless subsidiary Al Jawwal was the most respected local brand in Saudi Arabia. While frustrated U.S. wireless customers might find such rankings rather amusing, the rapid expansion of cellular services in those two markets probably helps account for why they rate so high among consumers.
Another telecom topped the brand rankings in Mexico--Telefonos de Mexico, or Telmex, the former state-owned monopoly, which was sold off in 1990 to a group of investors led by billionaire tycoon Carlos Slim Hiu.
Banks rule supreme in Russia and Thailand, where state-owned SberBank and publicly traded Bangkok Bank commanded the most respect among local brands. In fact, the Thais seem to be just ga-ga over their financial institutions, making banks four of the country's top 10 brands.
Meanwhile, the appeal of the Galatasaray brand in Turkey isn't hard to understand--the soccer team won the coveted UEFA Cup in 2000, making it the first Turkish squad ever to become European champions. Still, it was an impressive showing of brand strength: Even in soccer-mad Argentina and Brazil, no sports franchises were able to crack the top 50 brands in terms of respect.
Louis Hau, Forbes.com. October 23, 2007
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