BrandZ Top 50 Most Valuable Indian Brands Report

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This is the first year Millward Brown and WPP have released the BrandZ Top 50 Most Valuable Indian Brands. We evaluated local and international brands leading in value in the Indian market. This newest BrandZ™ ranking and report is an addition to the BrandZ Top 100 Most Valuable Global Brands ranking introduced in 2006, and followed by annual rankings covering both Latin America and China, each to be published later this year.

The results of the ranking and report offer insightful, strategic information highly relevant both to local marketers and international brand leaders growing brands in the Indian markets. The BrandZ methodology now also fully incorporates Millward Brown's Meaningfully Different Framework, which has revolutionized how marketers look at and measure brand equity.

We gathered brand perceptions from consumers across the Indian market, in both urban and rural areas, and asked about brands with all kinds of ownership structures: individual private brands, Indian family owned conglomerates, MNCs (Multinational Corporations), and SOEs (State Owned Enterprises).

We selected brands that met these three qualifying criteria:

They reported positive earnings;
The brand or corporate brand owner was publicly traded in India; and,
In the case of banks, at least 25 percent of revenue came from retail business.
This approach produced a carefully conceived ranking of brands in 13 consumer-facing categories, such as automobiles, home care, personal care, soft drinks, and food and dairy. The ranking does not include any business-to-business brands, regardless of value, because they are outside the scope of this report.

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BrandZ Top 50 Most Valuable Indian Brands Report

  1. 1. The growing opportunity of India and the changing Indian consumer challenges all brands to remain relevant and different. Every brand has its story. To watch short individual videos about each of the BrandZTM Top 50 Most Valuable Indian Brands stories and unique content about India scan the QR code or go to: www.BrandZ.com/stories
  2. 2. 6 7 TOP 50 Most Valuable Indian Brands 2014 India enters new period of widely shared optimism Timing is everything. Just a few months ago, India experienced a transformative moment when voters overwhelmingly rejected the national ruling party in favor of a challenger who promised to reenergize the economy and promote a culture of new possibilities and inclusive opportunity. Now we’re inaugurating the WPP BrandZ™ Top 50 Most Valuable Indian Brands 2014, a groundbreaking study that ranks these accomplished brands, analyzes their success, and points out important similarities and differences among the BrandZ™ brand valuation rankings in India, China, Brazil, Latin America, and the BrandZ™ Top 100 Most Valuable Global Brands. The BrandZ™ Top 50 Most Valuable Indian Brands 2014 is the first edition of an annual study that will chart and anticipate the rapidly changing environment for brands in India and the changing value of India’s most valuable brands. Whether you’re an Indian company or international company, already doing business in India or considering it, I promise that in this report you’ll find knowledge and insights to help create and grow brands in India more effectively. On page 22, Take Aways provide succinct action-oriented prescriptive recommendations from our analysis for brand success. We’ve also included summaries of India’s Top 50 most valuable brands. Brand experts from WPP Companies across India share their market wisdom in sharp insights and extensive thought leadership and best practices essays. And we’ve presented all this with stunning photography and a vibrant design as colorful as India itself. As you read the report, consider this: - India’s consumers like brands and Indian companies are sophisticated brand marketers. In India, 86 percent of brands are private. In China, 45 percent of brands are state owned. - India is home to all kinds of brands. Global brands and national brands thrive, but so do innumerable regional brands that are targeted specifically to particular segments of this diverse country. And because India is home to 1.25 billion people, even a regional brand has scale. - India is both old and young. India is one of the world’s oldest civilizations but a young nation, independent since 1947. The median age of the population is 27, compared with close to 40 in the UK and US. Ecommerce is beginning to boom in India, and the leading global Internet and social media brands are active. - Valuable Indian brands provide solid shareholder ROI. A portfolio of the BrandZ™ Top 50 Most Valuable Indian Brands significantly outperformed India’s SENSEX Index over the past five years. There are challenges, of course. The pace of change is more deliberate and slower in India than in China, for example. That’s in part a consequence of India’s democratic heritage, a fact that also ensures a high degree of political stability. Our timing was not coincidental At WPP, the global communications services leader, our companies have been engaged in India for over 85 years. Today, 13,000 people including associates work across India in Mumbai, Delhi, Bengaluru, Chennai, Kolkata, Hyderabad and many other cities. We provide advertising, marketing, insight, media, digital, shopper marketing and PR expertise. It’s part of our global presence in 110 countries. By linking all this talent, creativity, wisdom, and horizontality, we amplify global trends and insights that help our clients in useful and unique ways. We invite you to access our unrivaled BrandZ™ resource library. Along with the new BrandZ™ Top 50 Most Valuable Indian Brands report, the library includes these annual studies: BrandZ™ Top 100 Most Valuable Global Brands, BrandZ™ Top 100 Most Valuable Chinese Brands, and BrandZ™ Top 50 Most Valuable Latin American Brands. To download these and other reports, please visit www.BrandZ. com. For the interactive BrandZ™ mobile apps go to www.BrandZ. com/mobile. The backbone of all this intelligence remains the WPP proprietary BrandZ™, the world’s largest, consumer-focused source of brand equity knowledge and insight, and WPP’s proprietary BrandZ™ brand valuation methodology. First we analyze relevant corporate financial data and strip away everything that doesn’t pertain to the branded business. Then we take a critical step that makes BrandZ™ unique and definitive among brand valuation methodologies. We conduct ongoing, in-depth quantitative consumer research with more than 170,000 consumers annually, across more than 30 countries, to assess consumer attitudes about, and relationships with, over 10,000 brands. Our database includes information from over two million consumers. It reveals the power of the brand in the mind of the consumer that creates predisposition to buy and, most importantly, validates a positive correlation with better sales performance. At WPP, we’re passionate about using our creativity to create and build strong, differentiated brands that deliver lasting shareholder value. To learn more about how to apply our experience and expertise to benefit your brand, please contact any of the WPP companies that contributed expertise to this report. Turn to page 214 for summaries of each company and the contact details of key executives. Or feel free to contact me directly. Sincerely, David Roth WPP droth@wpp.com Twitter: davidrothlondon Blog: www.davidroth.com Conditions ripe for brand building Welcome Brand Selection Criteria Our proprietary BrandZ™ brand valuation methodology makes the Top 50 Most Valuable Indian Brands the definitive study of brands in India. The uniquely consumer-facing BrandZ™ methodology combines extensive and on-going consumer research with rigorous financial analysis. (See page 206 for full methodology.) We gathered brand perceptions from consumers across the Indian market, in both urban and rural areas, and asked about brands with all kinds of ownership structures: individual private brands, Indian family owned conglomerates, MNCs (Multinational Corporations), and SOEs (State Owned Enterprises). We selected brands that met these three qualifying criteria: - They reported positive earnings; - The brand or corporate brand owner was publicly traded in India; and, - In the case of banks, at least 25 percent of revenue came from retail business. This approach produced a carefully conceived ranking of brands in 13 consumer-facing categories, such as automobiles, home care, personal care, soft drinks, and food and dairy. The ranking does not include any business-to-business brands, regardless of value, because they are outside the scope of this report. To learn more about the BrandZTM valuation methodology, please contact: Elspeth Cheung, Global BrandZ™ Valuation Director, elspeth.cheung@millardbrown.com.
  3. 3. 8 9 Part 1. Introduction Overview Themes 12 India Top 50 Portfolio 13 Insights 16 Highlights Key Results 18 Cross Category Trends 20 Take Aways 22 Background Economy and Demographics 28 History 30 Market Structure 34 Media Spending 36 BrandZ™ Analysis Categories and Brands 38 Brand Ownership 42 Brand Age 44 Brand Contribution 48 Brand India 50 Part 2. Thought Leadership Emerging Consumers 54 by Divya Khanna, JWT Millennials 56 by Upasana Roy, Ogilvy Premiumization 58 by Mythili Chandrasekar, JWT Retail Revolution 60 by Rajan Zachariah, Smollan Rural Mindset 62 by Soumitra Patnekar, Grey Worldwide Value 64 by Shaziya Khan, JWT Part 3. The India Top 50 India Top 50 Ranking 68 Category Summaries 70 Brand Profiles 1-10 78 Our Insights 98 Brand Profiles 11-20 100 Our Insights 120 Brand Profiles 21-30 124 Our Insights 144 Brand Profiles 31-40 146 Our Insights 166 Brand Profiles 41-50 170 Our Insights 190 Part 4. Brand Building Best Practices Brand Experience 194 by Gazala Vahanvati, Landor Total Consumer Experience 196 by Vivek Das, Blue Hive Expanding FMCG 198 by Urmi Saha, Millward Brown The Next Generation 200 by Devang Raiyani, Grey Bridging Cultures 202 by Ganapathy Balagopalan, Ogilvy Part 5. Resources BrandZ™ Valuation Methodology 206 BrandZ™ Reports, Apps and iPad Magazines 210 WPP Resources WPP Company Contributors 214 WPP Brand Building Experts 218 BrandZ™ India Top 50 Team 220 BrandZ™ Valuation Contact Details 222 WPP in India 223 Contents TOP 50 Most Valuable Indian Brands 2014
  4. 4. Total Value of BrandZTM Top 50 Most Valuable Indian Brands = $70 billion50Brands 13Categories Brands formed since liberalization total the greatest value... %ofTotalValueofBrandZTM Top50MostValuableIndianBrands Rank:1 Value:US$9,425Mil. Rank:2 Value:US$8,217Mil. Rank:3 Value:US$6,828Mil. Rank:4 Value:US$3,536Mil. Rank:8 Value:US$1,882Mil. Rank:9 Value:US$1,721Mil. Rank:10 Value:US$1,636Mil. 1991 1947 19% 37% 44% Brandsestablished beforeIndependence Brandsestablished afterIndependencebut beforeliberalization Brandsestablished afterliberalization FMCG brands lead Brand Contribution The Brand Contribution leaders have long heritage in India. BRAND CONTRIBUTION measures the influence of brand alone on earnings, on a 1-to-5 scale, 5 highest Strong brands outperform the market The BrandZ™ Indian Top 50 Portfolio significantly outperformed India’s SENSEX over the past five years. 201% 74% 09 0%-250% 10 11 12 13 14 BrandZ™IndianTop50Portfolio SENSEXIndia 16% 17% 33% 34% SOEs MNCs Indianfamilyconglomerates Privateindependents Brand ownership among the Top 50 includes private independents, Indian family conglomerates, MNCs (Multinational Corporations) and SOEs (State Owned Enterprises). %ofTotalValueofBrandZTM Top50MostValuableIndianBrands Family conglomerates and private independents dominate BrandContributionValue BrandContributionRanking 5 5 5 5 5 5 5 4 4 4 Alcohol - 4.7% Automobiles - 12.2% Banks - 35.8% FoodandDairy-8.3% Home Care - 3.3% Insurance - 1.1% Jewelry - 1.3% Lubricants - 1.8% Motor Fuels - 3.5% Paints - 4.7% Personal Care - 5.3% Soft Drinks - 1.2% Telecoms - 16.9% %ofTotalValueofBrandZTM Top 50MostValuableIndianBrands 7 of the Top 10 brands come from the Service sector
  5. 5. Part 1 Introduction
  6. 6. Part 1 // Introduction - Overview India is on the cusp of new optimism and brand growth The BrandZ™ Top 50 Most Valuable Indian Brands 2014 totals $70 billion in value. Service sector brands, banks and telecoms primarily, drive that result. Consumer product brands also contribute, powered by Indian family conglomerates and MNCs (Multinational Corporations). The value of the India Top 50 reflects the efforts of these brands to serve the rising middle class and those who aspire to it, both in India’s cities and countryside. Brand value growth is taking place as India experiences a resurgence of hope following the election in May of Prime Minister Narendra Modi, and a shift from the Indian National Congress party, which ruled India much of the time since independence in 1947. Indians from diverse backgrounds expressed dissatisfaction with the status quo, and their desire for a society based on equal opportunity rather than stratification and entitlements. The immediate impact for brands seems to be that a country market that’s been hospitable is about to become even more supportive and welcoming. And the potential is enormous. Perhaps the world’s oldest civilization, India is among its youngest nations. Its population totals 1.25 billion, with a median age of 27, around 10 years younger than the US, UK, and even China. There is this caveat. As an ancient civilization, the birthplace of Hinduism, Buddhism, Jainism, and Sikhism, the home of 22 regional languages, a place where cultural traditions can change village-by-village, the only definitive statement about India is that nothing is simple. The country has been on the cusp of change before. The optimism following independence ended in failed economic policies and political trauma, including the assassinations of two prime ministers. Change happens slowly in India, modulated by the competing interests of the country’s democratic polity, and an Indian view of time and progress that respects the past while embracing the present. Daily life unfolds in this duality. India is not a teardown nation where infrastructure appears almost overnight even if heritage is obliterated in the process. It’s a place that attempts to advance with material and spiritual needs aligned. If the pace of growth is slow, it’s also inexorable and relatively stable. Growing brand confidence Indian entrepreneurs have become more sophisticated and focused on brand building. Leadership of the Indian family owned conglomerates has moved from the entrepreneurial founding generations to younger family members and professional managers with extensive business education. To satisfy the demands of Indian consumers, Indian brands perfected their value-for-money propositions. And the presence of competitive MNCs forced Indian brands to innovate, certainly in FMCG (Fast Moving consumer Goods), but also in categories like cars, where the Indian brand Mahindra leads the SUV segment. The mobile phone category illustrates the growing confidence of Indian brands. After initially offering low priced imitations of global smart phone brands, Indian brands, such as Micromax, Karbonn, and Lava, improved functionality and gained credibility, in part by using international celebrities as brand ambassadors to suggest parity between Indian and global brands. Micromax scaled up to sell phones internationally at a competitive price. Similarly, Indian motorcycle brands, like Hero, Bajaj, and TVS are expanding into Southeast Asia, Africa, and other developing markets where the experience of Indian brands prepares them to serve the needs of value-focused consumers. For categories, like wellness, Indian brands offer the additional advantage of heritage. Examples include the Parachute brand of Marico and the ayurvedic offerings of Dabur, like its flagship Vatika hair care brand. The Indian family conglomerates most clearly demonstrate the potential power of Indian brands. Having developed respected master brands across disparate categories in India, these dynastic organizations are building international presence. The Aditya Birla Group operates industrial businesses in 36 countries. Over time, Tata companies have acquired brands as different as Jaguar Land Rover and Tetley Tea. 14 15 Overview // Themes May 09 0% 50% 100% 150% 200% 250% May 10 May 11 May 12 May 13 May 14Nov 09 Nov 10 Nov 11 Nov 12 Nov 13 BrandZ™ India Top 50 Portfolio outperforms India’s SENSEX The strong stock growth of the India Top 50 confirms that valuable brands deliver solid shareholder returns, our BrandZ™ analysis shows. We created a stock portfolio of the BrandZ™ Top 50 Most Valuable Indian Brands 2014 and compared its performance over the past five years with the performance of India’s SENSEX. Between May 2009 and May 2014, The BrandZ™ India Top 50 Portfolio appreciated 201 percent compared with a rise of 74 percent for SENSEX. The BrandZ™ India Top 50 Portfolio includes all the brands in BrandZ™ Top 50 Most Valuable Indian Brands. SENSEX is a weighted Index of 30 stocks listed on the Bombay Stock Exchange. Confirming the connection between strong brand power and positive stock market performance, the BrandZ™ India Top 50 Portfolio significantly outperformed India’s SENSEX over the past five years. Sources: BrandZ™/ Millward Brown, Bloomberg 201% 74% BrandZ™ India Top 50 Portfolio SENSEX India TOP 50 Most Valuable Indian Brands 2014
  7. 7. Part 1 // Introduction - Overview 16 17 Overview // Themes Trends and countertrends These developments unfold in an Indian way. Trends meet countertrends and change happens in this tension, as these current examples suggest: “Premiumization”/Inclusiveness Driven by rising aspirations and income, brands across categories are introducing more premium products and services. But premium is only a narrow band of the potential. The move to premium alone accrues only short- term results. The larger opportunity is in achieving inclusiveness by making most brands more available and affordable. National/Regional Because of India’s rural character, with languages and traditions that sometimes change within short distances, brand preferences change too. Especially in FMCG, multiple regional brands compete successfully with national brands. Smart local consumers purchase the local brand over the national when they believe they’re getting similar benefits at a lower price. Brands face two clear and opposing opportunities: growth by consolidating regional brands into powerful national brands; and growth by developing regional brands which, in India, can have economic scale. Talent Drain/Talent Pool No consumer technology brands appear in the BrandZ™ India Top 50. In contrast, several of China’s most valuable brands are in technology. This absence of valuable technology brands in India is striking because of the presence of so many Indian entrepreneurs in major tech companies worldwide, but it’s easily explained. Global consumer technology brands – Google, Facebook, Twitter, LinkedIn – operate relatively freely in India, so there’s no gap in the market. The recent rise of India tech brands, particularly in ecommerce, indicates that Indians who may have pursued their technology ambitions abroad in the past, are increasingly contributing their talents at home, a development that should have tremendous impact for the technology category and brands going forward. An expanding opportunity Influenced by the Internet and social media, Indians with widely different income levels share similar aspirations. But the affordability gap remains. Although India is becoming wealthier, even in rural areas, almost 30 percent of the population lived below the poverty line as of 2010, according to the World Bank. Many brands support efforts to help create a country that’s economically and socially inclusive. As a democracy, India depends on organic cohesiveness, rather than imposed order, to keep the nation whole. It has experienced traumatic periods when cohesiveness wore thin. The determination to achieve inclusivity is in the DNA of India’s leading brands across all sectors. They don’t treat CSR (Corporate Social Responsibility) as an add-on, but rather as a relevant business function. FMCG brands that produce laundry products often become involved in hygiene and water conservation initiatives. Banks expand into underserved rural areas where initial ROI may not be significant but the potential of the unbanked is great. Finally, there’s the Indian Diaspora. While 1.25 billion Indians live in India, perhaps another 22 million Indians, almost the population of Australia, live in other parts of the world. These people form a receptive audience for exported Indian brands. And many of them live abroad only temporarily, for study or work, returning to India with knowledge to contribute, money to spend, and brand sophistication that will influence purchasing.
  8. 8. Part 1 // Introduction - Overview Key factors differentiate India and impact brand development Service sector brands dominate in value Service sector brands – the banks, insurance companies, and telecoms – account for the largest proportion of value in the BrandZ™ Top 50 Most Valuable Indian Brands 2014. Many of these brands are relatively young, formed in the last 25 years after the market liberalization of the 1990s. They have invested tremendously in building brand and scale. The strength of this sector is not particular to India. Because financial institutions and telecoms are fundamental to the growth of nations, the service sector generates high brand value across the BRIC countries. However, in India, service brands account for a rising proportion of GDP growth, formerly driven primarily by agriculture. And distinctive to India, these brands primarily are privately owned, not SOEs (State Owned Enterprises). Because of the nature of their businesses, and because they understand that opportunity in a land of 1.25 billion inhabitants is not limited to the expanding middle class – as significant as that is – these brands also organize their offerings to meet the needs and aspirations of the broadest possible market, as they expand both in urban and rural areas. Banks, in particular, articulate the need for inclusiveness, and advance a progressive, and commercially viable, social agenda to meet the needs of the unbanked. Telecoms promote programs to make their services widely affordable. While building scale, however, the service sector brands have not sufficiently developed deep relationships with their customers. BRAND IMPLICATIONS Having built scale, the service sector brands are salient, a BrandZ™ measurement of being familiar on a top-of-mind basis. They’ve have had a meaningful impact on improving the lives of many Indians, opening bank branches in remote regions and empowering small vendors with mobile phones. Consumers, however, don’t see these brands as meaningfully different. Meaningful (meeting functional needs and cultivating emotional attachment) and different (being distinguished, even a trend setter) are, along with salient, the BrandZ™ components of brand equity. Service brands need to invest in building customer relationships. They need to evolve from being providers of products and services to being trusted service partners. Having said that, Indian service brands have been relatively innovative. Three banks appear in the India Top 5, and each scores high in brand contribution, the BrandZ™ measurement of brand influence alone, when all other factors, including financial power, are stripped away. FMCG brands excel in brand contribution Of the Top 10 Indian brands in brand contribution, nine are in FMCG (Fast Moving Consumer Goods) categories. While these brands lack the near monopolistic influence of the service category brands, they score well in the BrandZ™ MDF (Meaningful Different Framework) of brand equity. And the brands are salient, well known to the point that they come easily to mind. These brands achieved MDF strength in a variety of ways, some of which pertain to brand age and brand ownership. Brand age in India divides into three periods: before independence in 1947; after independence but before market liberalization in 1991; and post liberalization. In contrast to the service brands, mostly formed post liberalization, the FMCG brands came into being much earlier. Many have long Indian heritage. They’re all private. Individual Indian entrepreneurs formed a few of the brands. Some brands fit under the master brand of an Indian family conglomerate with a portfolio of brands across categories. Others are brands that MNCs (Multinational Corporations) introduced to India which, over decades of marketing, have become Indian brands in the consumer mind. BRAND IMPLICATIONS Although these brands have achieved strong brand equity, they lack the scale of the service sector brands, in part because the nature of their categories requires reaching market segments rather than the full mass market. Their strong equity enables these brands to build scale without sacrificing their meaningful difference, an important advantage. However, these brands haven’t fully leveraged their equity to pursue new business opportunities and increase earnings. Private brands comprise most of the India Top 50 Brand ownership reveals one of the key distinctions between India and other BRIC markets. Over 85 percent of the India Top 50 most valuable brands are privately owned. In China, valuable brands are much more likely to be state owned. While private brands predominate in Brazil, ownership is not the determinative brand success factor that it is in India. The difference in India is the presence of Indian family conglomerates and MNCs. The family owned conglomerates have succeeded where conglomerates often fail, creating master brands that convey trust and reliability across disparate categories, while at the same time accruing economies of scale. Additionally, the family conglomerates have succeeded where family businesses often fail, in transmitting a sense of mission and business acumen to successive generations. Similarly, the MNCs have achieved an elusive goal of multinationals. MNCs in India have combined the advantages of global scale and expertise with the need to gain deep local market insight and be perceived as a local brand. BRAND IMPLICATIONS The family owned conglomerates need to continue do what they do best, build businesses using their respected master brands. But they need to consider potential shifts in consumer attitude toward master brands. While young people respect tradition, they’re also more inclined look beyond it, for new ideas and experiences. At the same time, the family conglomerates need to prepare for audiences where the master brand has little or no currency – outside of India. Having built world-class marketing competence, some of the family owned conglomerates are ready for new growth stages, with expansion abroad and the acquisition of international brands for introduction in India. The MNCs have done an excellent job of building valuable brands. Of the Top 50 most valuable Indian brands, 34 percent are owned by MNCs. The MNCs now have an opportunity to build scale, in part by leveraging their market presence to rapidly reach groups of consumer who desire – and for the first time can afford – their products and services. Brands face greater potential and competition India’s history, culture, and democratic values make it a tolerant country open to new ideas. It’s also a country that’s hospitable to brands. Indian consumers like brands. They have long experience with brands. These conditions make the market fertile for new brand entries. But it also makes the market competitive. The relative lack of SOEs and the predominance of privately ownership, mean that Indian brands have significant brand building experience. In the BrandZ™ Power Index, a measurement of brand equity, the India Top 50 most valuable brands score virtually the same as the Global Top 50. Both new entrants and existing Indian brands face similar market opportunities. These include: reaching the growing number of consumers now able to purchase products and services; and communicating both to the mass market and to market segments, which have economic scale in India. BRAND IMPLICATIONS Until now, salience has been important. Many Indian brands build top-of-mind awareness with celebrity brand ambassadors, often movie stars or sports stars. Those tactics will go only so far as the Indian market evolves. Consumers will look for brands that promise and deliver meaningful and differentiating benefits that improve life in some way. In part because of government policies, some sectors have been more protected than others from foreign competition. The absence of significant overseas competitors in retailing, for example, has meant that the manufacturer brand owner drives brand building. In countries with more developed modern retail sectors, the brand owner and retailer share brand building power, or compete for it. 18 19 Overview // Insights 1 2 3 4 TOP 50 Most Valuable Indian Brands 2014
  9. 9. India Top 50 reaches US$ 70 billion in value The combined value of the BrandZ™ Top 50 Most Valuable Indian Brands reached almost US$ 70 billion. Brand equity is strong In creating a consumer predisposition to purchase, Indian brands performed better than comparable brands in Brazil or China, and equal to the top brands globally. In the BrandZ™ Power Index, a brand equity measurement, the India Top 50 scored 222, compared with a 221 score for the Global Top 50. The average score for all brands worldwide is 100. Mega brands dominate The Top 5 brands account for 45 percent of the total value of the BrandZ™ India Top 50, or US$ 31 billion. This concentration of value at the top of the ranking is similar to other BRIC markets. In contrast, the Top 5 brands in the Global Top 50 account for only about a quarter of the ranking’s total value. Financial services sector leads in brands represented Financial service brands – banks and insurance companies – represent almost a quarter of the brands ranked in the BrandZ™ India Top 50. That level of representation exceeds the proportion of financial services brands in the BrandZ™ Brazil and China rankings, and is equivalent to the Global Top 100. Financial service brands are typically well represented in BrandZ™ rankings because the sector is fundamental to economic health. Banks are the most prominent category Banks are the most prominent category in the BrandZ™ India Top 50, both in number of brands and total brand value. Ten banks account for 35.8 percent of the brand value of the Top 50. HDFC Bank ranked most valuable brand With a brand value of US$ 9.4 billion, HDFC Bank is India’s most valuable brand. When established in 1994, following India’s financial reform, HDFC Bank became one of India’s first private banks. Telecoms exhibit high brand value With only three brands in the BrandZ™ India Top 50, telecoms are number two in total brand value, making up 16.9 percent of the ranking’s total brand value. Airtel ranked second most valuable brand Ranked the second most valuable brand in the BrandZ™ India Top 50, with a brand value of US$ 8.2 billion, Airtel is part of Bharti Enterprises, an Indian family conglomerate, and operates in 20 countries. FMCG brands lead in brand contribution Nine of the Top 10 brands in brand contribution are from FMCG categories. A BrandZ™ metric, brand contribution measures the impact of brand alone on earnings. The result reflects that India has long been is a hospitable market for brands. Many FMCG brands started before India’s independence in 1947. They’ve flourished in a democratic and relatively open market economy. Food and dairy, and personal care brands are well represented Food and dairy, and personal care brands each comprise 14 percent of the brands in the BrandZ™ India Top 50. That’s a high level of representation relative to other BRICs. Personal care comprises only 2 percent of the brands ranked in the Brazil Top 50 and China Top 100. The contrast suggests strong Indian interest in personal care. The food and dairy representation in part indicates MNC (Multinational Corporation) success in introducing and developing FMCG brands. Most of the BrandZ™ India Top 50 brands are private Unlike China, where SOEs (State Owned Enterprises) dominate the BrandZ™ ranking of most valuable brands, private brands comprise 86 percent of the BrandZ™ India Top 50. Indian entrepreneurs and Indian family conglomerates together own over half of the private brands. Others are owned by MNCs. Both the conglomerates and the MNCs have effectively leveraged significant resources and world-class marketing expertise to build scale and develop meaningful brands. Master brands exert influence The Indian family conglomerates have developed powerful master brands that confer trust and authority across categories while simultaneously accruing economies. Unlike many conglomerates, they’ve built brand equity across disparate categories. And unlike many family businesses, they’ve established continuity of mission and competence in successive generations. Brand age tells a lot in India You can tell a lot about a brand by its age in India. The younger brands tend to be banks or telecoms that rapidly achieved scale since market liberalization in the 1990s. They enjoy high market value and salience but consumers are less likely to see them as meaningfully different. Older brands, formed before liberalization, and even before Indian independence, in 1947, often are well known and appreciated FMCG brands. Some started originally in India, while others were established elsewhere and introduced in India by MNCs. Top 50 brands seen as entrepreneurial In a BrandZ™ brand personality analysis, the characteristic “adventurous” distinguished the India Top 50 from the Brazil, China and Global Top 50, suggesting that leading Indian brands are viewed as more entrepreneurial. Part 1 // Introduction - Highlights Findings and analysis frame opportunities and challenges Highlights // Key Results 20 21 TOP 50 Most Valuable Indian Brands 2014
  10. 10. Part 1 // Introduction - Highlights Current forces can propel or disrupt brand growth Rural expectations are changing Brands are moving into rural and semirural areas of India. Banks are opening branches and establishing a presence. HDFC Bank opened mini-branches staffed by only a couple of people. Hindustan Lever is increasing small town penetration of its FMCG (Fast Moving Consumer Goods) products. The trend is similar to the brand expansion into China’s lower tier cites. The difference is that the Indian government has not, literally, paved the way. People are moving to cities People from India’s rural areas are moving to the country’s cities seeking opportunity. Growth of the urban migrant population is the same phenomenon as happened in China. And there’s another similarity. People from rural areas who become urban dwellers don’t abandon their roots. When they return to their small towns and villages they potentially become ambassadors for brands they experienced in the city. This possibility is important for brands because in rural areas the recommendations of local leaders can carry more weight than media messages. Value drives consumer spending Chastened by the global recession and the slowdown in the growth rate of India’s economy, Indian consumers are purchasing more thoughtfully. Similar to many of today’s Chinese consumers, Indians prefer to purchase value rather than status. For those who can afford a luxury car, the badge is still important, but not as important as the drive. Less well off Indians have traditionally sought value. That’s one reason for the abundance of regional brands that compete with national names, which usually are more expensive. Premium gains middle class attention Some consumers are willing to pay a premium for certain products, such as healthier foods and beverages. Consequently, companies like Hindustan Unilever, Procter & Gamble, ITC, and Cadbury are adding more premium offerings to their product portfolios. Two leading paint brands, Asian Paints and Berger Paints, introduced initiatives to inspire more elaborate and upscale home decoration. Banks are increasing their focus on wealth management. Even some commodities, like rice, are branding to suggest a qualitative difference that deserves a premium. Affordability reaches across the economy Members of India’s rising middle class, and those who aspire to move up into that group, share the Indian dream, to prosper individually and as a family. Across the economic spectrum people are eager to have that dream realized sooner rather than later. Brands are responding with schemes to make their products and services more accessible. Buying on installment is available both for inexpensive products and luxury cars. Consumers link brand with identity Indian consumers increasingly consider the brands they choose as expressions of who they are as individuals. The connection between brand and identity extends to experiences, as people consider holidays abroad to more aspirational destinations, like Europe. Young generation has different priorities The median age of India’s population is 27. In contrast, people of median age in the US and UK are almost 40. This generational difference is significant for brands. India’s young people were born in the 1990s, post liberalization in a free market period that drove economic growth. Unlike their parents, their priority is not saving for a rainy day. They want nice things. But they’re also struggling to balance their desire to advance with the tug of family and tradition. That’s part of what motivates young people to move to the city. It limits the tensions at home. Brands need to communicate in new ways to reach them. More opportunities open for women The presence of more women in the workplace influences brand products and services and communications. Motorcycle brands have introduced sub- brands aimed at women. Ads for Hindustan Unilever’s Fair & Lovely skin treatments emphasize themes of women’s empowerment, achievement, and transformation. 22 23 Highlights // Cross Category Trends
  11. 11. Part 1 // Introduction - Highlights Insights and actions for building valuable brands in today’s India Highlights // Take Aways Meet desire with affordability In India, if you can create a product or service, you can find a market for it. You need to create desire and deliver an affordable price. Don’t assume your market is limited to the wealthy. It’s not only the middle class in the cities who have aspirations. Less well off people in both the cities and rural areas are eager for the good life. Figure out a way for them to afford the piece of the good life that you’re selling. Hair coloring is a big business, and not just for the wealthy. Mobile phones, cars, innovative consumer products, and healthcare are just a few of the categories where marketers need to match product and service affordability with consumer desire. India may be one of the few markets where a consumer can purchase an iPhone with installment payments. Build scale and depth It’s not one or the other in India. With 1.25 billion inhabitants, India clearly offers scale. But to fully realize that opportunity, it’s also necessary to achieve depth, to connect emotionally. Indian service brands, like telecoms, are excellent at building scale. FMCG brands do a better job developing depth or emotional connection. To achieve meaningful differentiation, build both scale and depth. This dual focus is particularly relevant in India because of the diversity of the country. Building scale requires serving the particular interests and tastes of many different consumer segments. For international brands, it’s useful to think of India as Europe, a large geography with states that are both unified and distinctive. For Indian brands, achieving both scale and depth can help sharpen the competencies necessary for overseas expansion. Understand the special role of master brands In many of the world’s markets diversification hasn’t been the optimum path to brand success because too often it diffuses focus, producing more inefficiencies than synergies. That assumption doesn’t work the same way in India, where some of the most successful brand builders are the family owned Indian conglomerates. Their master brands, symbolizing efficacy and quality, enable these companies to expand across dissimilar categories, IT to FMCG, generating consumer trust and accruing economies of scale. These conglomerates have achieved these results over time and with the advantage of Indian heritage, so master brands are not a formula for instant success. However, major MNCs (Multinational Corporations) have demonstrated that master brands, when accompanied by deep market insight and patience, can create brands that Indian consumers view as Indian even if the actual provenance is not. Seek insight in contradictions Indians live surrounded by the artifacts and traditions of their ancient civilization. They also live in the same day-to-day reality as the rest of the developed world. Indians constantly mediate between these realities. The same person may wear contemporary clothing one day and traditional dress another. The balance between old and new depends on time and circumstances. It’s a factor in many purchasing decisions. This balance also means that Indians are receptive to accepting brands whether they are old (Bank of India , established in 1906) or new (Airtel, established in 1995). Set the clock on Indian time This duality of embracing the past while living in the present is one of the reasons, along with political differences, that the pace of change in India is relatively slower than in China, where until recently infrastructure construction took priority over preservation, and consumers faced the future with less equivocation. Brands need to set their expectations in India according to a clock that spans millennia. Paradoxically, progress that seems slower may be faster. When change happens deliberately and incrementally, society’s material, communal, and spiritual needs are more likely to remain aligned. The result can be long-term growth and stability at a deep level. Study the young; view the future India is a young country demographically. The median age is 27. In contrast, the median age in the US and the UK is more than 10 years older. Young people desire the newest and shiniest products. And they’re more likely to purchase them – even with lay away plans – than their parents. The older generations lived through difficult economic periods, without an elaborate social safety net, when the prevailing mentality was about saving for a rainy day. Young people are less risk averse. But there’s a caveat. Although young people are more likely than their parents to challenge tradition, young Indians share with their parents the need to balance the old and the new and don’t reject tradition totally. Question Basic Assumptions 1 2 3 4 5 6 24 25 TOP 50 Most Valuable Indian Brands 2014
  12. 12. Highlights // Take Aways “Indianize” Drive Brand Power “Indianize” Don’t expect to simply repackage a global product and sell the same formulation successfully to 1.25 billion Indians. That’s a thrilling idea. But it usually fails. The international brands that have experienced the greatest success in India – and there are many – took the time to understand Indian needs and tastes and adapt to them. When Nestlé introduced Maggi instant noodles, in 1982, it gave them a Masala taste, and today Indians generally think of Maggi as an Indian brand. Even the most iconic of global brands, McDonald’s, did not fully succeed in India until it introduced Indian flavors and vegetarian menu options that would seem out of character for the world’s largest hamburger chain. Along with adapting to the mass market, “Indianizing” can involve another step, understanding the myriad regional and cultural variations within the mass market. That knowledge unlocks possibilities for more focused offerings that, given the overall size of India, can still be produced at economic scale. Think and act regionally Managing India’s diversity remains a challenge for marketers. What sells in one part of the country might not sell well in some other part, so marketers have to constantly customize their offerings for regional needs, taste and sentiments. While people in the north tend to believe claims made by ads, in the south they look for reasons to believe. Even celebrities enjoy different levels of popularity and appeal in various parts of the country. Taste varies immensely from east to west and north to south – in food habits, media consumption or any other way of life. Marketers need to keep in mind these differences in their efforts to create successful national brands in India. The message may be national, but the communication needs to be local market specific. With possibly one exception. Conventional marketing wisdom holds that two things unite the billion-plus people of India – movies and cricket. Maintain focus on traditional retailing Marketers need to distribute in the modern retailing sector, which is expanding slowly as the Indian government incrementally relaxes market entry restrictions. But today, Indian retailing still is dominated by traditional retailing – the local kirana shops, the independently- owned neighborhood general stores, chemists, footwear shops, apparel shops, shops selling paan (betel leaf) and beedi (tobacco), the hand-cart hawkers and pavement vendor. While marketers must use the modern trade format for promoting their brands and gaining distribution efficiencies, they need to continue refining their distribution and promotion strategies through the traditional route – because the modern sector accounts for only about 7 percent of Indian retailing. Define and deliver good value Indian consumers are extremely value conscious. Well travelled and educated, they’re aware of what’s available in the West. They want the latest, most modern technology at a reasonable price. Marketers need to innovate and keep up with the consumers’ constantly changing interests and desires. Perceived good value is pivotal. But the consumer’s understanding of good value varies by category and brand. Marketers need to decode consumer behavior and define good value by category and brand – and deliver it. Help the consumer feel smart While the details of value differ by category and brand, this much is consistent: value no longer means cheap. Consumers are discerning. Especially in poorer rural areas, household budgets require purchasing products that work well the first time and for a long time. That’s why regional brands proliferate in many categories. They offer enough quality at a good price. Consumers feel they’re getting their money’s worth. They feel smart. Offering traditional price discounts and sale periods may help attract these value- driven consumers. But not as much as providing an honest product or service at the right price. Be Meaningful In today’s India, where consumers know what they want and are aware of the different brand offerings, being meaningful and relevant is imperative. As the preference for branded products increases, consumers seek more relevant and personally significant brands. Building affinity, an emotional connection with the consumer beyond the transactional relationship, is critical for marketing success. Some brands, like the bakery and dairy brand Britannia, have connected so strongly with consumers, that in the minds of many Indians the brands actually represent not just particular product ranges, but entire categories. Differentiate Indian consumers today have a strong sense of identity and they want to stand out in the crowd. A me-too brand is not acceptable anymore. A brand needs to have a meaningful USP that differentiates it from competition. Differentiation does not necessarily mean developing a new offering. Marketers can look at differentiating with service, brand experience, ambience or anything else that suits their brand. Build trust Trust and reliability are the most critical attributes for a brand to possess in India, relative to other country markets, research suggests. Closing any gap between the brand promise and the delivery of the promise builds trust. While legacy brands like Tata and State Bank of India have built trust over many years, global brands like McDonald’s and Nokia have also cultivated trust by, over time, finding the right localized approach. For heritage and global brands, the common factor is being true to the consumer and providing authentic products and services. 7 8 9 10 11 12 13 14 Part 1 // Introduction - Highlights 26 27 TOP 50 Most Valuable Indian Brands 2014
  13. 13. Market Creatively Crack the value code Consumers have many choices. Find something that makes your brand or service locally relevant, different, and necessary. Make something about your offering – the functionality, delivery, or emotional appeal – superior to the competition. Or make your offering more accessible. And execute effectively. Get social India is the world’s second largest market for social networking sites. Major social media brands, such as Facebook, Twitter and LinkedIn, operate relatively freely in India, in contrast to China. Facebook has approximately 100 million users in India. The country has the world’s third largest Internet base, with 210 million Internet users, according to the Internet and Mobile Association of India. Social networking in India helps improve brand engagement. Social media platforms, detailing the user’s demographics, preferences, social connections and behavior, provide an attractive proposition for advertisers. The high granularity of information allows advertisers to target consumers much more effectively. Get mobile India ranks third among countries for mobile device users. Around 84 million Indian Facebook users access the website using their mobile devices. Mobile marketing is the next big platform for brands in India. Especially in rural areas, where illiteracy and erratic electricity supply sometimes hamper traditional marketing platforms, marketers need to leverage mobile’s advantages. Missed-call ads – ringing and leaving a message to save the recipient the cost of the call – have proved successful for some leading brands in India. With the increasing number of utility transactions – like paying bills, banking, and booking tickets – being made on mobile phones, the medium has huge potential. Implement clever ecommerce strategies Increased trust, low price offers, and the ability to transact 24/7, drive ecommerce growth in India, where there are over 25 million online buyers and over 210 million Internet users. Marketers must explore the ecommerce route more aggressively and adapt it to the particularities of the Indian market. For example, because credit card ownership is limited and customers hesitate to pay for merchandise before receiving it, many ecommerce brands have successfully adopted a cash-on- deliver strategy. Optimize media spending The media industry has changed significantly, driven by the changes of 2001, when liberalized government regulations invited more competition in print, television, radio and eventually social media and out-of-home. Add in the numerous variables like geography, language, religion and socio- economic status, and the Indian media market becomes very complex and challenging for advertisers and media planners. Consumers don’t consume media one medium at a time anymore. They browse websites on mobile devices while watching TV, or notice an out-of-home ad while browsing through the pages of a magazine. Marketers need to optimize their media mix to get the highest ROI. Simplify the route to market Having an efficient route-to- market strategy helps consumer- facing businesses gain market share at an optimal cost. But the route that a product or service needs to travel before reaching its end user remains complex in India. Marketers need to develop more creative strategies to reach the consumer. Combining bricks and mortar retailing with ecommerce is probably the starkest example of this creative thinking. Other strategies include: using unconventional channels, like self- help groups in rural markets; using mobile technology to reach every consumer; and focusing more on modern trade, a less complex channel. 15 16 17 18 19 20 Highlights // Take Aways Part 1 // Introduction - Highlights 28 29 TOP 50 Most Valuable Indian Brands 2014
  14. 14. Part 1 // Introduction - Background Key Facts and Figures 30 31 Background // Economy and Demographics Bangalore Bhopal Mumbai Amritsar Hyderabad Nagpur New Delhi Agra Population Total population 1.25 billion Rural population as percent of total population 68% Population below the poverty line1 (2010 estimate) 29.8% Population by age1 Median Age 1 (2014 estimate) Figures from the World Bank and for 2013 unless otherwise noted 1 CIA World Fact Book 2014 estimate Figures from the World Bank and for 2013 unless otherwise noted 2 Internet and Mobile Association of India 65 years and over 55-64 years 25-54 years 15-24 years 0-14 years 5.7% 7% 40.6% 18.1% 28.5% 27yrs 30.7yrs 36.7yrs 37.6yrs 38.7yrs 40.4yrs Economy US$ 24 billion US$ 76.1 billion US$ 295.6 billion US$ 50.6 billion Foreign Direct Investment GDP Per Capita (around the same as Yemen) US$ 1,499 GDP Rate of Growth 5% 71% 89 135 153 Mobile Subscriptions per 100 people 46 213 million (141 urban/72 rural)2 Total Internet Users Internet Users per 100 people 15 6152 Geography 3.1 million sq.km./ 1.2 million sq.mi Land Area (world’s seventh largest nation, about one-third the size of the US) GDP (about equal to Canada) US$ 1.9 trillion Ease of Doing Business 134 (on a scale of 1 to 189, 1 being the most business friendly) TOP 50 Most Valuable Indian Brands 2014
  15. 15. 3332 Recent findings suggest that India is possibly the world’s oldest civilization. Compressing this extensive history into a brief timeline produces a limited and inexact glimpse into the formation of a nation. But the summary knowledge is a useful introduction for any brand trading, or contemplating trading, in India. Part 1 // Introduction - Background Ancient civilization absorbs diverse influences, inspires major religions Background // History Pre-History The Dravidians, a group of people who shared a common language, were among the earliest inhabitants of the territory of modern India, starting perhaps 4,000 years ago. But in 2002, scientists discovered an enormous city, dated to 7,500 BCE, 100 feet deep in the Gulf of Cambay, off of the India’s west coast, near Gujarat. The discovery suggests that civilization in India may have formed much earlier. The Beginning 4000 BCE Historians generally believe that the populations of India and much of the West are rooted in the same place, around the Black Sea, with the Indo-European people, who spoke similar languages and lived perhaps in the area of modern-day Turkey or Ukraine. Some of these people moved west into Europe and others migrated south through what is now Iran, arriving ultimately in India. The Indus Valley Civilization 2500 BCE to 1700 BCE In the migration south, the Indo-European language evolved into Indo-Iranian and then Indo-Aryan. Along the Indus River, in what is now Pakistan and northern India, the Indo-Aryans came in contact with what’s considered the largest civilization of the ancient world, with a population exceeding that of Egypt or neighboring Mesopotamia. These people introduced the Vedas, collections of devotions to various gods, written in Sanskrit. A collection of Vedas called the Upanishads influenced the development of Hinduism. The Dravidians may have populated the Indus Valley. The Axial Age 800 BCE to 200 BCE This period of history marks a radical transformation in human consciousness, with the emergence of a new sense of self that changes how people view morality, life, and death. In inventing the term Axial Age, German philosopher Karl Jaspers noted that this change happens almost simultaneously and independently in different parts of the world. In Iran, Zarathustra establishes Zoroastrianism. Hinduism evolves from the earlier Vedic texts. Jainism appears. The Buddha is born. Confucius is born in 551 and Laozi, the founder of Daoism, a few years later. The Hebrew Bible is redacted during the exile in Babylonia. In Greece, Socrates, Plato, Aristotle and others establish the foundation of western philosophy. Successive empires advance human knowledge Conquest and Unification 500 BCE to 185 BCE When the king of Macedonia, Alexander the Great, set out to conquer the known world, he followed roughly the same route as the Indo-European migration south. After conquering the Persians, who had extended their empire into the area that today is Pakistan and Afghanistan, he reached the Hydaspes River in Punjab. But after defeating the Indian armies led by King Porus, Alexander, his troops exhausted, ended his conquest of India. The Golden Age 320 BCE to 550 CE Subsequently, the Maurya Dynasty unified India under the rule of Ashoka the Great. Buddhism flourished during this period. And maritime trade with Rome began. For about three hundred years, much of India enjoyed peace and prosperity during the Gupta Empire. During this period, Hinduism became the major religion and Indians made major advances in science and mathematics, inventing the concept of zero and the decimal system. TOP 50 Most Valuable Indian Brands 2014
  16. 16. Part 1 // Introduction - Background Background // History Empires and Invasions 500 to 1500 With the end of the Gupta Empire, India fractured into several kingdoms. Arab Muslims conquered Persia and then the areas now Pakistan and Afghanistan, but Hindu rulers repelled advances further south. Later, Turkic and Afghan invaders established the Delhi Sultanate in northern India and exerted influence in other parts of the country, adding Islam to the mix of religions. Mughal Era 1500 to 1857 Mughal invaders defeated the Muslim rulers of northern India, adding more elements to the country’s cultural mix. Turkic-Mongols from central Asia, the Mughals traced their lineage to Genghis Khan. During the seventeenth and eighteenth centuries they controlled most of India. A Mughal emperor, Shah Jahan, built the Taj Mahal. In 1499, Portuguese explorer Vasco da Gama discovered a new sea route to India, around Africa’s Cape of Good Hope. The Dutch East India Company was established in 1602. Subsequently, the Danish, French, and Portuguese set up similar mercantile businesses. Britain established its East India Company in 1612. British Rule 1858 to 1947 With these developments, India became not only a trading partner for the Europeans, but also another theater of war. Following Britain’s victory in the Seven Year’s War, which broke out in 1756, its East India Company controlled most of India for about a century, until an Indian rebellion against the company in 1857. Then the British government asserted control. It installed modern governance institutions, helped build the economy, and encouraged an emerging middle class. At the same time, much of India remained impoverished. By the early 1920s, the Indian National Congress called for self-government. Relying on principles of non-violent protest, Mahatma Gandhi led a movement for independence. Independence 1947 to 1991 In the global geo-political reorganization following World War II, India achieved independence, on August 15, 1947, and Jawaharlal Nehru became the nation’s first prime minister. Britain partitioned the land into a Muslim state, Pakistan, and a predominately Hindu state, India. Massive migration and violence ensued. Tensions between India and Pakistan deteriorated to the point of war several times. Internal divisions resulted in the assassinations of two prime ministers, Indira Gandhi in 1984, and her son Rajiv Gandhi in 1991. India’s economy neared default in 1991. This trauma forced the government to advance more inclusive policies and loosen its central control of the economy. Rising India 1991 to Today Some sectors, such financial services and telecommunications, experienced reform, while other sectors lagged. Having nationalized banks in 1966, the Indian government allowed more private ownership, in 1996. Regulatory reform of insurance, in 2000, attracted foreign investment. For similar reasons, the telecom sector grew exponentially. In contrast, the retail sector remains highly protected and fragmented. Although GDP grew by over 10 percent in 2010, the economy slowed to half that rate in 2013. The overwhelming rejection of the long-time ruling party, and the vote in favor of Narendra Modi, in India’s national election, in May 2014, signaled impatience with the pace of reform and affirmed a desire for greater opportunity. 3534 Centuries of dynastic and colonial rule end with independence and democracy Modern India strives for inclusive opportunity TOP 50 Most Valuable Indian Brands 2014
  17. 17. Part 1 // Introduction - Background Background // Market Structure 3736 Indian family conglomerates own many valuable brands In a distinctly Indian phenomenon, family conglomerates own 26 percent of the BrandZ™ Top 50 Most Valuable Indian Brands, and a significant number of India’s other leading brands across most categories, from industrial products to FMCG. Most of the Indian conglomerates were formed over 65 years ago, before the establishment of India as an independent nation, during the period of British rule, at a time when India’s middle class first expanded and local entrepreneurs found ways to align with the government’s nation-building agenda. When conglomerates worldwide often failed to produce productive synergies among their many holdings, many Indian family conglomerates expanded their holdings and built master brands that confer authority across disparate categories while accruing economies of scale. They’ve also succeeded where many family businesses fail, transmitting a sense of mission and entrepreneurialism to successive generations. There are around 40 prominent Indian family conglomerates. The largest include: Adani Group, Aditya Birla Group, Bharti Enterprises, Essar Group, Godrej Industries, Mahindra Group, O.P. Jindal Group, Reliance-ADA Group, Reliance Industries, Sahara Group, and Tata Group. Indian family conglomerates overall score significantly higher than MNCs (Multinational Corporations) in brand power, the BrandZ™ measurement of brand equity and a brand’s ability to drive market share. Factors driving this result include: Dynasty Prior to British rule, India experienced centuries of dynastic leadership. These family conglomerates adapted India’s traditional governance structure and applied it to commerce. Over time, they leveraged their privilege, knowledge of the system, and access. Family Family is the primary social unit in India, perhaps more than in many other nations. Until recently, individual prerogatives were secondary to the needs of the family. The family dynasties match this cultural characteristic. Trust Trust plays and important role in Indian society. A family name on a product or service assures consumers with promises of quality and reliability even across unrelated categories. Mission The conglomerates are not building family wealth alone, although they’re often tremendously wealthy. They’re also building businesses to serve a nation. This mission provides guidance and continuity for successive generations. Local Roots Local knowledge and connections, important factors for success in any market, are especially critical in India because of complexity and diversity. Success requires getting the subtleties right. Professionalism In culture, Indian conglomerates respect tradition and family; in operations, they adopt the most up- to-date, global best practices. This duality is part of what makes them successful and particularly Indian. Prominent Indian Family Conglomerates Adani Group Established in 1988, the Adani Group focuses on developing infrastructure, logistics and energy to meet the needs of a more prosperous India. The company’s businesses include coal mining, development and operation of seaports and railways, and electric power generation and delivery. The Adani Foundation promotes inclusive growth by focusing on these areas of concern: education, community health, job development for people in need, and rural infrastructure. Aditya Birla Group Outside of India, Aditya Birla is best known for its industrial products, including copper, aluminum, cement, and fertilizer. Indians think of it for fashion, telecommunications, financial and retail. Its brands in India include Idea Cellular. The Aditya Birla Group was formed in 1857, in the village of Pilani in the Rajasthan desert, where Seth Shiv Narayan Birla started a cotton trading business. Today, the Group’s operations extend to 36 countries. Bharti Enterprises Bharti operates businesses in telecom, insurance, retail, digital TV and foods. The telecom business is present in 20 countries across Africa and Asia, and includes a joint venture with Japan’s Softbank. Bharti’s retail operation included a six-year joint venture with Walmart. Founded in 1976, by Sunil Bharti Mittal, the company developed first as a manufacturer of bicycle parts, and started in telecom services by launching a mobile services business in Delhi, in 1995. Essar Group Essar Group operates primarily in steel, energy, infrastructure, shipping, ports and logistics, and services, including tele- communications, in over 25 countries. The company was incorporated in June 1976. Godrej Industries Established in 1897 as a lock company by inventor Ardeshir Godrej, Godrej Industries today includes: real estate; FMCG, particularly home care and personal care products; chemicals; and agribusiness, with products such as animal feed and palm oil. As advocates for inclusive growth, Godrej operates its “Good & Green” program to help more low income people find productive employment and to make more affordable and environmentally responsible products available to them. Mahindra Group Mahindra has a presence in a wide range of industries, including: aerospace, agribusiness, automobiles, automobile aftermarket, construction equipment, defense, energy, farm equipment, finance and insurance, industrial equipment, IT, leisure and hospitality, logistics, real estate, and retail. Two brothers, J.C. Mahindra and K.C. Mahindra, and Malik Ghulam Mohammad, incorporated the original company, Mahindra & Mohammed, in 1945, in Punjab, to trade steel. The company entered automobile manufacturing in 1947. Today, the company is especially well known for its SUV brands and tractors. O.P. Jindal Group An industrial conglomerate, O.P. Jindal Group maintains interests in steel, cement, mining, and power. Founder O.P. Jindal opened the company’s first steel plant in Hisar, in northwestern India, in 1952. The company’s operations today span the globe. Reliance–ADA Group Reliance Anil Dhirubhai Ambani Group is present in many sectors including: communications, infrastructure, financial services, entertainment, power, healthcare, technology, cement, real estate, food, and logistics. The group formed in 2005, when the two brothers running Reliance Industries split that company into two entities. Reliance Industries The business interests of Reliance Industries include: retail, telecommunications, and petrochemical exploration, refining and production. The wide range of retail holdings includes Reliance hypermarkets, specialty stores in both food and non-food, and relationships with major international brands. Founder Dhirubhai Ambani incorporated Reliance Textiles Industries Private Limited in 1966. After an IPO (Initial Public Offering) in 1977, the company focused on vertical integration, connecting its textile business in polyester fibers to the petrochemical business. Sahara Group Sahara India Pariwar interests include: infrastructure and housing, sports, finance, retail, power, manufacturing, IT, media, entertainment, tourism, healthcare, dairy, hospitality, and power. The Group owns several sports teams and major interests in London’s Grosvenor House Hotel and New York’s Plaza Hotel. Tata Group The Tata Group operates over 100 companies, across the world, in seven business sectors: communications and IT, engineering, materials, services, energy, consumer products, and chemicals. Among the companies are: Tata Motors, with brands such as Jaguar Land Rover; and Tata Docomo, the telecom. Formed from a trading company that Jamsetiji Nusserwanji Tata established in Bombay, in 1868, the company entered its first major industrial business, in 1874, with the establishment of the Central India Spinning, Weaving and Manufacturing Company. Over time, the Group entered the airlines and automobile businesses. And it 1952, it created the first popular Indian cosmetic brand, Lakmé, now owned by Hindustan lever. TOP 50 Most Valuable Indian Brands 2014
  18. 18. Part 1 // Introduction - Background Background // Media Spending 3938 Digital gains growing share of an expanding media pie Digital advertising investment in India is predicted to grow 35 percent in 2014, following a 30 percent increase a year earlier. This growth would give digital just under 8 percent of total media spending. Digital already is the third largest media sector investment, less than TV and print but higher than out-of-home, radio, and cinema. As digital gains as a percentage of total spending, the share of some traditional media declines. Although print is expected to claim a strong 38 percent of total media spending in 2014, that’s down from 53 percent in 2005. In contrast, TV investment increased over the same period to 44 percent of total media spending from 37 percent. Driven by India’s economic expansion and the brand building requirements of a market economy, the total media pie expanded between 2005 and 2013, even as the slices changed in relative size. And in actual spending, investment in all media increased during this period, even for magazines, which are experiencing the greatest pressure. Total media spending is expected to reach 430.6 billion rupees (US$ 7.2 billion) in 2014, up from 386.0 billion rupees (US$ 6.4 billion) in 2013, and from only 156.3 billion rupees (US$ 3.6 billion) in 2005. FMCG leads media spending... Representing 29 percent of all media spending, FMCG led all sectors, with significant investment also in retail and auto. Media Spending by Sector Ad Spending by Media Source: GroupM and others ...With more spending going to digital Digital spending continued its steady growth, with print investment, especially magazines, predicted to again decline. Source: GroupM and others FMCG 29% Real Estate 4% Services 4% Consumer Durables 5% Financial Services 5% Telecoms 6% Others 22% Retail 12% Automobiles 8% Education 6% 2005 0% 20% 40% 60% 80% 100% 2007 2009 2011 20132006 2008 2010 2012 2014 Estimated TV Print Digital OoH Radio Cinema TOP 50 Most Valuable Indian Brands 2014
  19. 19. The value of the BrandZ™ Top 50 Most Valuable Indian Brands 2014 is concentrated at the top of the ranking, among a limited number of categories. Two categories – banks and telecoms – comprise more than half of the brand value of the India Top 50. Banks are the most represented category, with 10 brands. Only three telecom brands appear in the Top 50, but they’re highly valued and each ranks in the Top 10. The Top 5 brands alone – three banks, a telecom, and an automobile brand – produce 45 percent of the Top 50’s total value. The brands are HDFC Bank, State Bank of India, and ICICI Bank, along with Airtel and Bajaj Auto. In counterpoint to the concentration of value and the limited number of categories at the top of the Indian ranking, the rest of the Top 50 is more category diverse, with food and dairy, personal care, and home care also well represented. The value of bank, telecom, and automobile brands results from a couple of factors. Market liberalization, particularly changes enacted in 1991, encouraged more private ownership and resulted in new brands. Heritage and consumer appeal drove growth of existing brands. For example, Punjab National Bank opened in 1895. After several changes in ownership and brand name, the current State Bank of India was established in 1955. Bajaj Auto was formed in 1959. Tata Motors began in 1945. Part 1 // Introduction - BrandZ™ Analysis Value is concentrated at the top, similar to other BRIC markets BrandZ™ Analysis // Categories and Brands 40 41 Top 50 ranking by brand value Top 5 ranking by brand value Brand value is concentrated at the top of the India Top 50... The Top 5 brands account for 45 percent of the total value of the India BrandZ™ Top 50. Source: BrandZ™/ Millward Brown Source: BrandZ™/ Millward Brown Source: BrandZ™/ Millward Brown Top 5 Ranking 6-20 Rankings 21-50 Rankings HDFC Bank 30% Airtel 27% State Bank of India 22% ICICI Bank 11% Bajaj Auto 10% Top 50 by brand value Top 50 by number of brands ...Banks dominate in value, number of brands Banks are the most prominent category in the BrandZ™ India Top 50, both in brand value and number of brands. Banks - 35.8% Telecoms - 16.9% Automobiles - 12.2% Food and Dairy - 8.3% Personal Care - 5.3% Alcohol - 4.7% Paints - 4.7% Motor Fuels - 3.5% Home Care - 3.3% Lubricants - 1.8% Jewelry - 1.3% Soft Drinks - 1.2% Insurance - 1.1% Bank - 10 Brands Food and Dairy - 7 Brands Personal Care - 7 Brands Automobiles - 5 Brands Home Care - 4 Brands Telecoms - 3 Brands Motor Fuels - 3 Brands Alcohol - 3 Brands Paints - 2 Brands Soft Drinks - 2 Brands Insurance - 2 Brands Lubricants - 1 Brand Jewelry - 1 Brand Value concentration consistent with other BRICs The concentration of brand value at the top of the BrandZ™ India Top 50 is consistent with the results in other BRIC markets. In fact, the Indian market, with the Top 5 brands representing 45 percent of total Top 50 value, is somewhat less concentrated than Brazil (48 percent) and China (50 percent). In contrast, only 27 percent of total brand power is concentrated in the Top 5 brands in the BrandZ™ Global Top 50. The dominance of banks in the India Top 50 is also consistent with BrandZ™ rankings across other BRIC markets, where the number of financial services brands exceeds other categories. The Top 5 brands of the BrandZ™ Indian Top 50 account for 45 percent of total value, which makes brand power in India a bit less concentrated than in other BRICs. % Value - Brand value share of top 5 brands The concentration of brand power is consistent across the BRICs... TOP 50 Most Valuable Indian Brands 2014
  20. 20. Financial services brands comprise 24 percent of the brands ranked in the BrandZ™ Indian Top 50 compared with Latam (26 percent), and Brazil (12 percent) in other BrandZ™ Top 50 studies. Financial services brands comprise 15 percent of the China Top 100 and 23 percent of the Global Top 100. Similar to other BRIC markets, India also has a strong telecoms category. Unlike other BRIC markets, the Indian automobile category accounts for a significant portion of total brand value. And unlike China, the technology sector does not account for a high proportion of brand value in India. Several factors account for this technology finding, which seems counter intuitive given the large presence of Indian entrepreneurs active in technology worldwide. Most significant, the major global technology players like Google, Facebook, Twitter, and LinkedIn operate without restriction in India, so there is no gap in the market. Also, during difficult economic times Indian entrepreneurs fulfilled their ambitions outside of India. With economic improvement, Indians are finding greater opportunity at home. Consumer technology brands are rapidly developing, particularly in ecommerce. (These brands are not publicly traded and therefore do not meet the criteria for inclusion in the BrandZ™ India Top 50, although many have achieved high value.) Part 1 // Introduction - BrandZ™ Analysis BrandZ™ Analysis // Categories and Brands 42 43 Sector India Top 50 Brazil Top 50 China Top 100 Latam Top 50 Global Top 100 Automobiles 10% 0% 1% 0% 6% Alcohol & Soft Drinks 10% 8% 13% 18% 4% Food & Dairy 14% 8% 7% 6% 0% Financial Services 24% 12% 15% 26% 23% Oil & Gas 6% 2% 2% 8% 5% Personal Care 14% 2% 2% 2% 3% Retail 2% 20% 1% 26% 8% Technology 0% 2% 7% 0% 18% Telecoms 6% 8% 3% 8% 11% Others 14% 38% 49%* 6% 22% ...Financial services are pivotal in all economies... ...The value of automobile brands distinguishes India In the BrandZ™ Top 50 Most Valuable Indian Brands, as in other BrandZ™ BRIC rankings, the financial services category dominates in the number of brands represented. Food and dairy and personal care brands also are well represented in the Indian ranking. Unlike other BRIC markets, local automobile brands rank in the India Top 50. India has no technology brands in its Top 50 ranking, in contrast to China. Financial Services TelecomsTechnology Automobiles Category comparisons across country rankings Implications for brands The structure of the Indian market, with a few categories and brands dominating in brand power, is consistent with the situation in other BRIC markets. The concentration is partially category driven. The service brands, financial services and telecoms, which are fundamental to national infrastructure, drive scale, often with government support. The distinction in India is that the banks and telecoms are mostly privately owned. And FMCG brands generally are part of the brand portfolio of an MNC (Multinational Corporation) or an Indian family conglomerate. These well-funded organizations are capable of driving high brand value.Source: BrandZ™/ Millward Brown Source: BrandZ™/ Millward Brown Note: 49 percent Others in China mainly comprises real estate, apparel, and home appliances. Financial services dominates in number of brands ranked India China Global Brazil Latam 12.2% 36.8% 24% 14.7%38.4% 22.8% 12.6% 1.1% 28.9% 16.9% 4% 0.2% 11.9%19.5% 3.4% 15.8% TOP 50 Most Valuable Indian Brands 2014
  21. 21. Part 1 // Introduction - BrandZ™ Analysis Most Top 50 brands are private, although ownership type varies BrandZ™ Analysis // Brand Ownership 44 45 The BrandZ™ Top 50 Most Valuable Indian Brands are predominately private, reflecting a complicated and distinctively Indian brand ownership structure. In all BRICs, including India, high value brands are either SOEs (State Owned Enterprises) or they’re private. In India, however, private ownership includes at least two, and possibly three, variations. Independent entrepreneurial brands drive about half the value of Indian privately owned brands. Family conglomerates, an Indian phenomenon, drive the other half of the value of private brands. In addition, MNCs (Multinational Corporations), essentially private organizations, drive significant brand value. Although MNCs, by definition, are present worldwide, they have an unusual presence in India, where many of their brands are considered local. Private brands –entrepreneurs, Indian family conglomerates, and MNCs – comprise 84 percent of total brand value and 86 percent of the brands in the BrandZ™ India Top 50. SOEs make up 16 percent of the value and 14 percent of the brands. In contrast, ownership of the China Top 50 is 45 percent SOE and 55 percent private. Ownership in Brazil is overwhelmingly private (94 percent), but the Brazilian private sector is monolithic compared with India’s. Several differentiating factors drive India’s more complicated ownership structure: Democracy and free-market economy State ownership doesn’t fit India’s democratic ethos. In the early 1990s, India loosened its centrally controlled economy, enabling private brands to emerge, especially in banking and telecoms. Trading history European powers arrived during the Age of Exploration. MNCs came to India early with brands they deeply embedded in India as local brands. Nestlé set up a factory in 1912. Hindustan Unilever formed in 1933. Dynastic rule Prior to the period of British rule, a series of dynasties governed India. Many large Indian families adapted that model of governance for commerce, establishing family master brands that cross many categories. Implications for brands India is a competitive market. The high percentage of brands owned either by Indian family conglomerates or MNCs means that marketing sophistication is high. The success of both the Indian family conglomerates and the MNCs provide valuable lessons for achieving success in ways that defy usual assumptions. Although conglomerates too often don’t achieve expected efficiencies and synergies, the Indian family conglomerates created strong master brands that confer trust across categories while accruing marketing efficiencies. The MNCs successfully introduced existing brands, “Indianizing” them so that consumers presume that the brands originated in India. Nestlé established a new category in India when it introduced Maggi instant noodles, in 1982. Horlicks, a chocolate malt drink began in 1873, in Chicago, and became a household name in the UK before it’s Indian market entry, in 1930. Indian consumers consider both of these market-leading brands Indian. India is rich in private brands, particularly in FMCG categories, because both the Indian family conglomerates and the MNCs have scale across diverse businesses, reach deep into the Indian market, and implement effective brand- building strategies. Brand ownership is more complicated in India... Brand private ownership in India includes entrepreneurs, Indian family conglomerates, and MNCs (Multinational Corporations). $70bn 67% of Total Value 26 Brand in Top 50 16% 17% 7 17 US$ 23 bil. US$ 11 bil. Private Private with MNCs 84% of Total Value Private 52% US$ 12 bil. US$ 24 bil. Total Value of Total Value of Total Value Brands in Top 50 Brands in Top 50 Indian Conglomerates State Owned MNCs Independent brands Source: BrandZ™/ Millward Brown Source: BrandZ™/ Millward Brown India China Brazil ...SOEs play a larger role in China and private ownership dominates in Brazil... India’s complicated ownership structure distinguishes it from China and Brazil. Ownership structure - by number of brands SOEs 14% SOEs 6% Private 55% Private 94% Independent Brands 26% Indian Conglomerates 26% SOEs 45% MNCs 34% Ownership structure - by brand value Private with MNCs 86% of Total Number of Brands TOP 50 Most Valuable Indian Brands 2014
  22. 22. Part 1 // Introduction - BrandZ™ Analysis Age of an Indian brand indicates its challenges and opportunities BrandZ™ Analysis // Brand Age 46 47 The age of every Indian brand corresponds to a particular period in India’s political and economic development. These periods influenced the brands in their formative years and continue to shape them and define their potential challenges and opportunities. Brands under age 23 were established since 1991, after India’s economic liberalization. Brands age 23 to 67 emerged prior to liberalization. And brands older than age 67 came into being during the period before Indian statehood, in 1947. Of the Top 50 brands, 14 were formed after liberalization and 15 were formed before independence. Although roughly the same in number, the brands formed after liberalization account for 44 percent of total brand value, more than double the percentage value generated by the older brands. Twenty-one Indian brands, the greatest number, fall in the middle group, formed in the period after independence but before liberalization. In comparison with other BRICs, the greatest number of Brazil Top 50 brands were formed over 64 years ago, while around three-quarters of the Chinese Top 100 were created less than thirty-five years ago. Two reasons explain the relative youth of Chinese brands. First, the “Reform and Opening Up,” started in 1978, stimulated growth and brand development. Second, the BrandZ™ China analysis includes the Top 100 brands, and the brands ranked 51 to 100 are younger. Brands formed since liberalization total the greatest value... The 14 brands formed since liberalization generate 44 percent of the total value of the BrandZ™ India Top 50. $70bn 14 Brands in Top 50 21 Brands in Top 5015 Brands in Top 50 US$ 31 bil. US$ 26 bil.US$ 13 bil. Total Value Brands established after liberalization 1991 Less than 23 years old Brands established before liberalization 1991 23 - 67 years old Brands established before Independence 1947 Over 67 years old Source: BrandZ™/ Millward Brown Implications for brands The brands formed during this period entered competitive sectors relatively free of protective regulation. They have brand building experience. As more competition enters these sectors, and more sectors open to competition, the need for branding skills will increase. Market liberalization happened over time and today some categories, like telecoms, are more open than others, like retailing. If liberalization can be slow, it also seems inexorable, which means that opportunities await brands as more categories open. Two cataclysmic events shook India’s economy and politics in 1991. Until then, the Indian government had depended on centralized economic control to drive development and protect Indian businesses. The approach limited Foreign Direct Investment and growth. By 1991, India verged on default. The country also was in the midst of contentious elections that intensified ethnic and religious divisions. Assassins killed Prime Minister Rajiv Gandhi while he was campaigning. Emerging from this trauma, India began to implement reforms to encourage a market-driven economy and a more inclusive polity. Brands formed after 1991 developed in this robust outward-looking India working to find strength in its diversity. Economic change evolved slowly, however, with its effects felt unevenly across sectors. Brand examples Recognizing the importance of telecommunications to national development, the Indian government opened the sector to competition in 1994. Several brands formed soon after: Airtel (1995), Idea (2002), and Reliance Communications (2003). The insurance sector opened to international investment in 2000, enabling joint ventures that combined global best practice experience with local insight and access to rising middle class consumers. That same year, several UK and Indian financial services companies created HDFC Life and ICICI Prudential. After liberalization in 1991 - Under Age 23 37% 44% 19% TOP 50 Most Valuable Indian Brands 2014
  23. 23. Part 1 // Introduction - BrandZ™ Analysis BrandZ™ Analysis // Brand Age 48 49 Implications for brands Implications for brands Brands introduced during the last half of the past century often are well entrenched in the Indian market and experienced at promoting both the functional and emotional benefits of their products. Many of the brands rely on brand ambassadors, often leading Hindi and local language movie stars. They face the key challenge of success: complacency. Consumers are changing. More women are entering the workforce. Young consumers are challenging societal traditions. In a freer market with more competition, complacency can be fatal. Brands with this kind of heritage probably have more to teach than to learn. With that said, these brands market today much differently than they did when they were formed. That past adaptability is key to their future vitality. As this ancient civilization, with a recent colonial past, transformed into an independent state in 1947, India faced the enormous challenge of building a modern economy able to sustain its population and compete with other nations. Central control of the economy characterized the first 40 years, but government ownership didn’t reach the same level as in China. Other than the State Bank of India, which dates to a predecessor brand formed early in the nineteenth century, most financial institutions operated privately until 1969, 22 years after independence, when the government nationalized the largest commercial banks. In other sectors, many new brands emerged during this period, driven by consumer desire. These brands usually were not established by SOEs (State Owned Companies), in contrast to China. Instead, they typically were powered by the financial strength of large conglomerates, sometimes Indian, sometimes MNCs (Multinational Corporations). This activity created a richer brand landscape across many sectors, with some sectors open and others, such as insurance, banking, and energy, tightly controlled or regulated. Many local FMCG brands flourished. Because regulations prevented most international retailers from operating in India, local brands faced less pressure to cut margins or compete with retailer private labels. Brand examples Maruti Suzuki, an Indian-Japanese joint venture, changed the car market when it introduced the Maruti Suzuki 800, in 1982. United Breweries Group, an Indian conglomerate, founded in 1857, launched Kingfisher, its flagship beer brand, in 1978. The Indian FMCG conglomerate Hindustan Unilever, started in 1933, introduced Fair & Lovely, a leading skin lightening product, in 1975. The period before independence covers the years of British rule, from 1858 to 1947. Several bank brands were established. Less expected, perhaps, is the emergence of brands in FMCG and other categories that are not about establishing fundamental institutions but rather reflect the desires and tastes of ordinary consumers. One of the earliest brands, Punjab National Bank, was established in 1895. But Britannia, a maker of popular biscuits, cakes, and dairy products, started in 1892. It’s owned by Wadia Group, an Indian conglomerate formed around the time that the British East India Company arrived in India, in the eighteenth century. The longevity of the brands established prior to India’s independence suggests that if their survival was aided by government regulation or limited competition, it probably was not due to those factors alone but also the brands’ ability to build deep and enduring bonds with customers. Brand Examples Some brands arrived in India during this period, having been founded earlier in another part of the world. Established in the US, in 1873, Horlicks, a chocolate malt drink become popular in the UK and arrived in India in 1930. Lever Brothers launched Lux soap in 1899 and introduced it to India in 1905. Other brands began in India, such as Asian Paints, formed in 1942, and Tata Motors, which began in 1945. Before liberalization in 1991 - Ages 23 to 67 Before Independence in 1947 - Over age 67 Source: BrandZ™/ Millward Brown Based on the BrandZ™ China Top 100, Brazil Top 50, and India Top 50. ...The Brazil brands are older and the Chinese younger Comparing the BrandZ™ BRIC country rankings, China has more younger brands and Brazil more older brands, with India in the middle. Age of Brands - China vs Brazil Age of brand (% value share) - India 74% of brands 44% - 14 Brands 26% of brands 12% of brands 19% - 15 Brands 36% of brands 14% of brands 37% - 21 Brands 38% of brands Less than 35 years old 35 - 64 years old Over 64 years old Less than 23 years old 23 - 67 years old Over 67 years old China Brazil TOP 50 Most Valuable Indian Brands 2014
  24. 24. Part 1 // Introduction - BrandZ™ Analysis Consumer goods brands lead in brand contribution BrandZ™ Analysis // Brand Contribution 50 51 Brand contribution measures the impact of brand alone, without financials or other factors, in the mind of the consumer. A high brand contribution score – on a scale of one to five, five being the highest – suggests that a brand is resilient and likely to produce strong future earnings. India’s Top 10 brand contribution leaders are mostly in FMCG categories. FMCG brands operate in highly competitive, often fragmented sectors and generally lack the level of dominance that can approach the monopolistic levels of service brands. However, FMCG brands often enjoy high brand equity. And many FMCG brands have been present in India for at least 50 years, starting with brand contribution leader, Lakmé (personal care, 1952), and including, Lipton (beverages, 1898), Colgate (personal care, 1937), and Surf Excel (home care, 1959). In contrast, many Indian service brands formed relatively recently, after the economic liberalization in the 1990s. They have rapidly and effectively built scale but not the emotional connections to consumers that drive brand contribution. The BrandZ™ Top 50 Most Valuable Indian Brands 2014 scored an overall brand contribution average of 3.02, only a moderately strong result, in part because of the dominance of service brands that score lower in brand contribution, with financial results driving value. However, the brand contribution results of the service brands are nuanced, with the banks generally scoring higher than the telecoms. The Indian BrandZ™ Top 5 most valuable brands scored an average 3.6 in brand contribution because three banks outperformed category expectations. State Bank of India scored 5, and HDFC Bank and ICICI Bank each scored 4. Indian financial services brands as a group score higher in brand contribution than Brazilian or Chinese brands. Indian telecoms score lower. Implications for brands In strengthening brand contribution, the FMCG brands and the banks and telecoms face different sets of challenges. The service brands have outspent FMCG brands on brand building, in part because they’re newer to the Indian market and needed to build scale. The service brands introduced product innovations that have meaningfully changed the way Indians live their lives. However, consumers don’t see these brands as meaningful. The brands have not transitioned from product providers to trusted service partners. In contrast, FMCG brands, often long established in India, have cultivated emotional affinity with consumers and enjoy consumer trust. But many of these brands have not adequately leveraged those accomplishments for commercial advantage. In terms of the three BrandZ™ components of brand equity, service brands have built salience (top of mind awareness) but are less likely to be seen as meaningful (meeting functional and emotional needs) and different (distinguished and trendsetting). The FMCG brands are strong in the three brand equity components. They need to leverage their strong equity to pursue new business opportunities and to increase earnings. As FMCG brands continue to strengthen equity, they’re better able to build scale and salience without losing the meaningful difference that accrues from serving discrete market niches. Source: BrandZ™/ Millward Brown Source: BrandZ™ Brand Contribution measures the influence of brand alone on earnings, on a 1-to-5 scale, 5 highest FMCG brands lead brand contribution ranking... ...Indian financial service brands outscore Brazil, China ...The India Top 5 score well in brand contribution... The brand contribution leaders have long heritage in India. Indian financial services brands score higher in brand contribution than Chinese or Brazilian brands. The BrandZ™ Top 5 score better in brand contribution than the India Top 50 overall. Top 10 by Brand Contribution Rank Brand Brand Value (US$ Mil.) Brand Contribution 1 Lakmé 297 5 2 Lipton 208 5 3 State Bank of India 6,828 5 4 Berger 451 5 5 Surf Excel 778 5 6 Saffola 450 5 7 Castrol 1,264 5 8 Asian Paints 2,812 4 9 Horlicks 1,018 4 10 Rin 302 4 Top 50 Top 5 Ranking 6 - 20 Ranking 21 - 50 5 4 3 2 1 0 3.02 3.60 2.73 3.07 BrandContributionIndex Financial Services Telecoms Automobiles 2.8 1.3 2.0 India 1.9 3.3 China 1.0 2.6 1.0 Brazil 2.6 2.6 3.3 Global Brands TOP 50 Most Valuable Indian Brands 2014
  25. 25. 53 Part 1 // Introduction - BrandZ™ Analysis Brand India’s personality differs from other BRIC country brands BrandZ™ Analysis // Brand India 52 Brand India is similar to the national brand personality of two other BRIC countries, Brazil and China. It’s also different from both in significant ways. Understanding the differences is useful for brands competing in India and for Indian brands with overseas growth aspirations. BrandZ™ country personality profiles are compiled from the descriptions local consumers form of a country’s most valuable brands, using a vocabulary of 20 personality characteristics. Brand India, in other words, is the cumulative impression that consumers have of the country’s Top 50 most valuable brands. Because they’re based on the each country’s most valuable brands, these constructions of Brand India, Brand China, and Brand Brazil are especially relevant for competing in these country markets. A country brand personality helps brand owners understand how a particular brand fits into the consumers’ general view of brands across categories. For exporters, country brand comparisons identify the potential areas of advantage or disadvantage, where a country brand can help propel or slow international expansion. While India, Brazil, and China are remarkably congruent in brand personality characteristics, there are some tonal differences. India is more brave, adventurous and wise, for example. Adventurousness, in particular, points to a degree of entrepreneurialism. The character distinctions are consistent with brand ownership structures in the three country markets. The overwhelming majority of the most valuable Indian brands are privately owned. In contrast, 45 percent of the most valuable Chinese brands are SOEs (State Owned Enterprises), not known for being brave or adventurous. Although Brazil’s most valuable brands are usually privately owned, they’re relatively older. In addition, the private Indian brands are predominately owned by Indian family conglomerates or MNCs (Multinational Corporations). Both kinds of organizations have boldly built brands. The Indian family conglomerates have developed master brands that cross categories and in a way form the basis of Brand India. Rebelliousness is the one characteristic that’s relatively less evident in Brand India, not surprising in a country that values its cultural heritage, and where people constantly mediate between the tug of tradition and the demands of modernity. Source: BrandZ™/ Millward Brown Brand India differs from Brand Brazil and Brand China The three BRICs – Brazil, China, and India – are similar in brand personality, but Brand India differs in certain ways. Being seen as adventurous suggests a level of entrepreneurialism for Brand India. Caring Brave Fun AdventurousCreative KindDifferent WiseRebellious IdealisticIn Control InnocentAssertive FriendlyGenerous StraightforwardPlayful SexyTrustworthy Desirable India China Brazil TOP 50 Most Valuable Indian Brands 2014
  26. 26. Part 2 Thought Leadership

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