Brand valuations are upward bound through the stratosphere in the realm of dollar 150 billion, 200 billion, 350 billion. Assets that expensive need protection.
Currently, the most well protected human assets are Vladimir Putin, and MBS. Donald Trump has just been added to the list. Not because he’s the President- elect. His recent comments about dismantling the ‘deep’ state must have annoyed the ‘deep’ state. JFK was taken out for expressing such thoughts.
But brands are something else; some brands are more valuable than the hard assets of the corporation (factories, real estate, vehicles, investments, etc.).
Here is the value in US dollars of the 10 top brands as at 1600 hours, 21-11-24. Apple Inc.: 516.6 billion, Microsoft: 340.4 billion, Google: 334.4 billion, Amazon: 308.9 billion, Samsung: 99.4 billion, Walmart: 99.4 billion, TikTok: 4.2 billion, Facebook: 75.7 billion, Deutsche Telecom: 73.3 billion, ICBC: 71.8 billion. These values are estimates based on various methods. Different sources may have slightly different rankings and values. Kantar Group, Interbrand, Brand Finance and Forbes, for example, use subjective analyses. No single metric exists.
With the ownership of such expensive assets, corporates are increasingly concerned about protecting their brands. The ‘Lux’ brands do not enter any market that is not ‘primed and ready’.
In Gujranwala, one can see multiple advertisements for Coke, Pepsi, Bata, but none for Jaguar or Rolls Royce. This city is great for advertising “Murgh Chollay”, but not for high end products. If a Pak-origin customer walks into a Bentley car showroom in Dubai, they (the showroom) will not sell the car for the simple reason that the Pakistani market is not ready for service and provision of spares.
Brand owners are always watching the markets. They have extensive reach – internal and external. If a similar brand enters a new market they (brand owners) are collecting evidence and data.
Once I flew to Singapore in 2007 to negotiate with ‘Burger King’ (B.K.) about a franchise for a famous hotelier of Pakistan. At that time B.K. was owned by a private equity group that I know well. The request was declined. Their regional office in Singapore had enough data on a similar fast food operator in Pakistan. Much later, B.K., under new ownership, entered Pakistan.
Crash & Burn: My daughter lives in Vietnam for last 14 years. I have been watching the ‘brand’ growth. The market progressed from low-end brands to mid-tier ones. Now many ‘Lux’ brands are present. The shopping malls are ‘glitzy’, an appropriate setting for high-end brands.
The buyers in the malls and shops look affluent and, above all, extremely disciplined and well-mannered. Nigeria, conversely, is swimming in petro dollars. But big brands are averse to making a big display.
The Nigerian aristocracy prefers to fly abroad for big purchases. Out one of my visits to London, Harrods was closed for one day. A Nigerian delegation was shopping.
Brand management, including protection, is a big management issue. When the Saudi royals were incarcerated in the Four Seasons hotel in Riyadh, the brand owners must have wanted to immediately disconnect their brand from what was happening. In the present age of social media Tictokers, almost everybody is an influencer or would be a brand ambassador. This is a dangerous development for brand managers of the big brands because choosing brand ambassadors (BAs) is a serious business.
Before being chosen as BA, a serious review of analysis is undertaken. Once the candidate has ticked all the boxes, only then can negotiations proceed.
The ultimate BA – of recent times has been Roger Federer. A great tennis player, family man, body honed to perfection, nattily dressed, no embarrassing episodes. No wonder, brands signed him up. Federer’s sponsorship deal with a Japanese clothes retailer for a reported US dollar 100 million for 10 years is worth it.
Federer’s farewell at Wimbledon this year was an amazing brand fest – suit, tie, shirt, watch, shoes, etc., etc. All being promoted by a sporting icon. This week another sporting icon and brand ambassador, Rafael Nadal, has signed off. Rafael, may your sponsorship deals carry on and on.
Copyright Business Recorder, 2024