Meaningful brands for a sustainable future: A new approach to measuring brand value
This article, provided for The Drum by marketing intelligence service Warc and written by Kate Cox, director of strategy at MPG Media Contacts London, highlights the results of research into meaningful brands.Both the OECD and the UK Government have recently published measures of the well-being of populations in an attempt to provide a truer account of people's state than using such blunt factors as Gross Domestic Product (GDP).In its new analysis, Meaningful Brands for a Sustainable Future, Havas Media has re-framed this debate within the context of branding and marketing. The report investigates well-being not in terms of governments and public policy, but in relation to businesses and brands. It applies the theory of well-being, at a personal and collective level, to brand attachment and equity, arguing that more meaningful brands drive business success in the short and long-term.This research demonstrates that businesses that can successfully connect quality products and services to personal well-being have developed better business practices to make them more responsible partners in society, and are able to derive incrementally higher business success as a result.Meaningful Brands for a Sustainable FutureOur analysis is based on research into 50,000 people's views on life, and on 300 brands in 14 countries. We discovered that most people would not care if 70% of brands ceased to exist. What's more, people across the world think that 80% of today's brands are not making a significant contribution to their quality of life and their sense of well-being. While this is a worrying notion, it does mean that 20% of brands make a positive contribution to people's lives. These 'meaningful brands' contribute to the well-being of people and communities, making the whole economic and social system flourish. They redefine their relationships with consumers and forge new pathways for future success.
- Would you care if this brand disappeared?
- To what extent does this brand contribute to improve your overall quality of life?
- Personal Well-beingThis measures the quality of personal outcomes the brand is providing for people.This is built around the seven core elements that contribute most to human well-being as derived by well-being research, positive psychology experts and extensive pre-testing and pilot studies. These factors include are emotional well-being (e.g. Does it make us feel happier?), our physical well-being (e.g. Does the brand help us become healthier, fitter, or better-looking?) and our social well-being (e.g. Does it help us feel part of our community?) as well as financial, organisational (making our lives easier) and intellectual, social and natural (do they help me live responsibly?)These dimensions are the areas that are important in life to most people across markets and the areas that most brands and companies can influence.
- Collective Well-beingThese factors measure the brand's contribution to community, society and the environment. It breaks down, and then integrates, the core elements that make up corporate social responsibility practices such as environmental and community policies, workplace and employee practices, influence on the wider economy, a company's governance culture and its overall ethics. It integrates this with product and marketplace factors, such as 'provides society with useful products and services' and 'represents fair pricing'. Communications then has a role to play in shaping people's perceptions of these two scores in relation to individual brands.
- By Sector: There are certain sectors that are inherently more meaningful to people. These tend to be the industries with an easily understood and tangible product or service, such as FMCG and retail. Sectors with an intangible product such as energy, oil, financial and telecommunication services are more prone to under achieve when it comes to perceptions of well-being improvements.
- By brand: Despite these trends, the analysis shows that some brands have been able to break free from their industry limitations. There are brands with exceptionally high MBi scores in low scoring industries that are learning to reconnect with consumers. For example, this is the case for Fidelity Investments in the USA, the energy brand Petrobras in Brazil, EDF in France and the telco brand, O2 in the UK. All of these register significantly higher than average MBi scores for both their sectors and countries.Focusing on O2, we can see that consumers feel that it manages to provide both great products and services and to communicate its commitment to better business practices. It was the only telecoms company in the UK to improve its annual score on collective well-being. The company cites a number of sustained initiatives in this area that it feels help it pull ahead of the competition. Bill Eyres, head of sustainability at O2 UK & Telefónica Europe, said: "This demonstrates that brands that make a real difference to customers and their communities will be rewarded with stronger brand loyalty. O2 has focused on engaging consumers in sustainability through our 'Think Big for People and Planet' programme… providing customers with simple ways to make a big difference, such as eco-ratings which enable customers to see the sustainability rating for a new phone'
- By country: The analysis showed that people living in fast-growing economic regions – like Asia and Latin America – have a healthier relationship with brands. 53% of people in LatAm care if a particular brand would disappear and 70% say that brands contribute to their overall quality of life. This compares to the US were these figures are 18% and 5%. Brands are a powerful symbol of product or service quality. Paradoxically, as quality standards have risen in the developed markets, alongside a plethora of substitute products and services, people are becoming less and less tolerant of any shortfalls. People in developed markets are now expecting more from businesses and brands. This shift of power towards citizens, and the ability of digital media to transmit dissatisfaction far and wide, have directly led to an increasing lack of trust in business. In developed markets, the era of people seeing businesses as looking beyond short term profits and positively contributing to society has largely gone. This is harming business in the short and long term because without trust, businesses have to spend more to convince new customers and retain existing ones. There is a huge opportunity for businesses and brands to reconnect with people by adopting what Havas Media defines as “Meaningful Communications”. Brands can build trust by understanding exactly how to communicate effectively their positive social impact alongside the production of high quality products and services. The next generation of brands may well come from emerging economies, especially from brands that are nurturing a different type of relationship with people and communities. The progress of these economies and societies and the companies therein relies on the progress of the people. Addressing big social challenges – such as poorer people's access to affordable products and services – means exploring the basic needs of the communities in these markets. It is noteworthy, for instance, that half of the top 50 brands with higher MBi scores in our report come from emerging regions. They include Tetra Pak and Bimbo in Mexico, the food brands Colún in Chile and Nacional de Chocolates in Colombia, La Serenisima and Sancor in Argentina, Unilever in India, and Ikea in China.Branding and communications strategies must be adapted and customised to suit such geographical or market clusters. Companies must address which specific outcomes are more meaningful to people in each market. And for global companies with multiple brands, different but consistent approaches are needed across brand and market clusters.
- Comparison to other brand equity KPIs: Looking at a brand's meaningfulness score and its correlation with other measures of brand equity can yield interesting insights and direction for branding and marketing plans. For example, within the finance sector in the UK, two brands with exactly the same familiarity score are the highest and lowest ranked brands on meaningfulness. Whilst the lower ranked brand performs worse on 'purchase intent' for new customers it is only a marginally worse performance. However, on repurchase intent and brand advocacy the more meaningful brand outperforms its competitor by 26% and 50% respectively.
- Many businesses have a 'meaningful' purpose at their core that just isn't being communicated to people in the right way to drive increased brand equity. This approach helps uncover any gaps between business practices and people's perceptions of your brand.
- Benchmarking your performance against other brands in your sector and market could uncover some key areas of future focus that could help your brand drive incrementally large effects on perception and therefore brand equity.
- This approach helps brands discover and prioritize new brand territories to make a positive and lasting difference. Companies that effectively convert these insights and opportunities into meaningful ideas and bring them alive through engaging initiatives will develop stronger brands.
- Global brands need to be mindful of the different routes to meaningfulness in each market and adapt a flexible approach to try to capitalise on brand consistency without destroying meaningfulness.
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