N VALUE IN BRANDS Now in its 14 th year, the most valuable brand rankings reveal some significant shifts. One such shift is the rise of Dialog to the number two position on this table, displacing several bank brands that were ahead of it. Dialog, which has been in business for less than 25 years, is setting the trend that we have seen occur throughout the world in our global brand rankings. This is where new technology brands are rapidly overtaking the legacy brands to change the business and brand landscape. This has long been a possibility as Dialog has consistently had a ‘AAA’ rating on our Brand Strength Index (BSI). This rating has conferred it to be the strongest or most powerful brand on our table for several years. Brand power – denoted by the rating, with ‘AAA’ being the highest – is an indicator that it has the potential to create value in the long term, which is exactly what we are witnessing. Its strong brand has resulted in the continuous increase in brand value, catapulting it to take the second slot with the top spot not being too far out of reach. It is not only the rankings that are important as all banks should beware of Dialog. It has a much broader agenda, reaching beyond its core telecommunications industry as it moves more aggressively into the financial services industry in the future. In fact, Dialog is already deeply entrenched in payment services with eZ cash, which has emerged as the strongest brand in our new e-commerce table. The other significant change in our table is reflected in the bifurcation of the insurance sector into general and life insurance businesses, which was a regulatory directive. So the two segments will be managed and run as two separate businesses henceforth. Several brands have already shed the general insurance business arm while retaining the more profitable life business as seen by Union Assurance (life business), AIA Insurance and Asian Alliance (now Softlogic Life). Others – such as Sri Lanka Insurance, Ceylinco, Janashakthi, HNB Assurance and Amana Takaful – continue to run both their life and general businesses under a single brand. These businesses will need to make a critical decision on their future branding strategies and how they intend to approach these two very different markets. As this is the first year in which we are tabulating the separate insurance entities, it is too early to clearly predict how they will perform. There is very little separation in a majority of the brands at this early stage. It will be interesting to see how these brands pan out in the future. The main use of our brand value table is to ascertain the performance of a brand over time and its future potential to create value. The challenge for those in the leading 50 is to ensure that they maintain that single-minded focus on growth by strengthening the brand. This needs to take place through defining or redefining the brand where relevant, as well as by constantly differentiating through innovation. On the other hand, the bottom 50 brands have much work to do to establish themselves in their respective markets and work towards a strategic approach to long-term brand-building. The process of identifying Sri Lanka’s most valuable brands begins by reviewing the consumer-facing companies that are listed on the Colombo Stock Exchange (CSE). By analysing both the financial and marketing performance of these listed brands, we are able to determine which of them are generating the highest brand value. Over the years, many companies have begun to report on our brand value in their annual reports while some are Sri Lanka ’s most valuable brands 14 I BRANDS ANNUAL I 2017
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Sri Lanka s mostvaluablebrands - STING Consultants · 13 14 DCSL Distilleries Company of Sri Lanka Beverages 10,216 A 83,304 12% 14 13 SLT Sri Lanka Telecom Telecommunications 9,350
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N
VALUE IN BRANDS
Now in its 14th year, the most valuablebrand rankings reveal some significantshifts. One such shift is the rise ofDialog to the number two position on this table, displacing several bank brands that were ahead of it.
Dialog, which has been in businessfor less than 25 years, is setting the trend that we have seen occurthroughout the world in our globalbrand rankings. This is where newtechnology brands are rapidlyovertaking the legacy brands to change the business and brandlandscape.
This has long been a possibility asDialog has consistently had a ‘AAA’rating on our Brand Strength Index(BSI). This rating has conferred it to be the strongest or most powerfulbrand on our table for several years.
Brand power – denoted by the rating,with ‘AAA’ being the highest – is anindicator that it has the potential tocreate value in the long term, which is exactly what we are witnessing. Its strong brand has resulted in thecontinuous increase in brand value,catapulting it to take the second slotwith the top spot not being too far out of reach.
It is not only the rankings that areimportant as all banks should bewareof Dialog. It has a much broader
agenda, reaching beyond its coretelecommunications industry as itmoves more aggressively into thefinancial services industry in the future. In fact, Dialog is already deeply entrenched in payment services with eZ cash, which hasemerged as the strongest brand in our new e-commerce table.
The other significant change in ourtable is reflected in the bifurcation ofthe insurance sector into general and life insurance businesses, whichwas a regulatory directive. So the twosegments will be managed and run astwo separate businesses henceforth.
Several brands have already shed thegeneral insurance business arm whileretaining the more profitable lifebusiness as seen by Union Assurance(life business), AIA Insurance andAsian Alliance (now Softlogic Life).Others – such as Sri Lanka Insurance,Ceylinco, Janashakthi, HNB Assuranceand Amana Takaful – continue to runboth their life and general businessesunder a single brand. These businesseswill need to make a critical decision on their future branding strategies andhow they intend to approach these two very different markets.
As this is the first year in which weare tabulating the separate insuranceentities, it is too early to clearly predict
how they will perform. There is very little separation in a majority of the brands at this early stage. It willbe interesting to see how these brandspan out in the future.
The main use of our brand value tableis to ascertain the performance of abrand over time and its future potentialto create value. The challenge for thosein the leading 50 is to ensure that theymaintain that single-minded focus ongrowth by strengthening the brand.This needs to take place throughdefining or redefining the brand where relevant, as well as by constantlydifferentiating through innovation.
On the other hand, the bottom 50brands have much work to do toestablish themselves in their respectivemarkets and work towards a strategicapproach to long-term brand-building.
The process of identifying SriLanka’s most valuable brands beginsby reviewing the consumer-facingcompanies that are listed on theColombo Stock Exchange (CSE). By analysing both the financial andmarketing performance of these listed brands, we are able to determine which of them aregenerating the highest brand value.
Over the years, many companies havebegun to report on our brand value intheir annual reports while some are
Sr i Lanka’s most valuable brands
14 I BRANDS ANNUAL I 2017
even using it as a measure for internalmanagement purposes. Due to thehistorical data that we collate, brand-value performance can be tracked overtime. In addition to the rate of increasein value, the brand performance ofcompetitors can also be tracked(providing they are listed companies)to benchmark high-value performersover the stragglers.
The importance of tracking brandvalue is that it enables businesses tomeasure its ability to create overallbusiness value in the future.
So how does it work?Business value is created by
stakeholder behaviour towards the brand. This is demonstrated through aspects such as a customer’swillingness to pay a higher price (morerevenue), suppliers’ willingness topartner by providing better commercialterms resulting in reduced costs, bankslending at lower rates (lowerfinance costs), moreloyal and smarteremployeesworking forless, whichwouldreduce costs and so on,which are allinfluenced bytheir individualperceptions.
By understanding whatdrives these perceptions, wegain insight into how positivebehaviour towards the brand could beinfluenced. Therefore, if we understandthese drivers of value, we can factorthat into how the brand is perceived,which will result in greater valuecreation.
The pivotal point of the valuecreation process is building thebrand in a manner that willpositively engage with thesestakeholders. If we know what those considerations are, we can help nurture and cement therelationship through a commonplatform that is relevant to them.
This requires brand management totease out and identify the key valuedrivers around which the businessshould be aligned that includes featuressuch as pricing, availability andproduct design. It is here thatquantitative and qualitative researchshould be deployed to understand these drivers of value, which can then be integrated into the brand. IN
FOOTNOTES Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions in this study are based only on publicly available information. No independent verification or audit of such materials was undertaken. Brand Finance accepts noresponsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The brandvaluations for Sri Lanka’s Top 100 brands follow IVSC guidance but will only comply with ISO 10668 Monetary Brand Valuation Standard whenaccompanied by detailed legal and behavioural analysis. The conclusions expressed herein are the opinions of Brand Finance. They are not intended
MOST VALUABLE BRANDS
16 I BRANDS ANNUAL I 2017
2017 RANKINGS
to be warranties or guarantees that a particular value or projection can be achieved in any transaction. The opinions expressed here are not to be construed as providing investment advice. Brand Finance does not intend this to be relied upon for technical reasons and excludes all liability to any organisation. Enterprise value is calculated for all brands except in the case of the financial services industry – viz. banks, leasing, insurance and financial services – where market capitalisation is used. Market capitalisation is used for these sectors as they have considerable debt and sohaving an enterprise value does not represent market value.