What Boosted The Value Of Chinese Brands?

Interbrand has just released the list of China's best brands in 2011. We can see that Chinese brands are growing at an average of 20% of two figures as usual.

Have we pondered whether such a growth rate is healthy and at what price is this growth? What is the real driving force behind growth?

Measuring brand financial value

Interbrand has accumulated more than 25 years' experience in global brand value assessment and nearly 40 years of global brand consulting service experience worldwide.

The value assessment of Interbrand is to regard the brand as a part of its business assets and to carry out continuous investment and management.

Interbrand's brand value management has passed the ISO standard certification.

In the process of evaluating brand value, there are three key steps: the financial performance of branded products or services, the brand force and brand strength in the process of purchasing decisions.

Financial performance measures the original financial gain of an organization for its investors.

Therefore, we use the concept of Economic Value Added (EVA) to analyze economic benefits.

On the basis of net operating profit, we deduct the tax portion and get the net profit after tax (NOPAT). At the same time, we use the weighted average cost of capital (WACC) to measure the cost of capital.

All financial analysis is based on publicly disclosed financial information of listed companies.

The future forecast data are based on extensive financial analysis reports.

Brand force is a measure of how brands affect consumers' purchases.

Brand strength helps us measure the long-term profitability of brands for their owners.

Our method is based on a brand's ability to ensure the enduring customer demand capability, and generates a discount factor to predict the level of earnings that the brand can obtain under future risk conditions.

We measure brand power through 10 key indicators, namely commitment, protection, clarity, initiative, source, relevance, understanding, consistency, visibility and diversity.

Through this analysis, we can also gain insight into how brands create value and how to increase brand value.

Impact of growth expectations fall

From the inflationary pressure of domestic economy to the storm brought by the US Treasury rating to the world, this kind of

In 2011, the growth rate of the top ten brands of the top 50 brands of China was lower than that of last year, with an overall growth of 10%, which is roughly the same as that of China's GDP growth.

The growth of brand value has exceeded economic growth in the past few years. What is the problem? What is the problem of the leader brand, or is the brand value too sensitive to the economic impact?

In the Interbrand brand value assessment model, there is a very important parameter in the analysis of financial indicators, which is the expectation of future growth. This value g sets a hypothetical value for the long-term development of the brand.

Therefore, when the financial market (investment bank, analysts) is not optimistic about the future development of the brand, and when the growth rate is downregulated,

The growth rate is a sensitive index, and the impact of brand value on brand value is certain when the brand profit is declining in the future.

This fundamentally exposes the high growth expectations of Chinese brand development in the past, which is inseparable from the macroeconomic optimism and the huge opportunities in the domestic market.

In 2010, the theme of Chinese brand value "riding the wind to the sky" indicates that China's brand growth has added too many macro market expectations factors, and when the big economic environment begins to turn, value begins to return to its original source.

The list is still eye-catching brand, Tencent, China Merchants Bank and Pacific Insurance are still strong growth momentum, in the same market expectations, these brands reflect the brand growth quality can withstand the test.

In the 2010 earnings report, these brands have gained a higher value-added EVA, and their performance in brand strength has also increased to varying degrees.

Differentiation of value growth caused by different management strategies

Industry growth figures show that the IT service industry and the education industry have shown very high growth rates (all over 60% over 2010), while the brands of automobile, securities and sports apparel are closely followed.

These industry brands still have better financial performance and high expectations for the long term development of the capital market, such as Tencent, Baidu, Alibaba and Ctrip of IT service industry. They represent the brand of China's IT service industry, and in 2010, they have achieved outstanding results in their distinctive fields.

For example, Tencent opened its code to make itself an all round internet service platform. Baidu quickly filled its market vacancies when Google withdrew from the mainland of China, while Alibaba and Ctrip continued to deepen its e-commerce business mode and service innovation, all of which are very representative and show strong brand vitality and lasting development momentum.

As the only brand of education in China's brand list, the New Oriental is thriving.

In China's huge educational market, New Oriental has become the vane of Chinese education in the era of branding.

China's education out of the constraints of the system and the plight of various institutions, the establishment of brands and the real commitment to target groups are the inevitable choice for the development of the industry as a whole, and New Oriental has set an example for every participant in the education industry.

Food, beverage, clothing and retail brands were all hit in 2010, and the brand of garment industry has changed greatly.

Despite the first list of BELLE brands, last year's top brand Metersbonwe dropped 50, while Posen's attempt to enter the field of fashion apparel from down jacket has been a success and has become the winner of this year's clothing sector.

From the top to bottom of the clothing brand, we can feel the fierce competition in the industry brand and the difficulties in running the fashion brand.

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Food and beverages are the most regrettable of the list. Chinese food and beverage brands are being tested by various quality crisis, and 2010 is a year of continuous problems.

The brand of dairy and meat industry is full of problems, which can explain the backwardness and instability of its management foundation, and the brand value has become the roller coaster of the up and down.

The impact of brand development quality improvement

The ten index of Interbrand brand strength is the quantitative content of brand building level for brand.

The score from internal and external indicators can reflect the quality and breadth and depth of brand macro and micro construction, and visually show the brand's ability to ensure future business revenue.

Through the survey and expert score, we score and compare the brand strength of each listed company. Through analysis, we find that the average number of brand strength of the 50 brands on the list in 2011 has not changed basically, but the overall score of the food industry, the automobile industry and the garment industry has fallen by 5 to 7 points, which shows that the safety problems of the industry have made various problems in the brand building activities last year. For example, the safety problems of the food industry exposed the weakness of the enterprise internal brand management commitment, the weakening of the brand difference in the automobile industry, and the blurred brand spirit and positioning of the clothing industry in the brand origin.

In addition, we can see that the variance of brand strength scores shows that the level of brand strength of consumer electronics products, IT and Internet services, pharmaceutical industry is larger than the overall evaluation value, indicating that the brand building ability of these industries is still very unstable, and the competition is more intense, and the advantages of brand to business have not yet been fully realized.

Under such circumstances, the top brands of these industries must not be complacent, but must recognize the long-term nature of brand building and insist on laying a solid foundation in the basic brand work.

The overall brand strength of Chinese brands is relatively low, with an average of 48 points (total score of 100 points), compared with international brands on the list of the best brands in the world, the gap is huge.

If the BSS of China's brand is raised by 10 points, the value of Chinese brand will increase by 44%. The quality of brand building and development of Chinese enterprises will jump to a new level.

Chinese brands in the past can perform miraculously, based on high growth and high expectations of macro environment, while the deep quality of brand building is not very important. In recent two years, although the advertising expenses of enterprises are still growing rapidly, the investment in brand building has no tolerance and necessary modesty.

If every brand can improve the quality of brand building in a timely manner, the overall improvement of 44% will help Chinese brands achieve new wonders.

From quantity to quality

The theme of this year's "best Chinese brand" is "the upgrading of Chinese brands from quantity to quality", and our research has also made some new discoveries.

The threshold of brand value entering the list is 19% higher than that of last year, which is RMB 1 billion 300 million yuan.

The gap between the first place and the fiftieth place in the list is narrowing, from 176 to 1 to 153 to 1, which reflects from one aspect that a competitive local market is gradually getting rid of the domination of a few state-owned protection industries.

The financial services and telecom brands still occupy the top of the list, while the growth of medium scale brand value is the most rapid.

Internet brands are being rewarded for their market flexibility and local creativity.

Clothing and electronic brands have rebounded due to the extension of related fields.

These are the early signs of the blue chip enterprises that use their own brands to seek high-quality growth.

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From the promotion of brand competitiveness to the business achievements of various industry brands, we observed two important phenomena: first, the enhancement of brand value can not be separated from the close combination of brand and business strategy.

The combination of brand and business can enable the brand to truly fulfill its commitment to the market and the customers, enhance the brand force to a greater extent, and at the same time, the brand can also become a strong competitive advantage of the enterprise, and the advantage of monopoly protection or possession of special resources will be broken.

Second, the operation of brand thinking from "big" to "strong" challenges not only the pace of business development of enterprises, but also challenges the management thinking and management ability of enterprises in brand management.

In terms of brand management, the road of Chinese brand has just begun. We should not be too hasty, because this is a systematic project. From personnel training to internal system construction, brand quality enhancement needs phased goals and various brand strategies to match.