Top UK brands ranked by value

BRAND VALUE

In the latest BrandZ listing of Top 75 UK brands, a brand's value depends on consumer perceptions of innovation, differentiation and communication. Strong brands not only innovate, they communicate their differentiation to remain top of mind amongst the target market of consumers.

According to Kantar Millward Brown, which conducts the BrandZ studies, the top five UK brands in terms of value are all well established with consumers and have a high public profile:

5. Sky (telecom)

4. BT (telecom)

3. Shell (energy)

2. HSBC (financial services)

1. Vodafone (telecom)

Kantar also notes the value growth of many relatively new brands such as Deliveroo (delivery of takeaway orders) and BrewDog (craft beer).

What do brands need to increase or maintain their value amongst consumers?

'To grow, they need to work on increasing consumer perceptions that they are different, innovative and relevant', says a Kantar UK exec. 'The disruptors entering the ranking, meanwhile, need to make their difference meaningful and salient to consumers – if they fail to do so they could have a short lifespan'.

Marketing a mood, not just a raincoat

https://stutterheim.com/uk

Stutterheim is a raincoat brand that has grown quickly by marketing a mood--melancholy, to be exact. The strapline: 'Swedish melancholy at its driest'.

To quote the company's website:

 Feeling blue inspires creativity.

Today, Stutterheim is known for handsewn, upmarket raincoats that are functional as well as fashionable in a 'timeless' way. Emphasising fashion as well as function, Stutterheim also markets limited-edition coats.

Specialty stores such as Harvey Nichols and Le Bon Marche stock Stutterheim in major global cities. The company operates its own store in Stockholm and in New York City.

If Stutterheim had no story line, it might be just another quality fashion raincoat manufacturer. But marketing the creativity of the mood, alongside the quality coats and other products, enhances the brand's appeal and differentiates it from competitors. Two key points of difference are in the mix: mood (or lifestyle) and quality.

The mood is captivating a growing number of brand fans: Stutterheim's Instagram account has 55k followers; its Facebook page has 31k likes; and its Twitter feed has nearly 1k followers.

Differentiation through sustainability

In this era of intense competition and easy consumer access to detailed information about products and brands, marketers are differentiating themselves through dedication to sustainability and social responsibility.

H&M, Marks & Spencer and IKEA are only 3 of the growing number of global marketers being recognised by the Better Cotton Initiative for their use of sustainable cotton. The ranking shows which retailers and manufacturers are actively seeking out ethical sources of cotton grown in earth-friendly ways.

World Wildlife Federation, with funding from IKEA, piloted the original initiative to grow cotton sustainably. Now that effort has grown into an international movement.

Brands such as Asos, Nike and M&S recently pledged that all of their cotton goods will be made from sustainably grown cotton by 2025. As part of their pledge, these brands will annually publish their performance in progressing towards this commitment.

In addition, marketers are also looking to increase sustainability by sourcing wool and other materials in ways that protect the environment and the workers. Stella McCartney, for example, has achieved Cradle to Cradle Gold certification for the wool used in its fashion products.

More brands are choosing this method of differentiation, knowing that many consumers pay close attention to sustainability factors when making a purchase decision.

Specsavers focuses on differentiation

Specsavers differentiates itself from other providers of spectacles by focusing on two key points of difference: (1) affordable pricing and (2) stylish frames.

The company, which partners with local optician professionals in the UK and Australia, as well as in Europe, has some 2,000 retail locations. With buying power like that, Specsavers can offer a variety of fashion frames at popular prices. It is also expanding into the niche of prescription safety glasses through a licensing deal with JCB.

The company seeks efficiency of operations to keep costs and prices low. For instance, it is streamlining its information technology arrangements and outsourcing to the cloud. It is also applying the latest manufacturing technology to the products it sells--including sustainable energy to keep Specsavers green.

Among the marketing techniques Specsavers uses is social media marketing on Facebook and beyond. The #LoveGlasses hashtag highlights images and posts that relate to its style credentials, all part of the marketing plan based on Specsavers' positioning of affordability and fashion.

This post updates content in Chapter 4 of Essential Guide to Marketing Planning, 4th edn.

Brand personality builds marketing impact

Brand personality is a key ingredient in any marketing plan--especially for small businesses that want to grow quickly. Differentiation communicated with personality, including perhaps a bit of humour, attracts attention on a small budget to build brand awareness and preference. 

For example, Jimmy's Iced Coffee is a fast-growing business based in Dorset. Its brand personality shines through all of its marketing, from the logo to the product packaging and beyond.

The packaging shows a tagline ("Keep your chin up") from the first Jimmy's YouTube rap-beat promotional video, which attracted 3.5 million views in a year. It also echoes elements from Jimmy's brand history. Jimmy's has, in fact, expanded distribution by emphasising its brand personality and is now on the shelves of Tesco, Sainsbury and other major UK grocery chains.

What's Jimmy's secret to social media marketing? 'The good thing about online, if you do something offline you should be able to just put it online and show people what you’re doing. It’s not just pack shots of our cartons on Instagram all day long', he tells Management Today.

Take a look at how brand personality is showcased on Jimmy's social media: Instagram, YouTube and Facebook.

Same-day delivery: marketing battleground for retailers

Sainsbury's recently announced it would offer same-day delivery of groceries ordered by noon. This is one of the ways the supermarket giant is battling aggressive competition from Amazon and no-frills discounters like Aldi. Sainsbury's is also proceeding with its acquisition of Argos, which itself offers same-day delivery or collection of toys and other products.

Amazon is offering same-day grocery delivery in London (in partnership with Morrisons for certain private brands). Whether delivered by drone in the future, as shown above, or not, Amazon Fresh promises Prime members that orders placed before the cutoff time will be at the customer's door by evening.

Rivals Aldi and Lidl are feeling the challenge of Brexit's impact on currency fluctuations. Because both Aldi and Lidl source many products from EU suppliers, the UK stores have to deal with higher costs when the pound sterling is low--and higher costs cut into already thin profit margins. For Sainsbury's and other UK-based retailers, however, this may present an opportunity to press price war advantages.

Meanwhile, speedy delivery is a niche being explored by startups such as Convibo, which offers one-hour delivery of grocery orders from London retailers such as Whole Foods and Waitrose. How much demand exists for one-hour delivery, compared with same-day delivery, is unclear--but this startup is a good example of distribution in general and service in particular as key points of differentiation.

Speedier self-service at McDonald's

McDonald's UK wants to speed up ordering by having customers touch a screen just inside the entrance to its UK outlets. Tap to order meals or a coffee, insert a payment card and retain the receipt so you can collect your order by number. Those cashiers who previously staffed the till are now working behind the scenes or delivering meals to the table. Also being tested: delivery to home or office.

Amidst intense competition for the 'fast casual dining' customer, McDonalds needs to differentiate itself and refine its positioning. Self-serve ordering is one way to appeal to customers who habitually tap screens (smartphone or tablet) to order all kinds of products. The screen also updates the look of the outlets, adding a modern touch to a brand that has been in business for decades. The Aberdeen McDonald's, soon to open, is being promoted as 'high tech' because of its proliferation of screens and its table service.

Liverpool, interestingly, has a high concentration of McDonald's units, much higher than the national UK average.

Despite the high-tech updates, McDonald's UK continues its low-tech frequent-buyer reward scheme to encourage loyalty amongst coffee buyers. Every coffee cup comes with this peel-off loyalty card, good for a free coffee after the purchase of 6. This is an easy way to keep coffee lovers loyal without a lot of technology to slow down transactions.

WOW uses low price for differentiation

Have you heard of WOW Air? It's a young no-frills airline in Iceland that offers bargain fares from London's Gatwick airport to two U.S. cities (via Reykjavik, Iceland, of course) and to a growing number of European destinations.

The three-year-old startup uses only Airbus A 320 and A321 aircraft, for standardisation and for fuel efficiency. Entrepreneur Skúli Mogensen recognises that costs are especially favourable at this moment for two key reasons: first, 'historically very low oil prices' and second, it's a buyer's market for aircraft, which 'is a great opportunity for us'.

As a result of low costs and for marketing differentiation, WOW offers highly discounted fares to attract cost-conscious passengers who are willing to pay extra for extras such as checking luggage and reserving a particular seat in advance.

Why use price as a competitive advantage? Mogensen explains: 'You ask people what’s important to them and they say things like seat pitch – but when they go online to book they don’t get any information like that: 80% of passengers just go for price'. The deepest discounts are offered on a very few selected flights and for limited periods, to encourage immediate customer response and reinforce the bargain image.

Yet competition in the airline industry is notoriously intense, and price wars can sap the profitability of any carrier. Even with a well-crafted positioning and lots of low-cost social media marketing (Twitter, Facebook, Pinterest, YouTube), can WOW Air break through the marketing clutter and fly high for the long term?

Keeping up with key performance indicators (KPIs)

Key performance indicators (KPIs) are specific financial and non-financial measures that a company, governmental agency or NGO uses to determine whether its marketing strategy is moving the organisation in the direction of its short- and long-term goals.

Different industries rely on different KPIs to assess marketing performance. Banks--including Metro Bank, based in London--want to increase the number of account-holders, increase the number of services utilised by each customer, increase deposits and retain customers for years. Performance is measured by KPIs that indicate progress towards those goals.

Metro Bank, a 'challenger bank' competing with long-established banks on the high street, differentiates its neighborhood 'stores' on the basis of responsive, in-person service while offering online and mobile banking for customers who want tech options. Measuring the results of Metro's marketing strategy requires KPIs that link back to the goals, such as growth in customer deposits. Another KPI is profitability--so far, a goal that Metro Bank is moving towards but has yet to achieve.

What about KPIs for retailers? Online grocery retailer Ocado seeks to increase customer spend, among other goals, which translate into KPIs such as growth in average order size. As the above table from Ocado's recent results indicates, other KPIs include average number of orders per week, average deliveries per van per week and on-time delivery performance. Product wastage is not just a financial measure--it affects Ocado's sustainability performance, as well.

L'Oréal in China

Eyeing the growing affluence of Chinese consumers, global beauty giant L'Oréal is implementing a major marketing strategy to increase sales in that country by at least 10% during 2013. It purchased local brand Yue Sai in 2004 and has expanded retail coverage to reach more shoppers in more Chinese markets and introduce its other brands, not only in the largest cities but in smaller cities around the country.

With market segmentation, L'Oréal is using a differentiation strategy to target specific segments. The CEO for China states: 'You have to have an answer for very different needs'. In other words, one beauty brand or product does not fit all.

That's why L'Oréal has specialised product development programmes in place, as well as retail marketing elements geared to the buying patterns of Chinese consumers.

Because beauty products are aspirational, internationally-known celebrities like Emma Watson and local superstars like Fan Bingbing and Andy Lau add cachet to the firm's Chinese promotions.

And if you think the company is targeting only women, think again. As in other parts of the world, L'Oréal is also targeting men who buy skin-care products and other personal care items. 'We estimate that the men's cosmetics sector has grown at twice the rate of the total beauty market in China', says the chief executive.

Leveraging its French luxury image, L'Oréal is now ranked as the second-most valuable beauty brand in the world (behind Olay, owned by rival Procter & Gamble).