Page 63 - BrandZ Top 100 Most Valuable Global Brands 2014

Section 03 | Thought Leadership

RISE AND FALL:

Figure 1: The Brand Life Cycle: years to move 1.4
between quadrants. The transitions are estimated
1.2
based on the moving brands (41% of brands
included in the analysis)
1.0
EXPLORING
0.8 ge
ta
0.6 ol
V
12+
yrs
0.4
THE Building Dominance
0.2 Meaningfulness
Movers
0.0
41%
1.0 2.0 3.0
4.0 5.0
e
agrs
5+
Presence
lt+ y y
BRAND
Vo5rs
Birth Stayers The brand life cycle also varies by continent (Figure
59%
3). Average growth rates in Asia are signiicantly***
higher than in Europe for example, which may be
Decline Begins
driven by wider economic and social changes. If this
Death 28+
yrs
is the case we may expect to see brand growth rates
LIFE in Africa increase over the coming decade. While
South America has the highest average growth
rate this igure has been in slow decline over the
Presence
last decade.

This is a preliminary analysis of BrandZM data.
CYCLE
We have identiied a typical brand lifecycle in which
Mindshare’s BrandZM brand transition analysis has brands rise and fall over a period of a half a century.
identiied the life cycle of a typical brand (Figure 1). Clearly there are many outliers and the dynamics of
We’ve estimated the average growth rates of
growing brands and calculated journey times this cycle will vary considerably by market. Most
between quadrants.
brands remain stationary, at least over the period
we’re looking at. We’ve found an asymmetry
between the growth and shrinkage phases, implying
Brands begin life in the bottom left quadrant, with dominance is to some extent self-reinforcing, which
low Presence and low Voltage*. It takes at least ive
Aleksandra Iljina
years to travel up to the top left quadrant, during its with what we see elsewhere e.g. PIMS database.
Senior Analyst Developer
which time brands begin to develop a following.
Smaller brands that are growing tend to move
faster than their larger counterparts, implying
Mindshare To grow to a strong dominant position in the top convergence, however many will fall out along
Aleksandra.Iljina@mindshareworld.com
Google ‘brand life cycle’ and you’ll get: some charts, right quadrant, with high Presence and high Voltage the way and become sedentary.
a dusty academic article, many assertive blog posts takes a further 12+ years. For those with momentum,
Duncan Stoddard
and a set of lecture notes. From each emerges a the full brand lifecycle is on average approximately
common theme of rise, maturity and stagnation or 50+ years.
What is yet to be fully determined is what impact
Account Manager
decline. Innovations and changing consumer tastes digital and social media marketing will have on the
Mindshare typical brand life cycle. It’s reasonable to speculate
Duncan.Stoddard@mindshareworld.com
bring into being new contenders with new stories to But this is just the movers. Of the brands we looked that newer brands may reach the top left quadrant
tell; the old adapt or else fade away.
at, 59 percent don’t move signiicantly over the in less than ive years, their trajectory being
15-year period studied, either in terms of Voltage or
But how much motion is there in the brand space? Presence. They remain in either healthy or frail stasis, propelled by the disruptive forces of connected
What does a successful brand look like, and how or else crawl along imperceptibly slowly.
consumers and the transcendence of geographic
boundaries. However, unlike brands that have
long does it take to grow one? Do brands die out, strategically invested in the development and
or is dominance self-perpetuating? How do these The standard story of diminishing returns to nurturing of their values and consumer relevance,
elements vary across markets?
advertising suggests that smaller brands with
momentum should grow faster than their larger those that rely on the ickleness of consumer favour
It is with these questions in mind that we set about counterparts. Conversely larger brands may be able may ind they fall further, faster.

analyzing the BrandZM study database. Our core to leverage their scale to protect themselves from *Brand Voltage is a one-number summary of the growth potential of
hypotheses are that:
decline. If we split the journey into two phases of a brand. It takes into account how many people are very loyal to the
Founded in 1997, Mindshare was set up to pioneer and innovate
growth and shrinkage we can see that the growth brand (the brand’s bonding score) and claimed purchasing data for
– There exists a typical brand life cycle.
in order to give our clients a competitive advantage. In the phase takes around 17+ years, whereas the the category to produce a single Brand Voltage number.
intervening decade, we have been the world’s fastest-growing shrinkage phase around 33+ years. This apparent ** The category covers IT Hardware and Software, Gaming, Mobile
devices and Televisions.
– It takes a long time to grow a brand and new media agency – and we have witnessed a true communications asymmetry between rise and fall lends support to *** We have rejected the hypothesis that there is no signiicant
brands tend to grow faster than established revolution. Traditional notions of what marketing agencies can do this hypothesis.
difference between the growth rates by different continent at probability level lower than 5%. It is worth mentioning that voltage is
brands.
have been ripped up and the lines between digital, creative, media, a slowly moving metric, therefore even 0.1% difference in growth may
direct and consultancy have blurred. For right now and for the Figure 2 illustrates how growth rates vary by the be signiicant.
– Those that do grow are able to retain their superior future our ambition is to lead the deinition of what a media agency sector for Voltage and Presence. Across both
position more easily than others.
can do and should do.
metrics we see the highest growth rates are in

Electronics & IT**, which may relect wider shifts
– The causes of motion, namely technological Further information can be found at:
in technological progress.
and social disruptions, imply varying degrees http://www.mindshare.co.uk/
of dynamism across markets (geographical
and product).

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