Forum Challenges African Brands

Published on 3rd October 2006

BusinessWeek in conjunction with Interbrand recently released a list of the top 100 global brands. Topping the list was the ‘usual suspect’, Coca Cola, with a brand value of $67 billion.

Top ten brands on the list include: Microsoft, IBM, GE, Intel, Nokia, Toyota, Disney, McDonalds and Disney. This is the sixth year that Interbrand has done such a brand valuation that revealed yet again, the dominance of brands from the United States.

Sadly, no brand from Africa made it to the top. This is compared to a 51 per cent representation from the United States and other countries like Germany - the home of Mercedes, which came a distant second with nine per cent. The Asian continent gave a good account of itself with Japan (eight per cent) and South Korea (three per cent).

To shed light on this and other pertinent branding issues, Brandscape brought together marketing professionals in a session known as BrandForum to discuss this phenomenon.

The BrandForum kicked off by seeking to explain the reasons behind the success of the top rated brands. Fatima Alimohamed, Bidco Head of Integrated Marketing and Communication (IMC) said that none of the top ranked brands, apart from Coca-Cola, fell into the fast moving consumer goods (FMCG) category.

Fatima’s comments led to a debate as to whether goods generally not considered FMCG such as McDonald’s burgers and Microsoft’s software had become FMCG through the sheer volumes moved in the market. Virgin, while missing from the list of top 100 brands, somehow found its way into the debate when Bigger Picture Trainer and Consultant, Robert Wamai said, “I’m surprised that Virgin beat Mercedes.” Virgin has obviously caught the attention of many in the branding world but was easily edged out by the criteria which Tom Sitati, Director Brandscape noted, was heavily dependent on how much revenue a brand was able to secure. “If the criterion used by Interbrand was based largely on market sentiments, Virgin would beat many of the brands in the top 100 while Microsoft, which has over the years attracted a lot of bad publicity, may have found itself missing from the list!”

The criteria used by Interbrand took into account factors such as the brand’s recognition, consistency, emotion, uniqueness, adaptability and management. Global brands were adjudged as those that were publicly traded and generated at least 30 percent of their revenues outside their home countries. The Interbrand model used for valuation starts by “forecasting the current and future revenue specifically attributable to the branded products. The cost of doing business (operating costs, taxes) and intangibles such as patents and management strength, are subtracted to assess what portion of those earnings is due to the brand”. Apart from Coke, trademarks were not used as part of brand equity measurement as Coke had patented their formula.

The BrandForum panel also wondered why African brands failed to feature in the list. However, participants could not easily nominate African brands that deserved to be on the list, with some proposing Brands like Del Monte and Castle.

“We spend much time building other people’s brands while having none of our own to be proud of,” said Fanis Nyangayi, proprietor of Target Marketing, Tanzania. Fanis wondered how Tanzania, which many Kenyans consider (less developed compared to Kenya), has its own home-grown brands such as Foma Gold.

The panel sought to explore what African brands could learn from the United States which is on the top of the world when it comes to brand power. Was there a relationship between the success of a national brand and the success of the brands within the nation or generated by the nation?

Jebet Chemgorem of GreyOwl, a brand design agency, said that top brands had created an ‘emotional attachment.’ The top brands connected with consumers at an emotional level such that consumers actually had an intimate relationship with them.

Time was also raised as a factor by some of the participants. However, Tony Gatheca (Sales Manager, Capital Group) had a different opinion, citing the success of Safaricom – a mobile phone company in Kenya. “The Safaricom brand has been built in a short time – it’s not about time,” he argued. He added that Americans had better brands as their culture is permissive while Kenya’s is conservative, “it is therefore easier for Americans to create and grow brands.”

China has been able to change its image and its product and services are being accepted,” noted Tom Mogusu (Business journalist, East African Standard). This gives hope to nations and brands that are not in the top league yet.

The BrandForum also had a lively debate on whether a brand should be considered Kenyan because the population has an attachment to it. Some participants advocated for brands being properly patented so as to belong while others felt the emotional connection qualified brand ownership.

Cases of the ciondo (traditional basket) and the Maasai shuka being ‘owned’ by foreigners without regard to the country of origin were quoted. This is not far from the case of Manchester United being owned by Americans and Chelsea being owned by a Russian. Some of the brands that were noted as truly indigenous Kenyan brands included Dorman’s Coffee, Citizen Television, Kenya Broadcasting Corporation (KBC), Kenya Television Network (KTN), Kenya Airways (KQ) and the Carnivore restaurant.

Gerald Owino (General Manager, Instant Grass East Africa) highlighted the issue of intellectual property rights as a possible hindrance to innovation and brand building. This might explain why Africa and Kenya in particular has yet to create world beating brands.

“Young guys are creating brands such as Mau Mau wear and Jamhuri wear. These are brands we are not respecting. We do have Kenyan brands,” he said.

While a legal framework exists somewhere on paper, it is neither widely known nor is it enforced. There is need for Kenya Industrial Property Organization (KIPO) to be approached in the quest to nurture local brands. Lingala, a popular Congolese music genre which has its origins in benga music from Luo Nyanza is an example of intellectual property or brand that was not well guarded and has made its adopters instead of its originators millions of dollars in Africa’s thriving music industry.

Tom Sitati concluded the session with a quote from Gerald Mahinda, the Chief Executive of East African Breweries who attributed the firm’s recent impressive financial performance to a focus on “people, business and brands.” If this is an indication of the direction the big boys are taking, brands are beginning to take their rightful place in African businesses and it’s time for African brands to stand up and be counted.


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