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November 15, 2018

Who owns a brand?

Coca-Cola is one of the best known brands in the world. /REUTERS
Coca-Cola is one of the best known brands in the world. /REUTERS

As African economies transition rapidly to being market-led, the question of who really owns a brand becomes more pertinent. Growing African businesses are keen to assert ownership of the brands they have spent money to create. Yet few take steps to value such brands as assets on the balance sheet. The separation of brand value from the more traditional assessment of goodwill is still a work in progress.

Elsewhere on the globe, companies take pains to assess and record the tradeable value of their brands, separate from the bricks, mortar and machinery of the business. Apple, the world’s most valuable brand for many years was written into the 2016 Accounts at US$145,918 billion, according to BrandFinance. Coca-Cola, down five places from 12th to 17th disappoints the bean counters with a mere US$34,180 billion. While, in 48th place, the US logistics giant UPS could have been yours for a mere US$19,565 billion.

Here in East Africa, very few brands have been sold to other owners and then developed. The focus has been on acquiring corporate brands and then changing their identity, with varying degrees of success. So the time for trading in brands is still ahead of us. And another factor will impact on this: consumer power.

Consumers now have unprecedented influence on the success of brands. Millions of people, previously obliged to select from a narrow choice in limited categories are now making informed purchase decisions thanks to online technology and social media. They benchmark performance and reputation against both local and international brands. They take heed of peer group opinion and emotion. In short, their brand loyalty will never again be unquestioning.

Branding purists have always said that products are made in factories, but brands are maintained in the hearts and minds of consumers. Perhaps they are right. While consumers are unlikely to have the power to prevent the sale of a brand, they can deny it their support.

In Geneva, the Swiss make a brand of watch called Patek Philippe. Very few of us would ever have heard of it, were it not for its advertising. Back in 1996, someone very clever decided that this brand would address the fundamental human need for LEGACY. The desire to pass on something of value to the succeeding generation.

Since then, every advertisement for the brand has featured beautiful photographs of cross-generational groups. Initially the models were all men, but more recently grandmothers, mothers and daughters have appeared. The headline is always the same. The dry and skilfully underwritten: "You never actually own a Patek Philippe. You merely look after it for the next generation."

I think that might sum up the changing role of the brand owner in consumer economies. As the old certainties evaporate, brand ownership will become increasingly transient. Creating and realising value from brands will take greater skill and commercial acumen. It will become a primary focus for commercial leadership, and no longer be delegated to young brand managers with short attention spans. 

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