Brand Finance, in partnership with Brand South Africa, recently named the 2016 top 50 brands and awarded the top 10 during a ceremony held at the Nelson Mandela Foundation in Houghton.
Each year, the leading brand evaluation and strategy consultant, Brand Finance, puts thousands of brands to the test. These are evaluated to determine the most powerful and valuable brands by industry and by country.
According to chairman of Brand Finance Africa, Thebe Ikalafeng, the company went through 250 brands to reduce it to the top 50. “It is quite a momentous task to scour through the listings, annual reports and analysts’ reports to try and understand what the top 250 brands in South Africa are and to be able to reduce them to the top 50.”
According to the chairman, a five-step methodology is used to separate the best from the rest. “We try and estimate, over a five-year period, the revenues that the business is going to generate. We then try and establish a royalty rate which is the most preferred approach by financial stakeholders.
“We do evaluations for the biggest businesses in the world and the reason businesses value us is because of this methodology of the royalty rate.” Explaining the royalty rate Ikalafeng said it was the rate one would charge if they had to license a particular brand.
“We then access the brand strength and then do the calculations. It’s a rigorous methodology, well established, well respected.”
Brand South Africa’s chief executive officer Dr Kingsley Makhubela said the day was about paying tribute to all the good brands that are creating jobs in the country amidst the challenges faced by it. He revealed that, in October, there was a plan in place to host a university dialogue by academics on nation-building brands at the University of Pretoria. This dialogue would be a gateway to an Africa dialogue to be held in 2018.
“The intention is that in 2018 we invite scholars from across universities in the continent to talk about how to build strong nation brands,” said Makhubela. “It’s good to let academics speak openly. Part of the agreement that we have for our meeting in October is that academics must speak openly about what we are not doing and what it is that we need to do. And we hope to consolidate the findings that are coming out of this dialogue to put them in our planning.”
He added that there was a lot of interest from other sectors to participate but, for now, the academics were vital in driving the process and to conduct detailed research and comparisons including lessons that could be drawn from brands which are succeeding.
Jeremy Samson, Brand Finance Africa director joined Makhubela and Ikalafeng to hand out accolades to the top 10 companies. In first place was MTN, followed by Vodacom in second, Sasol in third, Standard Bank in fourth and Woolworths in fifth place. FNB, Absa, Nedbank and Investec followed respectively with the last spot taken by the Mediclinic Group.
