Digi has reclaimed its title of Malaysia's strongest brand from PETRONAS, with a brand strength index (BSI) score of 87.3 out of 100 and a corresponding AAA brand strength rating, according to Brand Finance's report on the top 100 most valuable and strongest Malaysian brands. Meanwhile, PETRONAS had a BSI score of 87.0 followed by Maybank as the third strongest brand with a BSI score of 86.8.
Meanwhile, Padini continues to be the brand with the highest intangible value with a brand value to enterprise value ratio of 61%, followed by Bonia at 43%. According to Brand Finance, this highlights the role of brands in business success, especially in the retail sector.
Brand Finance's APAC MD, Samir Dixit, said brand strength has remained stagnant for most Malaysian brands outside of the successful top 10. He explained:
While they may be doing well locally, many have been losing out to some of the key competitors in the region. Malaysian brands need to better monitor and boldly invest in their brand strength to build up competitiveness outside of their home market.
The brand strength is determined by analysing three core pillars: inputs, which are activities supporting the future strength of the brand; equity, which are real current perceptions sourced from its market research and other data partners; and output, which are brand-related performance measures such as market share. Each brand is assigned a BSI score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding brand rating up to AAA+ in a format similar to a credit rating. Alongside revenue forecasts, brand strength is also seen by Brand Finance as a crucial driver of brand value.
Top 10 most valuable brands in Malaysia
PETRONAS was once again named Malaysia's most valuable brand for the 11th consecutive year with a current brand value of US$12.0 billion. According to Brand Finance, it is still the only brand to break the US$10 billion mark in Malaysia. Meanwhile, Maybank retained its second position with a brand value of US$3.7 billion, followed by Genting in third with a brand value of US$3.1 billion. Despite PETRONAS’ 21% decrease in brand value this year, the gap between PETRONAS and Maybank remains wide open at over US$8 billion. All top 10 brands managed to retain their positions compared to last year.
The remaining seven brands in the top 10 - including brands such as CIMB Bank, AirAsia and telco company Digi - also maintained their positions in the ranking with a combined brand value of US$12 billion. As a result of COVID-19 crisis, the total value of Malaysia’s top 100 most valuable brands in 2021 has dropped by 12% from the previous year to US$49.3 billion, Brand Finance said. The top 10 valuable brands account for 63% of the total brand value, while the bottom 50 brands contribute only 7% of the total brand value, highlighting the significant effort required from brands outside the top 10 should they wish to contest the status quo in Malaysia.
Dixit explained that the Brand Finance Malaysia 100 2021 ranking continues to be "very top-heavy" yet again this year. "We would like to see a more diverse mix at the top and more significant brand value increases at the bottom," he said. To do so, brands must focus on building brand strength, rather than being sales and offers driven. Such tactics might help in the short term but can ultimately undermine the long-term value of brands.
Boards must treat brands as strategic assets, instead of seeing them as legal trademarks only.
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