Historic Brands Inspire Trust in Tough Times
How is the recession affecting business-to-business brands? Those with heritage -- especially brands that made it through the Great Depression or have shown they can survive a crisis -- will be looked upon more favourably, according to Stephen Cheliotis, chairman of Superbrands, commenting on this year's ranking of the top 500 B2B brands.
The flight to quality will continue, according to Cheliotis, and while a brand's not likely to be judged poorly on short-term financial results, one that falls out of favour in the current climate will have a harder time clawing its way back.
Take BA, once a regular in the top 10 ranking. Its reputation has been eroding for years and last year's T5 fiasco just added insult to injury. It's now rated at 36, having lost ground to rival Virgin Atlantic. So what? In a year of intense pressure in the airline business, when mergers are being sought and business customers are falling away, this loss of B2B custom is significant.
Survival brands will focus on quality and adding value, on reliability of service or product, and on distinguishing themselves from competitors. Those strengths can provide a degree of protection during a downturn and allow a business to grow more quickly during an upswing.
Overall, there's more global representation in the top 10. But among the British businesses, the standout brands are all established organisations with a history of resilience, deal-making prowess, shareholder return and, in most cases, an underdog quality -- (BUPA seems to be the exception to the underdog rule, but it's older than you may think at 62).
- Rolls Royce is the 'little engine that could' in the face of industry pessimism and under-development in the UK.
- The London Stock Exchange may (undeservedly) fall out of favour next year when the full effects of the financial meltdown are reflected in the listing, but it's a brand that remains respected among competitors and has held out for a worthy suitor. (That prince hasn't come.)
- GlaxoSmithKline (which is over 140 years old in its various guises) has nine lives, an aura of intellectual rigour and a mixed reputation -- its attitude to generic drug production in developing nations a particularly sore point.
- BP has come so close to falling from grace so many times since Lord Browne's ignominious departure, it's hard to know where to begin. Yet it remains a significant investor in low-carbon technologies and benefits from being the most accessible and apparently well managed of an unlovable group of oil giants.
How else will brands be affected? It's easy to see how a recession could make consumers nostalgic (benignly) or nationalistic ('British Brands for British Businesses').
But will the business community be swayed by national pride? If this year's fast-rising brands are anything to go by, it's possible.
Fast risers
The Fairtrade Foundation (currently celebrating Fairtrade Fortnight).
Special bounce-back award goes to: Compass Group.