· Qatari brands making strides in the Brand Finance Middle East 50
· Year-on-year brand value growth 6% globally, 11% Middle East, 21% Qatar
· The table includes the Middle East’s 50 most valuable brands
· Emirates remains the region’s most valuable brand at US$7.7bn
· Brands from Bahrain, Jordan and Egypt forced out of the top 50
Every year, leading brand valuation and strategy consultancy Brand Finance puts thousands of the world’s top brands to the test to determine which are the most powerful and most valuable. The top 50 brands from the Middle East are featured in the Brand Finance Middle East 50.
Emirates is the region’s most valuable brand and it continues to soar, with brand value growth of 17% taking its total to over US$7.7 billion. The airline continues to invest in ventures that enhance its brand. In mid-2015, Emirates spent US$20m to secure ‘Friends’ star Jennifer Aniston in an advertising campaign, which appears to have translated into improving brand strength. The scores for metrics such as preference, satisfaction and recommendation have all improved this year but those most closely tied to advertising, familiarity and consideration, have improved the most.
The UAE and KSA continue to dominate the list, contributing 16 and 21 of the brands respectively to the list. Qatar has the third most significant presence in the table with 8 brands. Qatar Airways continues to lead the way, with a brand value of US$3.5 billion. It is growing faster than Emirates, with year-on-year growth of 26%, though it remains a long way off rivalling the Emirati brand for brand strength and international renown.
Qatari brands as a group are growing faster than those from any other country in the Middle East. The average year-on-year growth rate for brands globally is 6%. In the Middle East it is an impressive 11%. However Qatari brands have an exceptional growth rate of 21%. Brand Finance CEO David Haigh comments, “The exceptional growth of Qatari brands reflects both the major strides the nation has made in developing a broader-based economy and the level of investment and expertise applied to its brands. We expect to see a continuation of this trend as Qatar rivals the UAE and KSA for dominance in the Middle East’s brand landscape.”
Brands from other nations have not fared so well. As recently as 2013 and 2014, brands from Bahrain, Iraq, Jordan and Egypt featured in Brand Finance’s list. As a consequence of instability, perceptions of weak, corrupt governance and excessive government intervention in the economy, the Iraqi, Jordanian and Egyptian brands have fallen out of the table. Meanwhile those from Bahrain (Batelco and Al Baraka) have been squeezed out by the growth of Qatari brands.
Kuwait and Oman may suffer the same fate. In 2015, there were 6 Kuwaiti brands in the table. This year, there are only four, though Kuwait’s most valuable brand, NBK, continues to grow strongly. This trend suggests that while the countries of the Middle East outside the GCC have much more significant economic issues to address before their brands can thrive, smaller GCC nations (Oman, Kuwait and Bahrain) should take steps to encourage brand investment, monitoring and management.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (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.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.