Matthew Miller
Nov 7, 2019

Carmakers and telcos top first ever BrandZ Japan ranking

WPP and Kantar's ranking reveals the uncommonly high value of brand purpose and innovation in Japan, but also highlights an international 'brand equity gap'.

Carmakers and telcos top first ever BrandZ Japan ranking

WPP and Kantar have released the inaugural BrandZ Top 50 Most Valuable Japanese Brands ranking. While the top brand will come as no surprise, the report nonetheless delivers interesting findings regarding the power of brand purpose and the work Japanese brands have cut out for them abroad.

With a brand value of US$29 billion, Toyota stands $9 billion ahead of second-place NTT (including NTT Docomo) and exceeds third-place Honda's brand value by about 2.5 times. Toyota's effort to  transform itself from an auto company into a mobility company is apparently working, as consumers perceive it as being highly innovative, providing a good brand experience and having a strong purpose, the report authors stated.

The collective value of the top 50 Japanese brands is $223 billion, a total surpassed only by the US, China, Germany, France and the UK. 

Cars and phones

The top 50 contains brands from 17 different categories. Automotive is the most valuable, with six brands accounting for 25% ($54.7 billion) of the top 50's total value. Thirteen retail and apparel brands made the list, accounting for 18% ($39.7 billion). 

Power, innovation and purpose

  • Two airlines top the ranking of the brands exhibiting the most brand power, which measures consumers’ predisposition to choose one brand over others in the same category.
  • Among the 16 countries BrandZ ranks, Japan’s most valuable brands are the most purposeful—a measure of how consumer’s feel the brands make their lives better.
  • Yamato Transport (No. 24, $2.7 billion) is the most purposeful Japanese brand. The brand also ranks highly for innovation and brand power.

International brand-equity gap

Only two Japanese brands appear in the BrandZ global top 100 (Toyota at 41 and NTT at 70), which represents a significant decline over the past 13 years.

The ‘overseas exposure’ of Japanese brands (a combination of revenue, volumes sold and profitability from overseas) sits below the average of other BrandZ international markets, with many domestic companies still adopting a ‘Monozukuri’ approach towards branding, according to the report.

David Roth, CEO of The Store WPP EMEA and Asia and chairman of BrandZ:

Japanese brands have a fantastic opportunity to close the current ‘brand equity gap’ and improve their global competitiveness. There is ample room to grow their stature abroad and, with high quality offerings that are coveted by consumers, they have the potential to increase their brand value through exploring factors that underpin their success and amplifying this with good communications, marketing, innovation and other brand building efforts.

The report compiles the following five takeaways for marketers: 

1. Invest in brand to reap rewards

Brands that are healthy and strong in consumers’ minds reap significant financial rewards. They can best generate volume sales, justify a premium, and grow their value at a pace that outperforms brands in general. With the debut of the BrandZ Japan report, we can confidently say that investing in brand building pays off in Japan as well as worldwide. And there is every reason to believe that the future will hold similar results. 

2. Meaningful difference fuels brand value

Japanese brands that are seen as Meaningful—as making a positive difference to people’s lives—and that are seen as Different to other brands in their category, are worth significantly more than their less Meaningfully Different counterparts. Meaningful Difference is conveyed through products and services but also through powerful and memorable communications. 

3. Innovation generates the biggest reward

Brands perceived by consumers to have strong Innovation credentials are much more valuable in the BrandZ Japan Top 50 rankings. Businesses should realize, however, that innovative products don’t always translate to an overall higher Innovation score for the brand as a whole. There is an opportunity for Japanese brands to emphasize attributes like disruption, creativity, and leadership to boost their overall reputations for Innovation, and win subsequent financial rewards.

4. Salience adds value

If Meaningful Difference helps to position a brand for future growth, Salience can serve to launch it into the top tier. A brand is Salient if it is recognizable and top-of-mind at the time of purchase. Salience is an especially important factor for growth in Japan, where highly Salient brands are worth more than 50 percent more than brands with low Salience.

5. What works at home doesn’t necessarily translate abroad.

There is a need for new strategies to close the gap between Japanese brands’ domestic and overseas reputations. While it’s important to maintain a unified brand image worldwide—and localization shouldn’t come at the expense of this brand cohesion—some brand strategies that work at home might not work as well abroad.

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