New Delhi: Tata group firm Indian Hotels and auto major Mahindra & Mahindra are the only Indian brands to figure in the list of 27 top ‘Great Brands of Tomorrow’ compiled by Credit Suisse.
The list also includes computer hardware maker Apple, Hyundai Motor, luxury car maker Mercedes-Benz, world’s largest watchmaker by sales Swatch, networking site Facebook and online market place Alibaba.com.
According to Credit Suisse Research Institute, the global brands figuring in the list would significantly outperform the market over the next 3-5 years as they build and leverage brand equity to grow in size, scale and profitability.
“Strong brand companies have consistently generated out- sized long-term growth and returns for shareholders,” said the report, which took an in-depth look at how a company’s brand can offer competitive advantages in a modern industry.
“We believe a strong brand is one of the most powerful and sustainable advantages a company can have, but one that is often ignored by the financial markets,” Credit Suisse, director, Omar Saad said.
The survey found that those companies listed on the S&P 500 which spent at least 2% of sales on marketing, outperformed the index by more than 400 basis points annually since 1997, the survey noted.
The other brands which figure in the list include online shopping firm Amazon, luxury lifestyle company Polo Ralph Lauren, US apparel firm Under Armour.
”We believe brand stocks will continue to outperform the market and our proprietary framework analyses brand lifecycles to determine how and when to invest in brands for optimal returns,“ Saad said.
Brand power is strongest in industries where there is close proximity to the end-user. There is ample room for product differentiation among competitors and reputation plays an important role in consumers’ purchasing decisions, the report added.
The report said that tough times in the financial market provides opportunity to best brands to solidify their presence, as weaker competitors scale back and new entrants delay risky plans.
“Investing in companies that are transforming from niche player into a powerful brand that can be proliferated across new markets and categories offers investors extremely attractive returns,” Credit Suisse said.
The list of ‘Great Brands of Tomorrow’ also include the likes of China’s Tsingtao Brewery, China Merchants Bank, South Africa’s Capitec Bank.