The Brands We Love... And Love to Hate

Marketing has made giant strides in the past half-century. It started with a manufacturing concept, advanced to a product and sales concept and from there to a modern marketing concept, leading in the past few years to a brand name concept. Today, when we say a company is successful, we usually mean the brand name is succeeding. Brands are judged by their market force and value.

Marketing researcher David Aaker claims a close relationship exists between a brand’s value and the extent of the brand name’s recognition, how its quality is perceived and other assets, such as the associations it arouses. A high brand value grants a cache of competitive advantages: strong awareness and loyalty, higher commercial leverage in trading with distributors and retailers, premium price and protection from fierce price wars.

In this project, we tried to explore the marketing force and power of brand names in selected categories, aimed at creating a rating for leading brands in Israel. The CA Marketing Research Institute, headed by Noam Raz and Merav Shapira, prepared for “Globes” a research model, using three major parameters, which constitute a brand’s marketing equity:

1. Brand awareness – “top of mind”. An essential condition for using a brand is familiarity with it. People tend to use brands they know. This criterion reflects brand awareness and in certain instances long term experience with it. The survey examines the awareness level through the question: “Out of all the companies in “X” category, which company are you most familiar with?”

2. Quality perception – defining the best brand in the model is attained by a list of image criteria, mainly in the field of quality. The survey examined the subject through the question: “Which is the best company in this category?”

3. Preference (hypothetical market share) – the question relates to the consumer’s preference in future purchases of the brand in each of the categories. Ultimately, people survey the brands they are familiar with, configuring quality, the level of enthusiasm they feel for the product and the price, and then decide which brand is best for them. The hypothetical market share in the model incorporates a list of cost-benefit questions usually appearing in a brand’s equity.

The rating weighs the brand’s results in the three categories equally, on a scale of 1-100. A comparison of brands’ power can be made in various categories, since the criteria determining the marketing power are equally applicable throughout the marketing world.

Ten categories were examined in the survey, in two parts. In the first survey, banks, cellular communications, family cars, Internet providers and fashion were examined. In the second part, international calls, dairy products, savory snacks, food marketing chains and fast-food chains were examined. Next, we tried to examine which brands are the absolute leaders, by according a cross-category rating.

The survey was conducted in September 2000, in a country-wide telephone sample of 534 interviewees from a representative socio-demographic background. The margin of error was approximately 4.5%.

One leader per category

One obvious market leader emerged in each of the categories examined in the survey. In banking – Bank Hapoalim; cellular communications – Cellcom; family car – Mazda; fashion – Castro; Internet providers – NetVision.

Generally, a correlation existed between the best-known brands and the perception of the best brands and the hypothetical market share. However, there were some exceptions to the rule. In the case of Castro, Subaru and the First International Bank, there was a gap between the best and most well-known brand and the hypothetical market share. Consumers will not always buy the brand he regards as the best, mainly due to price considerations.

According to Marketing Information (CI) senior researcher Rafi Strassberg, the awareness criterion (the most widely known brand) is normally congruent to the existing market share. In other words, a certain brand’s customers generally regard the brand as the best known in the category. The brand’s market share therefore greatly affects its power.

Bank brands

In the banking field, there is a clear distinction between the two major banks, Bank Hapoalim and Bank Leumi, and the rest. Leading brand Bank Hapoalim led in all three questions examined. The survey shows that Bank Hapoalim is the leader mainly among the 50+ age bracket, with lower than average incomes.

Rating second was Bank Leumi, the leader mainly in the 30-49 age bracket, with above average income. Bank Hapoalim and Bank Leumi rated equally in the younger, 18-39 age bracket.

Discount Bank ranked third and was rated more strongly among men than among women. In contrast to other categories, the banking category was characterized by a high level of familiarity and information, with the lowest rate of “don’t know” answers.

Cellular brands

In the cellular communications market, which has a 70% penetration rate, Cellcom was the outstanding leader. It was voted the strongest mainly in the 18-29 age bracket. Despite the major marketing and advertising efforts of Pele-Phone this year, it is not succeeding in narrowing the gap with Cellcom. With an advertising budget of $20 million, aimed at a strategy for increasing its market share (Pele-Phone added 270,000 new subscribers this year), and the building of a new brand image from an upper-end brand to one that relates to everyone (“always connected” the campaign stated), Pele-Phone is still attracting its historical segment of 30+ males, with relatively high incomes.

Orange is still perceived as an expensive brand, despite the lowering of prices and the attempt to position itself as having “the cheapest price per minute in Israel”. Cellcom manages to maintain the image of low prices. It is important to emphasize that Cellcom’s large market share works in its favor vis-a-vis its leadership role. Consumers tend to recall the brand they use and credit it with quality.

A prominent sign of the haziness in assessing quality among the three brands is the high rate of response of “don’t know” to the question of which brand has the highest quality. At the same time, close to 75% answered the question with certainty, and most responded that Cellcom is the best quality brand name.

Survey results show that the aggressive campaigns by competitors Pele-Phone and Orange against Cellcom have not succeeded in damaging its lead.

Fashion brands

Out of Israel’s five leading fashion brands, four are chains, three of which are local brands. Castro is the leading fashion brand in Israel, rating in top place mainly among women in the 23-59 age bracket, with average income. Zara stands out mainly among younger women in the 18-22 age bracket, with average and above average income. Levi’s stands out mainly among men with average and above average income. Golf stands out mainly among men. In this category, characterized by many fashion brands, scores of additional names were mentioned in addition to the five leading brands. This finding, and the fact that many (27%) of respondents did not know of a leading brand, shows that the leading brands do not control the market. This also indicates an absence of brand awareness. While brands in consumer goods, cellular communications and banking appeal to the general public, brands in the fashion world usually pitch themselves to a focused audience.

Family car

The decision to examine the leading brand of family car stems from the attempt to outline a category with maximal familiarity with brands. This category is characterized by many competing brand names. Leading the category, Mazda particularly stands out among high income earners. It should be noted that Mazda has had the greatest number of car sales in Israel for three years.

Toyota, in second place, stands out more among men in the 23-39 age bracket. Mitsubishi, in third place, stands out in the 23-39 age bracket, with average and below average income, while Subaru ranked higher among the 50+ age bracket. Subaru is the exception in this category, since there is a clear distinction between the high rating in familiarity, compared to the relatively low hypothetical market share and quality perception.

Prestigious brands Volvo and Mercedes did not take their place in the rating, since it addressed the perception of a family car, as opposed to “prestigious car”.

Internet Service Providers

In the past two years, there has been a consistent rise in the number of people connecting to the Internet, and it is now estimated to have penetrated into 36% of households. This category is characterized by a particularly high rate (over 50%) of respondents unable to relate to it at all.

NetVision leads this category, particularly in perceived quality and preference (hypothetical market share). Internet Gold is well known but weaker on enthusiasm and preference. This apparently stems from an image problem. Until recently, NetVision was the most prominently advertised. NetvVision’s advantage over Internet Gold was particularly noticeable in the 40-59 age bracket.

Bezeq International’s Internet investments in an image campaign led to it being the sole brand managing a presence alongside the two leaders, although it does not yet constitute an equal competitor. The reason could be the fact that Bezeq International is identified with its parent company Bezeq’s other spheres. Barak and Surfree were found to be very weak in this area, receiving low rating in the force and power parameter.

Part II

In the second part of the survey, brand leaders in international calls, dairy products, savory snacks, food marketing chains and fast-food chains were examined. We will provide the figures summing up the findings in these categories next week, together with an overall cross-category rating of the leading brands in Israel.

Published by Israel's Business Arena on 28 September, 2000