The Brands We Love... To Love - Part 2

Tnuva is the leading brand in Israel today. The other leading Israeli brands are: Cellcom, Osem, Coca Cola, and Bezeq International – four local brands, one of which is only six years old, and one foreign brand, recognized in international ratings as the world’s leading brand. The rating of leading brands in Israel is based on a survey conducted exclusively for “Globes” by the Marketing Information (CI) research institute. The survey examined brand awareness, quality perception and brand preference (hypothetical market share) in eleven marketing categories.

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Part One of the survey, published last week, covered cellular communications, banking, family cars, fashion and Internet providers. Published here for the first time is the overall cross-category rating and ratings in the international calls, food and fast-food chain, dairy products, dry food and soft drinks categories.

Tnuva’s tremendous lead over other top brands reflects its massive presence for decades, with a large range of products to which customers are exposed in their daily experience. However, this is not all. Tnuva’s unequivocal lead in the cross-rating shows it has come a long way since its image plunged to the depths following the silicon milk episode and its resurrection through a series of business and marketing moves, which included some breakthroughs.

Ranking second was Osem, and Cellcom came a close third (44.16 and 43.9 points respectively). While Osem enjoys a veteran familiarity, similar to Tnuva, Cellcom came to life only six years ago and has steadily soared, overturning its image since the embarrassing system crash shortly after it went on the market. One of the most interesting findings is that Cellcom’s hypothetical market share (customer preference) is higher than the brand’s quality perception. On the other hand, Osem enjoys extremely high awareness, yet relatively low hypothetical market share, indicating relatively low loyalty for the brand’s familiarity.

The leading global brand and one of the longest-standing international brands in Israel, Coca Cola, which bravely withstood years of Arab boycotting, takes an honorable place in the rating. At the same time, it is interesting to note that a gap exists between the high familiarity and the quality perception and brand preference, which is increasingly on the decline. Perhaps the Israeli consumer does not believe he is required to buy the brand he believes is the best soft drink.

Bezeq International, in the top five, relies on familiarity with the Bezeq brand name, which had a monopoly in international calls until three years ago. The company has since lost a considerable market share in a short time span, but is still regarded as the outstanding brand in the category in which availability and habit are extremely strong. The unprecedented investment in advertising the brand also contributed to its standing.

The biggest surprise in the survey came from Burger Ranch, a veteran local brand with a relatively limited budget, but a country-wide high spread out, which has managed to beat the global brand McDonald’s in quality perception and preference despite its heavy investments in Israel. Third competitor Burger King did not appear in the leading twenty brands.

Dairy products

There are two leading players in the dairy category, Tnuva and Strauss. Yotvata, owned by Strauss, led in terms of awareness and brand preference, and Tara, the third player in the market, suffers from a weak brand. Dairy dessert brands were named the most by the 18-29 age bracket. In response to the question “Which dairy products are you most familiar with?” Strauss’s Danone, Tnuva’s milk, Milky and Dani were the most frequently mentioned.

Tnuva led in the category of leading brand power, stemming less from the brand than the corporate name: out of an overall 57 points, two-thirds came from the company’s name rather than the brand name. In contrast, the opposite was true for Strauss. Less than half the brand’s power stemmed from the company’s name and was mostly based on specific brand names, headed by Danone yoghurt.

In a population segment by income, Tnuva was particularly powerful among low income earners, while Strauss, on the other hand, stood out among high income earners. This could be due to the fact that Tnuva still operates to a large extent with basic, generic products in addition to building premium brands, whereas Strauss operates solely in brands.

The change in image perception the survey showed, in which Tnuva swapped places with Strauss, should be noted. Strauss for years was perceived as the image leader, mostly thanks to investments in brands and in the past two years the company switched to marketing mainly based on “hard sale” advertising. Most of Strauss’s advertising was aimed at supporting Danone, which is identified as a separate brand, and Ahla ready-made salads, not associated with the corporate name.

Soft drinks

Coca Cola unsurprisingly leads the soft drink category by leaps and bounds, in accordance with its leading global position. Coca Cola is the leader particularly in the 18-29 year bracket.

No distinction was made in the survey between the various types of soft drinks and the response therefore includes fizzy drinks, cordials, juices and water. Prigat scored high points, while Eden Springs water scored higher among women than among men.

Pepsi Cola, ranking 35th in the global Interbrand rating of leading brands, placed 9th in Israel in this category. This shows the brand is very weak not only in sales and market share terms (estimated at 7%), but also in terms of preference and quality perception. It is interesting that RC Cola received a lower score than Pepsi in terms of quality, yet beat Pepsi in awareness and preference (hypothetical market share).

Adding up all of the Central Bottling Company (Coca Cola Israel) drinks with high awareness (Coca Cola, Fanta, Sprite, Prigat and Neviot) the score reaches 65. The aggregate score for Jaf-Ora-Tabori brands (Spring, RC Cola, Tapuzina, Mitz Paz, Ein Gedi) is 11, while the aggregate score for Tempo drinks (Pepsi, Jump, Ice-T, Tempo) is only 5.

It should be noted that the new generation brand drinks MIX (Central Bottling Company) and Snapple (Jaf-Ora-Tabori) were not mentioned at all, despite the heavy investments in advertising in the past year.

Supermarket Chains

Many supermarket chains exist in Israel, operating as sub-brands for retail groups: Co-op Blue Square, SuperSol and Co-op Zafon Hypershuk, which share most of the market between them. Co-op Blue Square’s Super Center leads by a small margin, mostly thanks to the younger population and former Soviet Union immigrants. The Co-op Blue Square and SuperSol brands, the two oldest, were prominent especially in the 50+ age bracket.

SuperSol’s sub-brand Hyperkol was particularly prominent in the average income segment. It should be noted that in this category the differences between the five leading brands were marginal.

It is interesting that the Hyperkol brand, positioned in the retail market as having relatively high quality, received mediocre rating, which shows that the public tends to rate discount outlets higher. In this category, importance is attached to location – the public tends to prefer a chain with branches close to their homes.

The Greenberg brand, which disappeared following the merger with Co-op Zafon Hyopershuk, and adopted the Club-Market brand name in all of the merged chain’s branches, still enjoys slight awareness and preference. At the same time, Club-Market is a powerful marketing brand, justifying its name under the merged chain.

Fast-food chains

The well-established Israeli brand Burger Ranch leads the fast-food category in Israel. With a slight-to-clear advantage, it beat McDonald’s in all parameters: awareness, quality perception and hypothetical market share. McDonald’s ranks 9th in the global Interbrand rating.

The older the population, the less the involvement in this category: 94% of the 18-22 age bracket were able to cite fast-food chains, compared with only 40% in the over 60 age bracket. This means that fast-food is affected by age and is more common among youngsters. It is also influenced by gender: men tend to be more involved in the fast-food field than women.

Hamburger chains were more popular than pizza chains. Generally, hamburger chains were preferred by high-income earners. It should also be noted that MacDonald’s was the sole chain to score a higher preference among high-income earners.

Interestingly, the Burger King brand was weak, making it the exception in the hamburger category. It scored slightly less than Pizza Hut (Burger King ranks 61st in the global Interbrand rating). Domino’s Pizza, ranked below Burger King, scored less than Pizza Hut.

It was reasonable to assume that the immigrant population, less used to fast-food consumption, would be less involved in this category but the survey found that their familiarity with the brand names was similar to that of the old-timers.

Prepared/Dried Foods

Osem leads in the dry foods category, including snacks and candies. Osem has a much more powerful brand in terms of familiarity, quality perception and hypothetical market share, reflecting a leading company with a range of products and marketing activity which built up the brand name over a long time. Osem scored particularly high among women, an anticipated finding, since the company is more dominant in cooking products, such as pasta and soups, than for example Elite, which is identified more with coffee and candies. Elite is relatively strong among the immigrant population with average income. Telma and Vita fared poorly in all this category’s parameters.

International Calls

Almost 50% of the respondents declared that they make international calls on a basis of some kind. Due to the widespread advertising in this sub-category, awareness is ultimately very high. Only 18% did not cite a familiar brand.

Since the product is a commodity, competition is characterized by a strong price strategy, alongside brand-building advertising campaigns. Since there is no difference in the products in this category, the findings show that great importance is attached to being the first, the size of the advertising campaign and the extent of enthusiasm for the advertising content. All these combined explain the great gap between the leader, Bezeq International, and the new players. In contrast, the gap between Golden Lines and Barak is marginal. These two brands have similar standing, and in fact ranked one after the other (13th and 14th respectively).

Golden Lines scored higher mainly among the average income and above earners. In general, men were more involved than women in this category.

Notes

The survey was conducted in two parts in a country-wide sample of 534 respondents representing the adult population. The survey method was based on examining the leading brand in the category in which it operates. The table summary of cross-category leading brands was based on the relevant lead of the brands in their own categories.

It is important to note that despite the fact that an attempt was made for the first time to survey the leading brands in Israel comprehensively, only eleven categories were chosen, based on the level of advertising invested. We were obliged at this stage to forego examination of additional categories, such as non-food chains, cosmetics, computers and electronic products, and these will be surveyed at a later date.

The sample error margin is 4.5%, meaning that a finding of a 4.5% gap between brands shows very little difference among the general population.

Published by Israel's Business Arena on 4 October, 2000