According to a recent Inter Brand survey, the value of the top 100 global brands equals the gross national income of 63 nations. The startling factor is that one--third of global wealth is intangible; it can't be seen or touched. it is important to take a closer look as to how these brands multiply wealth and how the same branding genius can be applied to countries for creating sustainable wealth.
A brand represents sustainable wealth. It's because of the loyalty of the consumer base, the ready acceptance of new products launched under the same name, and the relative cheapness of retaining customers compared to the cost of finding new ones. It's a revealing fact that brand owners spend less on brand advertising. The additional profit margin commanded by the business can be invested in R&D which in turn helps to innovate or renovate the profile of brands. This has a profound impact on the whole; they employ more, buy more raw materials, spend more on infrastructure, their retailers share bigger profits and thereby generate more employment, enhance their service standards and more importantly, all these companies pay more tax. Gradually, wealth spreads from successful brands, merges with supporting sectors, stimulating the economy of the city, region and ultimately the country.
poor countries remain poor because they keep selling unbranded goods to richer countries at lower margins. The richer countries which buy raw materials from poor countries, just tinker around with packing, branding and then retailing them to the end user at higher prices. In this whole process the poor countries just end up depleting their rich resources keeping their foreign revenues at a break--even or a lower level. Their margins get squeezed up when they have to compete with themselves to fetch orders from the richer countries. So the sad part of being unbranded suppliers is that even tighter margins for poor countries facilitate the flow of wealth to the pockets of rich nations. In the end, the cliché comes truethe rich becomes richer and the poor becomes poorer. |
