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Aeroflot is Russia’s Most Powerful Brand

April 21, 2017 Business News No Comments Email Email
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Every year, leading valuation and strategy consultancy Brand Finance values the brands of thousands of the world’s biggest companies. Russia’s 50 most valuable brands are featured in the Brand Finance Russia 50.http://www.tourismlegal.com.au/

As part of its overall assessment of brand value, Brand Finance looks at two key factors. The first is revenues (both historic and forecast), but just as important is an assessment of the strength or ‘power’ of each brand. Brand Finance looks at factors such as marketing investment, familiarity, preference, sustainability and margins. By stripping out the effect of revenues, it is possible to get an even clearer picture of the value a brand is bringing to the overall business and the effectiveness of its marketing team.

On this basis, Aeroflot is Russia’s most powerful brand, with a Brand Strength Index score of 88.8. This also makes Aeroflot the world’s most powerful airline brand. Aeroflot’s brand strength stems in part from dominance of its domestic market. Aeroflot is the only Russian carrier to hold Four Star Airline status from Skytrax, the authority on airline service quality. Brand Strength Index scores for metrics such as familiarity, consideration, preference and loyalty are formidable, both when compared against other Russian airlines and against foreign ones within their home markets. This is all the more impressive given that there are no air routes for which Aeroflot has exclusive access, demonstrating that its strength is underpinned by competitive advantage rather than monopoly.

Investment in the brand, which lays the foundations for future resilience and growth, is another key component of brand strength in which Aeroflot excels. It has the youngest fleet of any major airline and is investing heavily in marketing promotion, particularly in Asia. This is reinforced by its sponsorship of Manchester United (the world’s most valuable football brand), which helps Aeroflot reach a vast audience across East Asia in particular. The approach is clearly paying off. Aeroflot was last week named China’s favourite international airline by the Civil Aviation Administration of China at the 2017 Flyer Awards. Even more impressively, in the inaugural TripAdvisor Best Airlines list (based on customer reviews from around the world) Aeroflot was judged to have the best business class experience of any airline and named the best major airline in Europe.

Sberbank is Russia’s most valuable brand. It is Europe’s 6th most valuable banking brand and the 24th globally. Strengths include its credit portfolio, carefully managed risk but more importantly its ambitious and innovative approach. Sberbank is determined to be a young, innovative, technology-based bank, and is building tech platforms to sell internationally. In 2016 it announced plans to build a ‘national ecommerce system’ to be used in both B2C and B2B contexts, using its vast resources and infrastructure. A deal with Chinese ecommerce giant Alibaba has recently been signed to help make the plan a reality.

Brand value is up 23% to 569 billion RUB. On the brand’s performance, Sberbank’s Alexey Zabrodin commented, “Sberbank is rapidly transforming into one of the world’s largest ecosystems. Our main priority is to make people’s lives better by inspiring them to fulfill their aspirations and dreams. This has been a key driver behind our success”.

Gazprom, Lukoil and Rosneft occupy 2nd, 3rd and 4th places respectively, highlighting Russia’s strength in oil and gas. Lower Oil & Gas prices in the early part of 2016, in addition to the impact of sanctions, has suppressed the brand value growth of many of Russia’s oil majors this year. Though macroeconomic conditions such as these will always determine the overall direction of business and brand value performance for commodity-led firms, the approach they take to the management of their brand will determine the extent of the impact. The impact on Gazprom for example has been less pronounced than it might have been thanks in part to its brand building activities.

For a primarily upstream (ie production focused) brand, Gazprom invests significant amounts in marketing. In particular it has cultivated a vast array of sponsorships, most notably in football, with partners including Shalke 04, Zenit St Petersburg, the UEFA Champions League and next year’s FIFA World Cup, to be held on its home turf. Such brand building creates positive brand associations with a wide range of stakeholders which includes not just stakeholders but staff and potential employees, with local communities, with strategic partners and even government authorities.

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