Monday, July 24, 2006

Cdn Banks Rule List of Top Brands

The Globe and Mail, Keith McArthur, 24 July 2006

Hewers of wood, drawers of water -- and bankers.

Interbrand's list of Canada's top 25 brands is dominated by the financial services industry. Starting with RBC in the No. 1 spot, there are five other banks and three mutual fund companies on the list.

But their brands represent a relatively small percentage of their parent companies' overall value -- which could suggest that these companies aren't doing enough to leverage their brands, according to the authors of the Interbrand study.

The study concludes that brands like Canadian Tire, Tim Hortons and Shoppers Drug Mart account for roughly one-third of their company's value. But at financial services companies, brands represent just 2 to 7 per cent of a company's market capitalization.

The big five banks, in particular, face the challenge of differentiating themselves against four entities of similar size with similar histories offering similar services, according to Jim Torrance, Royal Bank of Canada's director of brand strategy.

"The banking industry is a difficult one [in which] to really differentiate brand positioning," he said.

RBC is at an advantage, Mr. Torrance said, because the bank has been using the same brand positioning for decades. Its position as the most blue-suited of the banks also helps because it can be applied to both retail and corporate banking, he said.

Jeff Swystun, global director for Interbrand, says Canada's top three banking brands -- RBC, TD (No. 2 on the list of Canada's top brands) and Bank of Montreal (No. 7) -- have become much more sophisticated in their branding over the last five years.

Bank of Nova Scotia and Canadian Imperial Bank of Commerce, on the other hand, are singled out for doing a poor job of defining their brands.

The authors take Scotiabank (No. 9) to task for spending too much of its branding effort on owning the colour red.

"That is fine and definitely an aspect of branding but they are missing a compelling message and suffer from no ownable service differentiators," the authors write.

But Rick White, Scotiabank's vice-president of brand and marketing programs, said the bank's "You're Richer Than You Think" platform has "generated solid awareness with a very tangible value proposition for Canadians."

CIBC (No. 13) appears not to possess as much personality as other financial institutions on the list, according to Interbrand.

"RBC is first for you, TD makes you feel comfortable, Scotiabank is desperate in having you as a friend, while CIBC remains inarticulate," the study states. The bank declined to comment on Interbrand's assessment.

Jeff Swystun, global director for Interbrand, said it's not surprising that consumers say they can't tell the difference between the various banks. All are fighting for a similar space, making it easy for up-and-comers like ING and credit unions to quickly establish themselves as rebel brands.

"At the end of the day, there's enough choice in Canada, and that is evidenced in branding by them all saying the same thing. If there's ever a marketing argument for allowing consolidation in the banking industry, it's because there's such a lack of differentiation within that industry," he said.
Canada's Most Valuable Brand

• RBC: Key is trust, not roots
• Owner: Royal Bank of Canada
• Brand Custodian: Jim Torrance, director of brand strategy
• Brand value: $3.99-billion
• Rank by value: No. 1

• Brand philosophy: "We do see the brand as an important business-building asset. It helps to attract new clients to the bank; it helps set a positive expectation for our current clients. It is something that is an important factor in how our business performs."

• Interbrand's take: "RBC's broad but aligned product and service set has manifested itself in a message of trust that is the cornerstone of successful financial sector branding. This trust message has found itself in their recent communication of putting the customer first."

• Updating the brand: In 2001, Royal Bank changed its master brand to RBC Financial Group, playing down its Canadian roots in order to become a stronger brand outside Canada. The crown that had been visible in earlier versions of the logo also disappeared.

• On the dearth of global brands: "Canadian companies have tended to be less globally oriented . . ." Mr. Torrance says. "I think as a country, we're recognizing more the need to go outside our borders, and trade barriers are falling, and we're becoming more connected globally."
Value C$ (millions)
1RBC 3,989.6
2Toronto-Dominion Bank3,167.9
4Bell Canada2,914.9
5Shoppers Drug Mart 2,830.6
6Tim Hortons 1,878.2
7Bank of Montreal1,854.6
8Canadian Tire 1,634.2
14Rona 668.9
15Investors Group313.2
16National Bank of Canada298.5
17CI Investments 289.0
18Rogers 288.4
20Jean Coutu131.6
21Macs/ Couche-Tard 128.4
24Sobeys 79.6

Source: Interbrand