Branding Wars - UK: Industry Report

Branding Wars - UK

Product Type: Market Research Report
Published by: Mintel International Group Ltd.
Published: May 2008
Product Code: R560-3278

Description

Few brands attract as much criticism as those in the financial services industry. According to Mintel’s research, financial services brands are the most likely to be seen as ‘only caring about profits’ - one of the few areas in which they dominate all brand rankings. There is a perception that they care more about their shareholders than they do about their customers - something that may be true for all companies, but which some are better at hiding than others.

Branding is rapidly moving up the agenda in the financial services industry, though. Shareholders are increasingly aware of the value of intangible assets - and a strong brand can be a huge asset to a company. In the financial services world, where markets such as credit cards and motor insurance struggle to minimise the impact of price-driven switchers, branding can make the difference between a loyal customer and a lost customer. In essence, strong branding gives a sustainable competitive advantage, allowing firms to sidestep the price-driven skirmishes that do so much to drive down margins.

This report draws on the extensive brand database built up by Mintel over the course of 2007, highlighting those brands that have performed particularly well, and those which are in real danger of alienating their customers. It also looks at the industry on a sector, rather than brand basis - are there markets in which customers feel more affection for their financial services provider, or are they all tainted by the same profit-driven image?

Brand Elements methodology:

Mintel’s Brand Elements research provides an insightful and competitive look at brand dynamics in the financial services marketplace. Mintel assesses both rational and emotional characteristics of brand performance and consumer impact. It also comments on selected brands that best illustrate the scope of the market.

Mintel has drawn insight from January-December 2007 over 90 categories, of which 15 were financial, and collected data on 900 brand aspects, of which about 230 were financial.

The independent survey is run monthly by category in surveys of 2,000 adults aged 16+, conducted on Mintel’s behalf by Ciao online, during 2007. Mintel ran a GB Internet representative sample, cumulatively totalling 80,000 respondents in 90 categories, of which 30,000 respondents related to financial services, collected in 15 categories.

In 2007, all categories comprised of ten brands each (sample of 2,000 adults aged 16+ per survey).

As a result, Mintel collected brand performance data for around 71 financial services brands, in multiple categories, such as Halifax ubiquitously in nine.

The survey examined seven main elements of brand evaluation (usage, consideration, satisfaction, commitment, loyalty, engagement and image), and Mintel analyses brands in the context of their own market, in category, which is where consumers engage with them. (In 2008, Mintel has added momentum, a quality index and brand engagement, as well as motivation in some categories).

Following an overview of adspend in 2007, this report re-examines the Brand Elements data gathered throughout the course of the year, placing it in the context of the industries covered by Mintel (FMCG and retail, for example). Breaking it down further, the headline data from some of the key financial services segments are compared, giving a top-level indication of how consumers view brands across a number of different categories.

Inevitably, given the concentrated nature of many of the financial services sectors, a number of brands have featured in a wide variety of Brand Elements studies. In this report, Mintel examines some of the key metrics for the most-frequently covered brands, highlighting markets in which they are strong, and those in which they need to improve their ratings.

Finally, the report highlights the key findings and recommendations of a selection of the main Brand Elements studies, providing an overview of the research to date.

Table of Contents

INTRODUCTION: Brand Elements methodology
MARKET IN BRIEF: Top on advertising…; …but lagging on branding; Struggling to stand apart from the crowd; Trusting the mortgage - but for how long?; Paying the price of churn; A handful of brands impress
ADVERTISING IN CONTEXT: Key Point; Advertising - or branding?; Finance tops the adspend charts…; …so what’s going wrong?; Where do the budgets go?; Investing in the journey
THE BRANDSCAPE - PUTTING FINANCIAL SERVICES INTO CONTEXT: Key Point Summary; Finance - trailing the FMCG leaders; Finance - high risk, high need for trust; FMCG history drives brand strength; Trust, differentiation low for financial services; Finance ‘star players’ few and far between
THE FINANCIAL OVERVIEW: Key Point Summary; ‘Bread and butter’ products lead on trust…; …with a mixture of underperformers lagging well behind; Mortgages - topping the brand strength charts; The rate tarts strike back…; …especially in the insurance markets; A shift in branding in the coming years?; How do loyalty and recommendation relate?; Satisfaction guaranteed?; Debt is a four-letter word
BRAND OVERVIEW - ABBEY: Key Point Summary; An explanation of the Brand Overview methodology; Mortgage heritage shines through…; …but recommendation levels are a cross-category problem; ISAs - time to build loyalty into the equation?
BRAND OVERVIEW - BARCLAYS: Key Point Summary; One of the industry giants - but still gaps to fill…; …and issues to address; Unfair criticism?; Time to live up to its promises
BRAND OVERVIEW - DIRECT LINE: Key Point Summary; The difference a decade makes; Not a premium product - or not yet, at least; Excellent satisfaction, strong affection - so why’s loyalty low?
BRAND OVERVIEW - HALIFAX: Key Point Summary; Halifax - still giving a little extra…; …but it doesn’t have everything its own way; Satisfaction + affection = loyalty
BRAND OVERVIEW - HSBC: Key Point Summary; Building a mortgage brand; Premium positioning on the high street; Scope to grow mortgage business…; …but it can’t afford to forget its current account customers
BRAND OVERVIEW - LLOYDS TSB: Key Point Summary; Lending credibility to the brand; Problems with word-of-mouth recommendation?; Bringing loyalty back to the loans market
BRAND OVERVIEW - NATIONWIDE: Key Point Summary; The best performer, regardless of category…; …and its customers show their regard; Exceeding expectations
BRAND OVERVIEW - NATWEST: Key Point Summary; Another way?; Word of mouth an issue?; Satisfaction guaranteed?
BRAND OVERVIEW - TESCO PERSONAL FINANCE: Key Point Summary; Taking on the finance specialists…; …while reflecting Tesco’s core strengths; Little chance of tainting the main brand
SECTOR REVIEW - RETAIL BANKING: SECTOR SUMMARY; BRAND SNAPSHOTS
SECTOR REVIEW - GENERAL INSURANCE: SECTOR SUMMARY; BRAND SNAPSHOTS
SECTOR REVIEW - CURRENT ACCOUNTS: SECTOR SUMMARY; BRAND SNAPSHOTS
SECTOR REVIEW - CREDIT CARDS: SECTOR SUMMARY; BRAND SNAPSHOTS
SECTOR REVIEW - PERSONAL LOANS: SECTOR SUMMARY; BRAND SNAPSHOTS
SECTOR REVIEW - HOME INSURANCE: SECTOR SUMMARY; BRAND SNAPSHOTS
SECTOR REVIEW - MOTOR INSURANCE: SECTOR SUMMARY; BRAND SNAPSHOTS
SECTOR REVIEW - ONLINE FINANCE: SECTOR SUMMARY; BRAND SNAPSHOTS
APPENDIX: RESEARCH METHODOLOGY

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