Nielsen Winning Brands MF: Davids outperform Goliaths

Smaller brands gaining at the cost of larger brands – this is the story unveiled by the Nielsen Winning Brands Mutual Fund study. SBI Mutual Fund leads in Nielsen’s study, which tracks the brand performance of various mutual fund houses. The Nielsen Winning Brands Mutual Fund study, in its third year, polled 1,662 Indian consumers via face-to-face interviews across 10 cities in India.

As the findings reveal, Reliance Mutual Fund has emerged runner up with the fastest growth, almost doubling its index score from the previous year, and jumping from fifth to second position in 2007. Last year’s runner up, ICICI Prudential, has slipped to number three, albeit very close behind Reliance.

“The larger brands have shown a dip in their equity strength, while share of mind of some of the smaller brands has actually gone up at the expense of the bigger brands – clearly investors are contemplating more brand options than before,” says Nipa Parekh of Financial Services Research, The Nielsen Company, India.

On average, consumer awareness of the investment related brands went up from 12.9 brands last year to 18.5 brands in 2007, showing a significant increase. However, the average number of brands in a consumer’s consideration set went up slightly from 2.76 to 3.4, which implies a strong need to build brand consideration. This is even more important as Indian consumers are increasingly investing their discretionary money in stocks and mutual funds, according to a global consumer confidence and opinion survey conducted at the end of April 2007.

“Sustaining a strong media presence is a prerequisite for mutual funds, given the plethora of brands the consumer is aware of. However, the task does not end there – it is important to be a part of the consumers’ limited but slowly increasing consideration set by focusing on ground level activities that can give consumers more knowledge and reasons to choose the brand,” says Parekh.

India’s mutual fund industry is surging ahead, as a growing number of retail investors, lapping up the fund offerings, are finding it a safe and relatively high-return investment vehicle. Tax benefits, however, seem to be the most important trigger for investing in a mutual fund, a probable entry point for many.

The key drivers for brand equity continue to be awareness followed by consideration in the category in general. Quality of awareness also appears to be the single largest driver. Having considered a brand, the last mile to securing the sale is likely to depend on the confidence of the agent, based on basic product characteristics of the mutual fund such as returns and services, and while the trust and reputation of a brand should not be overlooked, it appears to be more of a hygiene factor.