In International News / By Mick Chan / 10 February 2020 2:16 pm / 13 comments

Malaysia’s national oil and gas company has steadily risen through the ranks of oil and gas brands, rising from 10th place in 2015 to the top spot in 2020, according to brand valuation authority Brand Finance. Measured on the Brand Strength Index which is scored out of 100, this is judged on a brand’s performance on intangible measures relative to its competitors, according to Brand Finance.

Here, Petronas scored 86.3 on the BSI for 2020, an increase of 0.1 from its 86.2 score last year, maintaining its AAA rating. Petronas takes over the top spot from last year’s first-placed Gazprom of Russia, which dropped to third place this year with a BSI of 84.3. Ranked second for this year is Shell, which improved its ranking with a BSI of 85.9 this year over its 2019 BSI score of 80.7, and a rating upgrade from AAA- to AAA.

In fourth and fifth places respectively are Luk Oil and the PTT Group in the ranks of oil and gas brands, which effectively swapped places from their 2019 rankings. For 2020, Luk Oil scored a BSI of 83.8 compared to 2019’s score of 84.5, maintaining its AAA- rating, while PTT Group scored a BSI of 83.5 compared to last year’s score of 84.8, resulting in a rating drop from AAA to AAA-.

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Each brand is assigned a BSI score out of 100, which is fed into the brand value calculation. Based on this score, the brand is assigned a rating, up to AAA+, in a format similar to a credit rating, Brand Finance says. Three factors are key brand strength measures in forming the BSI score.

The first is marketing investment; a brand that has high marketing investment but low stakeholder equity may indicate that it is on the path to growth. Here, high investments are likely to lead to future performance in stakeholder equity, which in turn would lead to improved business performance in the future. The report however notes that high marketing investment with little gain in Stakeholder Equity implies that the brand is unable to shape customer preference.

The next factor, stakeholder equity, is typically found to be proportional to business performance; higher stakeholder equity is likely followed by improved business performance. However, poor business performance persists even with high stakeholder equity suggests that a brand is relatively inefficient in transferring stakeholder sentiment into a volume or price premium, the report says.

Third of the three factors is business performance. If a brand has strong business performance but scores poorly in stakeholder equity, this implies that its ability to drive value will diminish, according to the report. Conversely, if a brand manages to sustain its higher outputs, it shows that the brand is ‘particularly efficient at creating value from sentiment’ compared to its competitors, said the Brand Finance report.