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The Power of Brand in Radical Times of Uncertainty

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In a world of radical uncertainty, Brand Equity provides a beacon.

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The Power of Brand in Radical Times of Uncertainty

  1. 1. POWER OF BRAND IN RADICAL TIMES OF UNCERTAINTY S e p t e m b e r 2 0 1 8 1
  2. 2. IN A WORLD OF RADICAL UNCERTAINTY, BRAND EQUITY PROVIDES A BEACON 2 Brands have mass, they have velocity and energy, but also inertia and fatigue Brand Equity has proven links to business success, pricing power, market-share, loyalty and even stock price A business can be measured by revenue, margins and growth, yet a brand only exists in the minds of consumers BAV uniquely and quantifiably captures the equity and power of brands in culture
  3. 3. B R A N D A S S E T ® V A L U A T O R ( B A V ® ) P R O V I D E S A Q U A N T I F I A B L E W I N D O W I N T O B R A N D S A N D C U L T U R E THE LARGEST AND LONGEST-RUNNING STUDY AND MODEL OF BRANDS GLOBALLY 3 52 C O U N T R I E S S U R V E Y E D $160MM I N V E S T E D 9B D A T A P O I N T S 25 Y E A R S O F L E A R N I N G 56,000 D I F F E R E N T B R A N D S 75 C O N S I S T E N T M E T R I C S S O M E O F O U R A C A D E M I C P A R T N E R S
  4. 4. O U R M O D E L I S C A T E G O R Y A G N O S T I C BAV® can uniquely look at a brand’s equity vs. its peers… 4
  5. 5. O U R M O D E L I S C A T E G O R Y A G N O S T I C Against the dynamics of the broader cultural “brandscape” 5
  6. 6. WE MEASURE BRANDS ON FOUR PILLARS OF BRAND EQUITY AND MOMENTUM 6 D I F F E R E N T I A T I O N R E L E V A N C E E S T E E M K N O W L E D G E Unique Meaning Appropriateness Regard Understanding Relates to margins, loyalty and cultural currency Relates to market penetration Relates to perception of quality and respect Relates to consumer experience B R A N D S T R E N G T H F u t u r e G r o w t h P o t e n t i a l B R A N D S T A T U R E C u r r e n t O p e r a t i n g V a l u e
  7. 7. PROVIDING A SNAPSHOT OF A BRAND’S HEALTH AND MOMENTUM BRANDSTRENGTH DIFFERENTIATION&RELEVANCE BRAND STATURE ESTEEM & KNOWLEDGE CURIOSITY COMMITMENT INDIFFERENCE FATIGUE DIF REL EST KNO DIF REL EST KNO 7 DIF REL EST KNO DIF REL EST KNO
  8. 8. BRAND = CRYSTAL BALL THE EQUITY OF BRAND TODAY IS PREDICTIVE OF ITS SUCCESS TOMORROW 8 BRANDSTRENGTH DIFFERENTIATION&RELEVANCE BRAND STATURE ESTEEM & KNOWLEDGE PREDICTIVE OF GROWTH: Brands sitting in this territory of the BAV PowerGrid grew 11% on usage, and 9% on top preference in the following year on average PREDICTIVE OF FATIQUE: Brands sitting in this territory of the BAV PowerGrid declined 1% on usage, and 3% on top preference in the following year on average DIF REL EST KNO DIF REL EST KNO DIF REL EST KNO DIF REL EST KNO
  9. 9. BRANDS HAVE INTANGIBLE VALUE 9 BAV demonstrates the power of brand in driving consumer advocacy, brand pricing power and business success * AS MEASURED BY BAV BRAND STRENGTH METRIC: BAV USA 2018 BRANDSCAPE STUDY BRAND EQUITY* I M P A C T O N T O P B R A N D P R E F E R E N C E D R I V E R O F B R A N D U S A G E I M P A C T O N C U S T O M E R A D V O C A C Y I N F L U E N C E O N B R A N D L O Y A L T Y I N F L U E N C E O N B R A N D C O N S I D E R A T I O N I M P A C T O N B R A N D P R I C I N G P O W E R THE POWER OF “BRAND” ACROSS THE MARKETPLACE 19% 22% 23% 11%25%12% D R I V E S E M O T I O N D R I V E S B E H A V I O R
  10. 10. A B R A N D ’ S E Q U I T Y H A S S I G N I F I C A N T A N D M E A S U R A B L E I N F L U E N C E O N M A R K E T S U C C E S S The compounded annual growth rate of BAV’s BEX Index outperforms the S&P 500 and the NASDAQ based on half-year returns of a hypothetical $10,000 investment. 10 $0.00 $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00 $30,000.00 $35,000.00 $40,000.00 $45,000.00 $50,000.00 Jun-02D ec-02 Jun-03D ec-03 Jun-04D ec-04 Jun-05D ec-05 Jun-06D ec-06 Jun-07D ec-07 Jun-08D ec-08 Jun-09D ec-09 Jun-10D ec-10 Jun-11D ec-11 Jun-12D ec-12 Jun-13D ec-13 Jun-14D ec-14 Jun-15D ec-15 Jun-16D ec-16 Jun-17D ec-17 S&P 500 NASDAQ BEX Top 50 Weighted Index CAGR: 2.44% CAGR: 3.15% CAGR: 4.66% BAV’s Brand Strength metric is an indicator of future performance and growth potential On average, publicly traded brands that show the largest increase in equity see a gaining stock prices, outpacing market Base: BrandAsset® Valuator USA All Adults Half Years, 2002-SH2017 *Dollar value based on half year returns of the BEX, NASDAQ and S&P 500 on a hypothetical $10,000 initial investment *BEX Index returns weighted by change in Brand Strength for each period
  11. 11. BAV CAPTURES THE DIRECTION AND VELOCITY OF A BRAND 11 New, Unfocused or Unknown Commodity or Eroded Mass Market 2001 2003 2005 2007 2008 2009 2005 2006 2008 2015 2009 2010 2016 CURIOSTY COMMITMENT Niche or Unrealized Potential Leadership 95% stock price decrease from 2005 to 2010 548% stock price increase from 2005 to 2010 Base: BAV US 2001–2016 All Adults BRANDSTRENGTH DIFFERENTIATION&RELEVANCE BRAND STATURE ESTEEM & KNOWLEDGE
  12. 12. P I L L A R P A T T E R N S T E L L A S T O R Y O F B R A N D M O M E N T U M , S T R E N G T H A N D S T A G N A N C Y In concert, all four pillars paint a holistic picture of brand challenges and opportunities 12 122% greater brand Preference 93% greater Advocacy Brand with higher Differentiation than Relevance: RELDIFRELDIF EST KNO Brand is better liked than known. DESIRE TO FIND OUT MORE KNOEST Brand is better known than liked. LOOKING FOR BETTER OPTIONS Brand has captured attention for its uniqueness. UNREALIZED POTENTIAL Price or convenience is the dominant reason to buy. COMMODITY BRAND than Commodity brands 72% greater Loyalty 30% greater Pricing Power Brand with higher Esteem than Knowledge are: than brands with less Esteem than Knowledge
  13. 13. I N A G R O W I N G D I G I T A L R E T A I L E C O N O M Y , “ B R A N D ” I S E V E N M O R E I M P O R T A N T T H A N I T I S I N T H E T R A D I T I O N A L R E T A I L S P A C E Across categories, brand equity has 16% greater impact on brand loyalty among online skewing shoppers than in-store shoppers 13 Behavioral Commitment—Brand I use regularly/Brand I use occasionally; BAV: USA 2017SH-2018FH; Online Shoppers, In store shoppers Online shoppers are 4.4 times more likely to recommend a compelling brand to a friend than an in-store shopper vs.
  14. 14. BAV PROVIDES A LENS TO HIGHLIGHT VALUE AND POTENTIAL, TO HELP GUIDE DECISIONS 14 MERGERS, ACQUISITIONS AND PORTFOLIO MANAGEMENT CHANGING CULTURAL VALUES EVOLVING CATEGORY LANDSCAPE & DYNAMICS CONSUMER ADVOCACY BRAND ORIGINS AND HERITAGE What is the relationship between the corporate brand and its sub-brands? What assets do each brand bring to a merger? How do shifting consumers values and attitudes impact the role of brands and their business performance? How are industries changing? Where is disruption happening? What is are the implications to my brand? How loyal is your target audience? Is there untapped potential among your advocates? Where do customer acquisition opportunities exist? How does a brand’s country of origin or cultural ties impact its value and perception among consumers? What impact does the CEO or Founder’s Personal Brand have on the company’s brand success? How closely associated is the leader to the brand? What is the power of celebrity association with a brand?
  15. 15. MERGERS, ACQUISITIONS AND PORTFOLIO MANAGEMENT What is the relationship between the corporate brand and its sub-brands? What assets do each brand bring to a merger? A diversified portfolio isn’t only important in investing. BAV provides an in-depth understanding of the equity and role of each brand within a portfolio. 15
  16. 16. UNDERSTANDING BRAND SYNERGIES AND ASSETS CAN HELP GUIDE EXPECTATIONS AND CLARIFY OBJECTIVES 16 0 20 40 60 80 100 DIFF REL EST KNO PercentileRank 0 20 40 60 80 100 DIF REL EST KNO PercentileRank 0 20 40 60 80 100 DIF REL EST KNO PercentileRank DRIVING INNOVATION INTO A CREDIBLE LEADER EXPANDING INTO A NEW TERRITORY BRINGING NEW RELEVANCE TO UNAPPROACHABLE INSURERS Base: BAV USA SH17–FH18, All Adults
  17. 17. I N V E S T I N G I N M O M E N T U M B R A N D S C A N D R I V E E N E R G Y F O R E S T A B L I S H E D L E A D E R S Larger conglomerates offer credibility and reach to their highly differentiated, but less known brand acquisitions 17 0 20 40 60 80 100 DIF REL EST KNO PercentileRank 0 20 40 60 80 100 DIF REL EST KNO PercentileRank 0 20 40 60 80 100 DIF REL EST KNO PercentileRank 0 20 40 60 80 100 DIF REL EST KNO PercentileRank 0 20 40 60 80 100 DIF REL EST KNO PercentileRank 0 20 40 60 80 100 DIF REL EST KNO PercentileRank PARENT BRAND SUB-BRAND BRANDSTRENGTH DIFFERENTIATION&RELEVANCE BRAND STATURE ESTEEM & KNOWLEDGE Base: BAV USA 2016, All Adults
  18. 18. S T R O N G C O R P O R A T E B R A N D S C A N E L E V A T E S U B - B R A N D S The mid-tier Hilton brands that adopted the ‘by Hilton’ identity, experienced growth in brand equity and advocacy 18 2013 2013 2013 BRANDSTRENGTH DIFFERENTIATION&RELEVANCE BRAND STATURE ESTEEM & KNOWLEDGE ALL ADULTS 2013 vs 2017 Base: BAV USA 2013-2017, All Adults
  19. 19. CHANGING CULTURAL VALUES How do shifting consumers values and attitudes impact the role of brands and their business performance? Brand must be interpreted against the changing dynamics of culture. Cultural shifts have clear business implications as consumers adjust their expectations. By measuring thousands of brands in the US each quarter, BAV can identify trends shaping the marketplace across categories. 19
  20. 20. among Millennials than Boomers with regard to Purpose IN AN ERA OF DECLINING BRAND TRUST, CONSUMER EXPECTATIONS ARE SHIFTING 20 Base: BAV USA All Adults FY 2001-2015, Q2 2018 Base: BAV USA 2014, 2017 FY; All Adults Usage defined as regularly use and occasionally use 2007 TODAY 19% since 2007 The impact Purpose on Differentiation has grown by 18% more impactful Esteem is 70% of Gen Z girls believe that their lives need to make A DIFFERENCE IN THE WORLD THE POWER OF PURPOSE ON BRAND EQUITY INCIDENCE OF HIGHLY TRUSTED BRANDS IN THE BRANDSCAPE 2001 2003 2005 2007 2009 2011 2013 2015 2016 Q2 2018 50% 40% 30% 20% 10% 0% %ofbrandswhoreceived over20onTRUSTWORTHY *Percent of brands with greater than 20% endorsement on Trustworthy attribute
  21. 21. CONSUMERS OFTEN CHOOSE ‘CLEAN’ BRANDS OVER ‘DIET’ BRANDS 21 CLEAN BRANDS: STAYING SIMPLE & POSITIVE DIET BRANDS: HIGHLIGHTING EVERYTHING THEY’RE NOT Aidells Amy`s Amy`s Organic Annie`s Homegrown BluePrintJuice Cheerios Chiquita Goya Horizon Organic Imagine Organic KashiKIND LÄRABAR Luna Bar Naked Juice Newman`s Own Newman`s Own Organics Noosa Odwalla Organic Valley Pacific Organic popchips Siggi`s Terra Chips Balance Bar Benefiber Crystal Light Diet Coke Diet Dr Pepper Diet Mountain Dew Diet Pepsi Ensure Fiber One Fiber One Yogurt Lean Cuisine NutraSweet Slim-Fast Sweet N Low Weight Watchers Weight Watchers Smart Ones BRANDSTRENGTH DIFFERENTIATION&RELEVANCE BRAND STATURE ESTEEM & KNOWLEDGE BRANDSTRENGTH DIFFERENTIATION&RELEVANCE BRAND STATURE ESTEEM & KNOWLEDGE Base: BAV USA 2017, All Adults Clean brands have seen a 54% increase in advocacy from 2010 to today, while Diet brands have seen a 65% decrease Curves Jenny Craig
  22. 22. EVOLVING CATEGORY LANDSCAPE AND DYNAMICS How are industries changing? Where is disruption happening? What is are the implications to my brand? The threat of new entrants from surprising places is greater than ever before, changing the competitive landscape for products that industry leaders once thought were safe, from mattress brands to toothbrushes. Informed brands can re-establish their role and power in an evolving landscape. Throughout our 25 years of measuring the impact of brands in culture, we have studied disruptors in every category and continue to learn how to drive radical growth for our clients. 22
  23. 23. THROUGH MEANINGFUL DIFFERENTIATION, BRANDS CAN BREAK AWAY FROM PEERS IN EVEN THE MOST COMMODITIZED CATEGORIES 23 RELEVANCE DIFFERENTIATION Home cleaning products average Sports shoes average Internet services average Supermarkets average Ice cream average Airlines average
  24. 24. WAVES OF CATEGORY DISRUPTION HAVE CHANGED HOW CONSUMERS PERCEIVE THE QSR LANDSCAPE TODAY Base: BAV, USA, All Adults 2017 (Based on Correspondence Analysis) The average fast casual disruption brand has 2x the differentiation of traditional QSRs Different Distinctive Unique Dynamic Innovative Leader Reliable High quality Authentic Carefree Cares about Customers Charming Daring Down to Earth Energetic Friendly Fun Gaining In Popularity Glamorous Good Value Helpful High Performance Independent Intelligent Kind ObligingOriginal Prestigious Progressive Simple Social Socially Responsible Straightforward Stylish Traditional Trendy Trustworthy Up To Date Upper Class Visionary Worth More Healthy TRADITIONAL QSR FAST CASUAL NEWER ALTERNATIVES/ ON DEMAND OPTIONS 24
  25. 25. CONSUMER ADVOCACY How loyal is your target audience? Is there untapped potential among your advocates? Where do customer acquisition opportunities exist? It’s not just how big a brand is today, it’s also about how deeply it connects with its audience. BAV measures a continuum of consumer usage and preference, in addition to advocacy, which can assess the commitment of your target audience and uncover customer conversion opportunities. 25
  26. 26. U N D E R S T A N D I N G C O N S U M E R C O M M I T M E N T F O R A B R A N D C A N I N C R E A S E I N S I G H T I N T O I T S F U T U R E P O T E N T I A L Despite competitive brand consideration, Cars.com shows weak commitment relative to peers, highlighting a vulnerability 26 Base: BAV, USA, 2016, All Adults 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0 10 20 30 40 Percent One I Prefer One of Several Emotional Commitment
  27. 27. W H I L E A S M A L L E R , B U T M O R E C O M M I T T E D A U D I E N C E O F F E R S H I D D E N V A L U E NASCAR may not have as many fans as the NFL, but its viewers skew more avid than peers 27 Base: BAV, USA, 2016, All Adults 0 0.2 0.4 0.6 0.8 1 1.2 0 10 20 30 40 50 60 Percent One I Prefer One of several Emotional Commitment
  28. 28. BRAND ORIGINS AND HERITAGE What impact does the CEO or Founder’s Personal Brand have on the company’s brand success? How closely associated is the leader to the brand? How does a brand’s country of origin or cultural ties impact its value and perception among consumers? Founders and CEOs vary in their connection to and impact on their brand, and measuring this relationship can help understand the implications of their actions in the event of a personal crisis. Alternatively, a human connection can be a building block to brand trust, and the CEO or country of origin can be one such connection point to the brand. BAV can analyze the perceptions of business leaders and countries in tandem with brands, enabling us to understand their influence and risk. 28
  29. 29. P E R C E P T U A L S I M I L A R I T Y B E T W E E N A C E O A N D I T S C O M P A N Y V A R I E S Mark Zuckerberg today is less similar to Facebook, protecting the Facebook brand image in light of the Cambridge Analytica scandal. 29 Similarity Uniqueness Base: BAV, USA, 2018, All Adults
  30. 30. C o u n t r i e s h a v e t h e i r o w n b ra n d e q u i t y, a n d t h e r e i s a n o p p o r t u n i t y f o r b ra n d s t o l e v e ra g e t h e i r c o u n t r y o f o r i g i n . B ra n d U S A i s a g l o b a l l e a d e r, a n d b ra n d s c a n t a k e a d va n t a g e o f t h e i r A m e r i c a n h e r i t a g e i n m a n y m a r k e t s a r o u n d t h e w o r l d . 30 UK Spain Colombia Brazil Thailand Italy China Mexico France Germany THE EQUITY OF BRAND USA AROUND THE WORLD BRANDSTRENGTH DIFFERENTIATION&RELEVANCE BRAND STATURE ESTEEM & KNOWLEDGE Base: BAV, Global, 2018, All Adults
  31. 31. WE SEE A CLEAR POSITIVE IMPACT OF “MADE IN GERMANY” ON PERCEPTIONS OF THE OPEL AUTO BRAND 31 Opel Austria Opel Belgium Opel France Opel Netherlands Opel Hungary Opel Italy Opel Poland Opel Spain Opel Turkey Opel UK R² = 0.758 0 10 20 30 40 50 60 70 80 90 100 40 50 60 70 80 90 100 OPELBRANDEQUTYBYMARKET OPEL ASSOCIATION WITH GERMAN TRAITS Brand Strength vs. Level’s of “German-ness*” by Market Germanic Traits = Leader, Prestigious, Dynamic, Best Brand, High Quality, Stylish, High Performance, Innovative, Visionary, Progressive, Intelligent, Up-to-Date WE SEE A CLEAR POSITIVE IMPACT OF ”GERMAN-NESS” ON THE EQUITY OF THE OPEL BRAND ACROSS EUROPE STRONGEST LINK TO GERMANY QUALITIES STRONG ASSOCIATION WITH “GERMANY” WEAK ASSOCIATION WITH “GERMANY” WEAKEST LINK TO GERMANY QUALITIES Base: BAV, Europe, 2018, All Adults
  32. 32. SOME OF THE WAYS WE HELP OUR CLIENTS 32 BRAND PARTNERSHIP & SPONSORSHIP ANALYSIS BRAND MONITORING BRAND POSITIONING & OPTIMIZATION PORTFOLIO ARCHITECTURE BRAND EQUITY AUDIT SHOPPING BEHAVIOR INSIGHTS SOCIAL EQUITY ANALYTICS DEALS & ACQUISITIONS EVALUATION LOVE HATE CULTURAL INSIGHTS & TRENDS CUSTOM RESEARCH AND TRACKING
  33. 33. Thank You! M i c h a e l S u s s m a n C E O , B A V G r o u p M i c h a e l . S u s s m a n @ b a v g r o u p . c o m 33

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