2012 brand z top100 report

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2012 brand z top100 report

  1. 1. ReadersDigestIssue01ReadersDigestIssue02ReadersDigestIssue03ReadersDigestIssue04ReadersDigestIssue05Top100MostValuableGlobalBrands2011Top100MostValuableGlobalBrands2010Top100MostValuableGlobalBrands2009Top100MostValuableGlobalBrands2008Top100MostValuableGlobalBrands2007Top100MostValuableGlobalBrands2006Top100MostValuableGlobalBrands2005Top100MostValuableGlobalBrands2004Top100MostValuableGlobalBrands2003Top100MostValuableGlobalBrands2002Top100MostValuableGlobalBrands2001Top100MostValuableGlobalBrands2000Top100MostValuableGlobalBrands1999Top100MostValuableGlobalBrands1998Valuation and Methodology byBrands pursuerelevancein digitalCreative strategiesgenerate addedimpact and buzzFast growingmarketsbeckonBrands rise inBRICS andelsewhereBrandcontributionprotects valueIt differentiatesin a challengingglobal economy
  2. 2. 2BrandZ™ Top 100 Most ValuableGlobal Brands 2012Welcome
  3. 3. IntroductionWelcome3Seven-year Itch?We have been monitoring the value of the great brands around the globe for a fullseven years now. But this year, we saw a first—the value of the world’s best brandsbarely inched up! In this edition of the BrandZ™ Top 100 Most Valuable GlobalBrands report, you’ll see that the aggregate value of the world’s most powerful brandsgrew a mere 0.4%. This compares to 17% growth last year and 4% growth even on theheels of 2009’s Great Recession.So what gives? Is the era of brand power coming to an end? Hardly. There weresome spectacular growth stories in 2011. By the time this report is off the presses, ourfastest growing brand, Facebook will have completed its IPO and likely our valuationwill need to be adjusted upward. We expect a stratospheric valuation as individualsand institutions clamour to own a little piece of the social media titan. Luxury goodswith the likes of Hermès and Rolex saw spectacular double digit growth in spiteof anaemic market conditions. And our rankings celebrate a number of “comebackkids,” including Starbucks and Home Depot, who surged forward after regainingtheir footing. Exciting new brands emerged on the scene, including our first Africanbrand, the teleco giant MTN.Emerging markets—a term that feels increasingly inaccurate and clichéd—remaineda cause for enthusiasm, but also made us pause and think about where growth willcome from when these red-hot markets cool. 2011 saw a possible harbinger of thingsto come, as softer stock markets in China and Brazil resulted in lower growth ofenterprise value. In spite of this, our sentiment is that brands become even moreimportant in periods of low growth. Competition will inevitably heat up as companiesseek share growth in lieu of overall market growth. The great thing about powerfulbrands is the ability to play defence and offence. In tough times, a powerful brandprotects us from competitive incursions and in good times, it provides a meaningfulplatform on which to grow.This year, we saw the growing importance of meaning. For years we’ve known thatconsumers seek more from brands than just functional benefits. They’ve long formedemotional bonds with the brands they choose. But increasingly, we’re seeing thoseconnections reserved for brands that consumers can be proud to call their “friends”—brands with ideals and those that operate to a higher moral and social standard. It’sat the heart of brand trust and even brand love. Those who betray this trust willinevitably lose the love.We hope you’ll enjoy this report with our compliments. We continue on our journeyof brand learning and we hope you’ll benefit from what we’re discovering. Do let usknow how our teams at Millward Brown and Millward Brown Optimor can put ourculture of curiosity to work for you!With warmest regards,Eileen Campbell383383This report would not be possible without the hard work and commitment of adedicated team of professionals. We wish to end our thanks and appreciation to:Our WPP sponsor—David Roth, Managing Director, Millward Brown Optimor—Nick Cooper, BrandZ™ Valuation Team Leader—Cristiana Pearson, BrandZ™Valuation Analyst—Elspeth Cheung, Global BrandZ™ Director—Peter Walshe,BrandZ™ Marketing Director—Delyth Hughes, BrandZ™ Marketing ProjectManager—Karen Jones
  4. 4. 4BrandZ™ Top 100 Most ValuableGlobal Brands 2012Contents4BrandZ™ Top 100 Most ValuableGlobal Brands 2012
  5. 5. IntroductionWelcome5Highlights 6Take Aways 8Strategic Essays 10Reputation, Purpose and Profits:Bridging the Gap11Sustaining brand relevance: The impact of newdevices on the path to purchase12Buzz means money: Social and digital media,vital to the health of successful brands14More than a megaphone: Interactivedigital engages people15Metail is the new retail: Brand owners andretailers face a new world16Fast Growing MarketsOverview 18Brazil 22Russia 24India 26China 28Top 100 OverviewBrandZ™ Top 100 Most ValuableGlobal Brands 201230Top Risers 38Newcomers 39Category Changes 40Brand Contribution 41Regions 42Top 10 North America 42Top 10 Continental Europe 43Top 10 Asia 43Top 10 Latin America 44Top 10 UK 44Brand Personality: Unlocking key traitsfor success and value45Product CategoriesApparel 48Beer 52Cars 55Fast Food 59Financial Institutions 62Insurance 67Luxury 70Oil & Gas 73Personal Care 76Retail 80Soft Drinks 84Technology 87Telecom Providers 92ResourcesMethodology 97WPP Contributors 100BrandZ™ Apps 103
  6. 6. 6BrandZ™ Top 100 Most ValuableGlobal Brands 20126The total brand valueof the 2012 BrandZ™Top 100 Most ValuableGlobal Brands reached$2.4 trillion.Brand value grewoverall, but onlymarginally, becauseof myriad economicand political issuesthat eroded consumerconfidence in thedeveloped economiesand because the BRICsslowed somewhat.Brand itself remainedstrong. And the portionof brand value attributeddirectly to brand,rather than financials orother factors, helpedsustain brands througha challenging year.The value of theBrandZ™Top 100Most Valuable GlobalBrands grew 66percent betweenthe first valuationin 2006 and 2012.During that six yearperiod, the BrandZ™portfolio of highlyvalued brandsoutperformed the S&P500—by 103 percent.On a category-by-category basis, sixcategories were up,six were down andfinancial was flatin the 2012 report.Luxury and fast foodrose most sharply, 15percent, followed byapparel at 13 percent.Technology andtelecom brandstogether comprisedabout 44 percent ofthe value of the 2012BrandZ™Top 100 MostValuable Global Brands.They accounted forabout one-third ofthe value in 2006.Four of the Top5 brands were intechnology. Number4, McDonald’s,was the exception.Apple stayed Number 1,with a 19 percent gainin brand value to $183billion for the technologyleader.With a brand valueof $116 billion, B2Bgiant IBM moved upone slot to Number2, ahead of Google.Highlights
  7. 7. One in five brands inthe BrandZ™Top 100Most Valuable GlobalBrands was from afast growing economy.The first brandsfrom Chile, retailersFalabella and Sodimac,entered the BrandZ™category rankings.MTN, a South Africantelecom, becamethe first brand fromAfrica to rank in theBrandZ™Top 100 MostValuable Global Brands.Another telecom, Airtelbecame the secondIndian brand in theBrandZ™Top 100 MostValuable Global Brands.Sinopec, the oil and gasgiant and the traditionalChinese clear liquorMoutai brought thenumber of Chinesebrands to 13 in the2012 BrandZ™Top 100.The first Australianbrand also enteredthe BrandZ™Top 100Most Valuable GlobalBrands. CommonwealthBank appreciated invalue in part becauseof its investmentsin the heatedAsian economies.With an increase of74 percent, Facebookappreciated the most inbrand value, moving up16 places to Number 19in the BrandZ™Top 100Most Valuable GlobalBrands, just behindWalmart and Amazon.Hermès grew 61percentin brand value, andmoved up 39 places inthe BrandZ™Top 100,based on the strongluxury market and thebrand’s desirability.IntroductionHighlights7
  8. 8. 8BrandZ™ Top 100 Most ValuableGlobal Brands 2012ValueConsumers are shopping. Butthey’ve adopted a new attitudetoward consumption—consideredrather than conspicuous. Manybrands that appreciated in value,such as Zara, Uniqlo and HomeDepot, combined quality with priceinto an appealing value proposition.RenewalBrand strength isn’t an inoculationthat prevents problems. Stuffhappens. The economy tanks.Consumer tastes change.Corrections are inevitable. Brandstrength enabled renewal tohappen. And happen quickly.Think Starbucks or Toyota.RelevanceBrand heritage is importantand hard earned. Heritagecan gain consumer trust. Butto be recommended todayrequires being relevant. In itscontemporary product range andclever communications Burberryoffered an excellent example.ReputationConsumers have little patiencewith brands—and corporations—that violate trust. They publicizetransgressions immediately andwidely on social media. When PRis facing damage control, it’s toolate for the reputation conversation.Reputation is a core strategicconcern. No brand gets a freepass. Consumers continued todistrust banks, no surprise. Butthey also scrutinized more reveredbrands like Apple, Facebookand Google.ReimagineNot long ago, a huge warehousefilled with racks stacked high withmerchandise defined successfulpower retailing. Consumers inthose aisles now shop with mobiledevice in hand, conducting pricecomparisons. Brands expectingto succeed in this landscape arereimagining themselves, looking forways to be present in a compellingway in every possible physicaland virtual reality. Tesco evenhas an interactive video wall inthe Seoul, South Korea subway.It’s the BrandZ™ measurement ofhow much of a brand’s value canbe attributed to the brand itself,exclusive of financials and otherfactors. High Brand Contribution isan enduring competitive strengthmost often found among luxurybrands. But not exclusively.Coca-Cola and two Chileanretailers—Falabella and Sodimac—ranked high in the 2012 BrandZ™Brand Contribution ranking,suggesting that this advantage isavailable to brands in any category.PersonalityNo single brand personalityguarantees success. There’sno formula. Brands in the sameproduct category, but with radicallydifferent personalities, can bothsucceed. The key is to understanda brand’s personality and thento incorporate those traits into aconsistent brand message. Brazil’sBrahma beer is among the highestbrands in Brand Contribution.Consumers think of the beer asfriendly and happy and Brahmareinforces this perception inits advertising.Take AwaysBrandContribution
  9. 9. Harder BRICsWestern brands are no longera novelty in many of the BRICmarkets. Local brands areimproving in functional andemotional appeal. Years ago,perhaps, brand success wasabout just showing up. Not anymore. Aggressively improvingits approach to consumers,the Russian financial institutionSberbank was among theTop Risers in brand value inthe BrandZ™ Top 100 MostValuable Global Brands.DisruptionAn entrepreneur with a goodidea and minimal investmentcan rapidly impact any category.Today’s telecom or a retailer canbe tomorrow’s bank. Digital makesit possible. Category disruptionis a looming threat that brandscan best handle by perpetuallyinnovating and experimenting,adopting what works andeliminating what doesn’t. EvenAmazon, which perfectedthe world of online shopping,experimented with a distributionpresence in the physical world.TechnologyIn almost any category, technologyseems to be at the center of theconversation. Retail is about beingomni-channel, present everywhereall the time, which is only possiblein your dreams or throughtechnology. The competitive battlein cars is not about horsepower,itself a retro word, but abouttechnical enhancements like voice-activated communication for drivingand controlling entertainmentsystems. BMWs came loadedwith technology; so did Fords.DigitalThere’s never a magic wand. Butdigital comes close. Its powerseems limited only by the creativityof thinkers and dreamers. Digitalenables brands to be ever-present in ways that inform anddelight people when they’re athome on a computer, engagedon a mobile device, passing acompelling outdoor display orstanding in a store aisle. Anddigital works across categories,as exemplified by the feature“Digital Discoveries” on the websiteof luxury brand Louis Vuitton.The impact of consumer concernwith health is most apparent inthe decline of cola sales and theaddition of salad and apple slicesto fast food menus. But the trendis deeper and wider than twocategories. Because we’re onlyhuman, we’ll continue to consumefood and drinks that are bad for us.But we’ll do it less. We won’t feelgood about it. And we won’t feelgood about the brands that enablethis behavior. Coke and Pepsiemphasized healthier options.And they were not alone.EntitlementConsumers feel entitled again.Having tightened their belts forso long, they need to exhale. Incategories such as luxury andpersonal care, individuals spentmoney at all price points, moreto feel good about themselvesthan to impress others, whetherpurchasing an expensivefragrance from Hermès or a moreaffordable one from Clinique.IntroductionTake Aways9Health &Wellness
  10. 10. 10BrandZ™ Top 100 Most ValuableGlobal Brands 2012Strategic Essays10BrandZ™ Top 100 Most ValuableGlobal Brands 2012Digital opportunities, anchored by trustworthyreputation, sustain brand relevance today.
  11. 11. Reputation, Purpose andProfits: Bridging the gapBy John GerzemaExecutive ChairmanStrategic EssaysReputation11“A business that makesnothing but money is apoor business.”– Henry FordCorporate responsibility activities haveexisted for nearly as long as corporationsthemselves. And great companies backedby names like Carnegie and Rockefellerreturned profits to the populace throughtrusts, foundations, charities and publicworks. Great companies were part of theculture and consumers rewarded themwith their business.But as corporations modernized andconsolidated, the focus for “doinggood” shifted away from the consumermarketplace to narrow elite audiencesthat shaped policy. The vision of theenterprises diffused, while their valuesbecame less clear in the marketplace.Today we are entering a new erawhere corporate reputation and brandmanagement are one in the same.New collaborative research from WPP’sBrandAsset Valuator™ and BrandZ™—the two largest surveys of brands in theworld—reveals that customers seek outand support companies that share theirvalues. And they reward these companieswith stronger brands and more loyalcustomer bases. Here are five key insightsfor understanding the power of corporatereputation and a framework for harnessingthat power to positively impact brandperformance and market share.1. Trust is the “New Black.”As fewer people trust brands, corporatereputationcandrivebranddifferentiation.Trust previously did little to differentiatea brand. But today, a trustworthycompany has a 35 percent greater chanceto drive brand differentiation. Trustshould be a central tenant of a manager’sstrategy for growth.2. Corporate Responsibilityhas evolved.It’s moved from communications toconversations.As society demands transparency andparticipation, corporations must become“truly public.” On Patagonia’s Foot PrintChronicles website, people can clickon any garment and virtually track thecompany’s supply chain, understandingpath to purchase, worker conditions andcarbon foot print. And they can comment.3. Corporate reputation buildsbrand equity.It helps by retaining loyalty amongexisting customers.Corporate reputation helps convincecustomers that a company is personallyappropriate and relevant to them, whichdirectly affects purchase behaviors.Corporate reputation is not just aboutcreating a warm glow around a brand.It’s an impactful customer retentionmechanism.4. The effects of corporatereputation can surprise.They are pronounced among older, moreaffluent and female consumers.Conventional wisdom holds thatcorporateresponsibilityismoreimportantto younger people. However, olderpeople “walk the walk.” As people age,their perceptions of social responsibilitybecome a stronger driver of brand choice.5. Corporate reputation can helpdistressed categories.It can infuse life into negatively perceivedcategories,such as energy.Corporate reputation provides a newpathway to improve brand identity,consideration and usage by buildingpositive differentiation in categories thatstruggle with reputation and tend to bemore defined by negative differentiation.A framework for changeSuccessfully acting on these findingsrequires first understanding andmeasuring corporate reputation. Wedivided corporate reputation into thesefour components:Success: Innovative, associated withquality products and financially strongFairness: Well priced, offering goodvalue for money, honest and decent inrelationships with customers, suppliersand other companiesResponsibility: Respectful of employees,scrupulous about supply chain practicesand protective of the environmentTrust: Consistently delivers on promisesabout products and servicesThese four components move alonga continuum from characteristicsseen as “hard” and practical businessconsiderations (Success and Fairness) toother important issues seen as less coreto business achievement and therefore“soft” (Responsibility and Trust). Untilnow these four components were notwell integrated. The hard issues drovethe business. Too often the soft issuesformed the “moat” around the business,an afterthought done for pragmaticreasons and lacking conviction.Success today requires integratingthese components into all levels of thebusiness. This approach produces brandintegrity, a tensile internal strength that’smuch more durable than the “moat.”It is vitally important for companies tounderstand that that they have two typesof shareholders, those who hold stocksand those who buy products and services.In fast growing markets and in startupactivity many managers already take thismore holistic view. Because they don’tdistinguish between corporation andbrand, they’re better able to translatevision, principles and values into brandexperiences for customers.David Roth
  12. 12. 12BrandZ™ Top 100 Most ValuableGlobal Brands 2012Sustaining brand relevance:The impact of new deviceson the path to purchaseThe digital revolutioncan be likened to arunaway train forsome brands.It’s very hard to board now that it’son its way and, even if you have a seatalready, it’s a far from comfortable ridewith the emergence of new devices—and the ways in which consumersinteract with them—acting like yetmore unpredictable junctions in thetrack ahead.Constant connectivity has madeconsumers more vocal than ever before,and this word of mouth influencesdecision-making everywhere. It hasnever been easier for the connectedconsumer to report on a bad experience,in real time, while feelings are stillraw. And these comments, reviewsand criticisms have an effect—with 52percent of people surveyed globallysaying that a single negative review willhave an impact on how they feel towardsa brand.Many brands have learned that thisshift in the balance of power towardsthe consumer requires an overhaulof marketing approaches, with theflexibility to respond to opportunities—and threats—in real-time a significantdriving factor in maintaining a positivereputation.The biggest enabler of this powershift over the past few years has beenthe smartphone explosion. Withapproximately 30 percent of the worldnow constantly connected—researchingpurchases, comparing prices, shoppingvia mobile and sharing commentswith their network and beyond—theimplications for brands continue tobe huge.Mobile intensifiesdisruptionWe have seen the Internet ande-commerce make a major impact onshopping; mobile Internet has takenthis disruption to a new level and posesdiverse challenges. Many brands areexperimenting with different approachesto the retail environment, using theirphysical locations as showrooms, laidout for strong design appeal, ratherthan showcasing piles of products.Showing consumers the product in ahighly compelling setting, but givingthem access to the size, model, or colorthat they want via a kiosk in-store isproving a good way to evolve the in-storeexperience to keep pace with technologyfor some brands.The 28 percent of consumers who areusing a mobile device to research in-storealso create a new dynamic. Brands needto take action to ensure that they canhold their own in an environment whereconsumers can be more knowledgeablethan sales staff. Empowering shop-floorteams with their own handheld devicesthat provide access to the latest prices,stockroom situation and consumerreviews will help retailers stay relevant.I write about brands to...% who agreeShare experiences 646461605653514640Offer advicePraise a brandAsk adviceShare answers/opinionsCriticize a brandShare cool stuff from brandsCustomer servicePaid/rewarded for doing soFiona BuchananDevelopment ManagerBy Joseph WebbUK Head of Digital& Technology
  13. 13. Meeting shoppers on thepath to purchaseBrands need to make mobile a key partof the in-store experience, ultimatelycreating another POS channel.Approaches for integrated mobile intothe store include providing free Wi-Fiand having QR codes that link to productinformation or expert reviews. Mobilewallet is also slowly gaining traction andalready more than a third of consumersglobally are interested in using thisservice, which may take us towards aworld without check-out queues, oreven check-outs at all, solving a majorannoyance of the grocery shopper.Increased tablet ownership will producemore new behavior and attitudes. We’realready seeing tablets impact where andhow we shop, with highly compelling,engaging interfaces driving out-of-storepurchases. As tablet penetration grows,the opportunities to develop new waysfor consumers to shop online will alsogrow exponentially.Consumers are increasingly paving theirown path to purchase, with a growing,device-driven autonomy from traditionalchannels. Brand successes requiresharnessing these new behaviors to enableand enhance the consumer experience anddeliverthebrandmessagewithconsistencyacross all media and purchase channels.Internet penetrationinfluences messageand mediaThe message and media approach,influenced by Internet penetration, variesbycountrymarket.InamarketlikeSweden,wheremorethannineoutof10peoplehaveaccess to the Internet, only 31 percent ofpeople regard TV ads as influential, whilealmost three-quarters (74 percent) willgo online to find out information abouta product seen elsewhere.Compare this to Indonesia, whereInternet penetration has only reached16 percent and the majority of Internetaccess is via a mobile device. Here, TVplays a far larger role, with 96 percent ofIndonesian Internet users regarding TVas influential—even if they are surfingthe Internet on their phone as theywatch it.An opportunity exists for brand ownersin both of these markets to deliverimpactful, integrated campaigns, but thatrequires a sound understanding of whichdevices consumers use, when, why andhow. These possibilities seemed far-fetched just a few years ago. Yet withdevices putting consumers in the driver’sseat, the choice for retailers and brandsmay be less of a question of whether theycan keep up, but rather whether they canafford not to.Strategic EssaysThe Impact of Digital1313
  14. 14. 14BrandZ™ Top 100 Most ValuableGlobal Brands 2012Buzz means money: Social and digital media,vital to the health of successful brandsBy David BarrowcliffSpecialist: Social Media Measurement383383The 2012 BrandZ™Top 100 Most ValuableGlobal Brandscomprises many of thegreat and the good,the different and thespecial, and the mosttalked about.WPP social media monitoring company,Visible Technologies, carried out anaudit of the digital social and traditionalbuzz for each of the Top 100 brands overthe last year. From this we have createdan “Earned Buzz Index”, weighted bypositive mentions, together with theMillward Brown BrandZ™ measure ofonline fans (FanZ Index).As might be expected, the brands withmore fans created more “Earned Buzz.”But the crucial finding is that brands withmore fans and “Earned Buzz” levels aremuch more valuable.And brand value growth is significantlybetter if buzz is better. The Top 10“Earned Buzz” brands grew on averageby 5 percent in value last year, while thebottom 10 declined 8 percent.The future also is brighter. The BrandMomentum Index measures theprospects of future earnings on a scale2012 BrandZ™ Top 100 in groups of 10 by level of “buzz.”Brands with higher value have more fans and more “Earned Buzz.”More buzz and fans means more valueEarning the privilege of beingtalked about is one of the assetsof an interesting, meaningfullydifferent brand.The “Earned Buzz” Top 10Rank Category Buzz Index(average100)1 Facebook 1,3312 Google 1,2293 Apple 1,0934 eBay 4755 Microsoft 4426 Sony 4377 Amazon 4258 Samsung 3019 HP 28210 Disney 280Value $511bn$112bnEARNED BUZZ INDEXEARNED BUZZ INDEXEARNEDBUZZINDEXFAN Z INDEX FAN Z INDEX FAN Z INDEXFANZINDEXof 1 to 10, 10 being the most positivescore. The Top 10 “Earned Buzz”brands averaged a score of 8 in BrandMomentum compared with a score of 6for the bottom 10.So what are the “EarnedBuzz” Top 10 brands?They are completely dominated by UStechnology brands, and even the oneretailer, Amazon, is fundamentally atechnology brand. The entertainmentbrand Disney is also becoming heavilydependent on the digital space.
  15. 15. More than a megaphone:Interactive digitalengages peopleBy Eric MaurielloSenior Vice PresidentStrategic EssaysThe Impact of Digital1515It’s not just what brandssay that matters, it’swhat they do.And yet, even as Digital Out of Home(DOOH) becomes more and more a partof our physical and imaginative landscape,brandsarestillusingtheplatformmainlyasa megaphone—to shout at people as theyrace past in their cars or mosey throughthe mall.Sometimes there’s a twist, such as theintelligent billboards in the Tokyorailway system that change up theirads depending on the perceived age/gender of the person looking. But at leastfor the moment, DOOH concentrateson advertising to consumers withoutoffering them any new benefit specificto the locational, interactive potential ofthe platform. Except making it easier foradvertisers to sell and publish content.In fact, I would go so far as to venturethat, currently, DOOH benefits mediacompanies more than it does eitherbrands or consumers; with the abilityto change digital signage every hourvia computer, advertisers can sell moreinventory, with much less effort. Brandsshould be encouraged to rethink DOOHas “Interactive Out of Home”—that is,as an opportunity to do something withthe audience: engage them, entertainthem, above all, get them to participate.Some brands get it rightThere are definitely brands out there thataregettingitrightandworkinginteractivityinto their DOOH environments.Twentieth Century Fox’s Avatar Na’vicampaign promoting “Avatar,” forexample, incorporated both augmentedreality and a large-format video wall, bothof which enticed passersby into “morphingstations” to transform themselves intoa Na’vi, the blue skinned species fromthe movie. Yahoo’s Bus Stop Derby letparticipants engage with other peopleat other bus stops, in real time, throughcompetitive social games.As another example of effective interactiveout of home, we at Possible WorldwiderecentlyunveiledtheMacy’s“BeautySpot,”a multi-branded in-store area, anchored bya large-format touchscreen, that providescross-brand information, inspiration, andrecommendation to customers. We couldhave installed a digital billboard in exactlythe same place, but by making the BeautySpot interactive and linking it to theuser’s mobile device and social networks,we delivered shoppers a satisfying multi-channel experience, bringing aspects ofthe website, the customer’s digital identity,and the mobile experience together ina way that bolsters the Macy’s brand bymaking people feel both excited to exploretheir favorite brands while being in controlof their time and level of commitment. Trydoing that with a digital billboard, even ifthe glossy ads change up every minute.Innovation needs somestandardizationPart of the problem with innovating inthe out of home market, of course, is thatit’s in its nascent stages and thus mostdeployments are bespoke, for particularclients and situations. Standardizedbackends, platforms, and ecosystemshave resulted in an explosion of growthand innovation for the Web and mobile;think only of the opportunities that theiTunes or Google models have providedthe creative industry. In contrast, rightnow, when we build an interactive outof home app, we often also have to buildthe platform on which it will reside.Once interactive out of home platformsbecome permanent fixtures in ourlandscapes, and “all” developers haveto do is create exceptional immersiveexperiences for people, we’ll see a hugesurge in transformational work that willnot only surprise and delight people—andturn them into brand-loyal consumers—but can actually improve the quality oflife. The work that Possible recentlydid for the Bill and Melinda GatesFoundation’s Visitor Center demonstratesprettydramaticallywhatcanhappenwhenpeople are able to interact intelligentlyin DOOH environments. Fourteeninteractive exhibits educate people aboutimportant global issues and enable themto contribute ideas for improving theworld. As the proverb says: “Tell me andI’ll forget; show me and I may remember;involve me and I’ll understand.”
  16. 16. 16BrandZ™ Top 100 Most ValuableGlobal Brands 2012Metail is the new retail:Brand owners and retailersface a new worldBy Michael RossCo-founder and DirectorThe Internet hascatalyzed fundamentalchanges across theentire retail system.At the heart of the changes is a dramaticshift in retailing priorities. Location,location, location is giving way tocustomer, customer, customer.This transformation is so pervasive thatany business that merely tries to adaptpiecemeal will struggle. For both retailersand brand owners to succeed in this newworld, they need to learn from each otherand become more like each other. Theshift is creating in a completely new typeof merchant, a blend of retailer and brandowner—the metailer.The notion of metailer evolves naturallyfrom how the Internet has changed retailfor consumers, brand owners and retailersthemselves. The Internet has left no partof the retail system untouched. The oldrules don’t work and the old labels nolonger describe the current reality. Forthe most part, this new world is good forconsumers and brand owners. But it’smixed for retailers.The Internet benefitsconsumers andbrand ownersFor consumers, the purchasing processis completely different than what it oncewas. Today consumers have much moreinformation, choice and control overwhat and how they buy. The Internet hasendowed consumers with two importantand related characteristics that directlyimpact their purchasing behavior.– Freedom The unshackling ofcustomers from location has brokenthe traditional retail model. Other thanproducts for immediateconsumption, consumers now haveaccess to an almost unlimited setof brands and products, and toretailers across the globe. For mostcategories,consumers are voting withtheir mouse. Online is now a largeand growing part of the retail mix.– Empowerment Information aboutproducts, prices, availability andperformance is instantly available viaPCs, mobile phones and tablets.For brand owners, the Internet enablesdirectaccesstoaglobalpoolofcustomers.That means brand owners no longerneed to rely on retailers and can adopta radically different distribution strategybased on online, flagship stores andvery selective wholesale distribution.And brands benefit from the resultingimproved margins and deepenedcustomer understanding.Retailer benefitscome with problemsFor retailers, the Internet brings a mixof benefits and problems. The ledger istilted slightly to the positive, which isfortunate since the Internet is impossibleto ignore. The good news for retailersincludes these developments:– Greater access to more customersTraditional retailers gain access tocustomers outside the catchmentarea of their physical stores.Skills of a metailer:Merchant prince meetsmathmeticianWe have moved from a world ofanonymous and captive customers,to a world where they are knownand unshackled; from a world whereretailers were distinct from brandowners to a world where each ismorphing into the other.In a world centered on stores,retailers simply need to be good atstores. It’s relatively easy to identifygood and poor performing storesand to understand what is workingand not working.But in a world of hundreds ofthousands, if not millions, ofcustomers, a retailer needs to begood at statistics to make sense oflarge quantities of transactional data.This requires a different skill set, newtypes of thinking, new models andnew equations. The key elementsinclude:- A culture of metrics and data,with data scientists at the heartof the business- Strategy driven by consumer insight- Business planning driven by customer acquisition andretention dynamics- An organization centred around coherent customer groups- Measurement of all the things thatmatter to customersThe successful metailers will bethe ones who embrace this newworld by adopting this cultural shift.The battle for customers is justbeginning.
  17. 17. Strategic EssaysThe Impact of Digital1717In today’s world, metailers have muchmore sensitive diagnostic informationderived both from the physical and virtualstore activity. They can determine, forexample, not simply that a particularphysical store is underperforming, but alsohow customers are shopping, which skusthey may be browsing but not purchasing.Metailers can have insight and cantake action at the individual customerlevel. This is not necessarily just aboutpersonalization or loyalty, though it couldbe. It is simply about recognizing thesetwo key related points:– Customers drive retail growth.– Cost effective acquisition andretention of customers drivesprofitable growth.So understanding individuals—theirpurchasing patterns, their behaviors,their wants and needs—is critical tooptimizing any commerce business.Failing to understand is a recipe for sub-optimization. In a competitive market,sub-optimization is a recipe for failure.– More touch points Cross-channelinteraction deepens relationships withexisting customers and makesit easier to acquire new customers.– More customer data Many retailersstruggle to gain customer insight.Much more insight is available and theInternet makes it easier to obtain it.And here’s some of the bad newsfor retailers:– More competition More retailersand brand owners are movingonline, opening up internationally orcreating niche boutiques, which allheightens competition.– Restricted access to someproducts As brand ownersincrease direct engagement,retailers will find that some of theirbestselling brands abandon them.Tosucceedinthisuniverse,retailersneedto manage their businesses differently.Introducing metailersThe old model was linear. Thecommercial activity moved from thebrand owner through the retailer tothe customer. Today, the customer isthe center of the universe, the “me” inmetail, communicating directly withboth the brand owner and the retailer.The terms retailer and brand ownerbecome misleading and obsolete. In aworld where successfully selling productsand services depends primarily onprofoundly understanding the customer,the brand owner and retailer are in thesame business.Both try to understand the customerand to customize the offering to meetcustomer needs. Both engage withcustomers in multiple channels toprovide a brand, or many brands. Bothare metailers, especially when theyexhibit a customer-centric outlook andexpertise in data analysis.Succeeding at metailIn the past, retailers depended on keymetrics, such as profit-per-store, todetermine the health of the enterpriseand to insolate any problems, which theywould remediate with store-level fixes:open, close or refit a store and fire or hirea manager.
  18. 18. 18BrandZ™ Top 100 Most ValuableGlobal Brands 2012The 2012 BrandZ™ Top 100 Most Valuable GlobalBrands reveals a new phase in the development ofbrands in fast growing markets.18BrandZ™ Top 100 Most ValuableGlobal Brands 2012Fast Growing Markets
  19. 19. 663%47%NON-FASTGROWINGFASTGROWING66%ALLTOP10019As BRICs slow,new marketsand brandsemergeDuring the past decade,these markets, especiallythe BRICs—Brazil,Russia, India andChina—served as themostly dependableengines of globaleconomic growth. Andeven during theeconomic crisis of 2008and 2009, the totalvalue of the brands fromfast growing marketscontinued theirsteady climb.In 2006, the BrandZ™ Top 100 includedonly two fast growing market brands,from China. Less than a decade later,fast growing markets account for one-in-five brands in the 2012 Top 100. Duringthis period, the value of brands fromfast growing markets in the Top 100increased in value by 663 percent.But in the 2012 BrandZ™ Top 100Most Valuable Global Brands the rateof brand value appreciation in the fastgrowing markets slowed. Some factorswere country specific. The attemptto moderate inflation contributed tothe economic slowdown in India andBrazil, for example. But, overall, theBRIC deceleration illustrated theinterdependence of nations in a globaleconomy. China reduced demandfor commodities from Brazil. And allthe BRIC countries felt the declinein demand from financially troubledcountries in the Eurozone.Value declines forsome brands, but newbrands appearAs the spotlight dimmed on somebrands, at least temporarily, other brandsemerged from the shadows. ChinaMobile, the country’s most valuablebrand, and China’s most valuable bankbrand, ICBC, declined. At the same time,Fast Growing MarketsOverviewthe Chinese oil and gas giant Sinopecappeared in the Top 100 for the first time,as did Moutai, a leading brand of baijiu,China’s traditional clear alcohol.Similarly, Petrobras, Brazil’s oil and gascompany, declined and two Brazilian bankbrands, Itaú and Bradesco, fell below theTop 100 in value. But three Brazilianbrands—the beers Skol and Brahma, andthe cosmetic producer Natura—rankedamong the Top 15 brands in BrandContribution, the measure of how branditself, rather than financials or otherfactors, contributes to earnings.Russia’s telecom MTS declined. Butfollowing a major effort to refresh thebrand, the financial institution Sberbankincreasedinvalue25percent,whichplacedit among the BrandZ™ Top 20 fastestrisers. While the Indian bank ICICIdeclined, the Indian telecom Airtelappeared in the BrandZ™ Top100rankingfor the first time. The first African brand,MTN, a South African telecom, debutedin the ranking.Two Chilean brands appeared for the firsttime in the BrandZ™ ranking of brandsin the retail category. An operator ofdepartment stores and specialty outlets,FalabellaisoneofSouthAmerica’slargestretailers. Sodimac, a Falabella company,is a consumer home improvement andB2B construction materials retailer.Fast growing market brandsexperienced sharper growth thaneither the non-fast growing marketbrands or the Top 100 over all.Brand value growth in fast growingmarkets helped compensatefor the difficulty in banking andcertain other categories during thefinancial crisis of 2008 and 2009.Source: BrandZ™ dataValue of brands since 2006
  20. 20. 20BrandZ™ Top 100 Most ValuableGlobal Brands 20123312124314132944Current results suggestfuture directionThis maturation of fast growing marketbrands reveals several trends that pointto likely future developments.1. The representation of fast growingmarket brands in the BrandZ™ Top 100will increasingly include brands fromboth the BRICs and other nations fromAsia, Africa and Latin America.2006 2007 2008 2009 2010 2011 2012China 2 5 5 6 7 12 13Russia 1 2 2 2 2Brazil 1 2 3 1India 1 1 2Mexico 1 1 1Africa 1TOTAL 2 5 6 9 13 19 202. Brands from the fast growing marketsare predominately in infrastructureand financial categories, reflectingtheir status as state-owned or state-controlled enterprises. But technologybrands also appear because of theubiquity of technology and expandingentrepreneurship. Over time, thefast growing market brands will bepresent in many more categories,cultivating consumer allegiance athome and increasingly seeking newopportunities abroad.Although the presence of fast growing market brands in the BrandZ™Top 100 ranking slowed last year it continued and expanded to includeAfrica for the first time.Source: BrandZ™ dataFast growing market brands are especially represented in financial,telecoms and other categories typically dominated by state-owned orstate-controlled organizations. The categories in which brands from fastgrowing markets are present will become more diverse over time.Source: BrandZ™ dataTechTelecomsFinancialOtherFast GrowingMarketsOtherMarkets
  21. 21. Fast Growing MarketsOverview2121Sources: Global TGI, National censusauthorities; International Monetary FundBRICs% of worldBRIC FOUNDATIONSPOPULATIONAND GDPThe four BRIC countries include 42percent of the world’s populationbut account for only 17 percent ofits GDP.2010population2010GDP ($B)Brazil 191 million 2,024Russia 142 million 1,477India 1,192 million 1,430China 1,342 million 5,745BRICs 2,867 million 10,67617%GDP42%Population3. Compared with brands generally,the BrandZ™ Top 100 score higherin the BrandZ™ metrics about Trust,Recommendation and Desire. Brandsfrom fast growing markets score evenhigher in these metrics than the Top100 overall. And while the Top 100 alsoexhibit a much more robust BrandZ™Pyramid than brands generally, the fastgrowing market brands again outperformthe Top 100 overall.The BrandZ™ Pyramid illustrates thebuilding blocks of a brand’s connectionwith its customers. The Pyramid isbuilt on a foundation of “presence,” orawareness of the brand, and culminatesat “bonding,” which measures theemotional attachment when a customerbelieves that a brand offers moreadvantages than its competition.The BrandZ™ Top 100 outperform brands in general at all levels ofthe BrandZ™ Pyramid. Brands from fast growing markets performeven better, indicating that they have achieved a close connectionwith customers.Source: BrandZ™ data22596377911240495873425344052BondingAdvantagePerformanceRelevancePresenceBondingAdvantagePerformanceRelevancePresenceBondingAdvantagePerformanceRelevancePresenceFast GrowingAll Top 100All brands
  22. 22. 22BrandZ™ Top 100 Most ValuableGlobal Brands 2012BrazilExpandingmiddle classdrives brandgrowthBrazilians feel optimisticabout the future relativeto most of the world’spopulation.Around 70 percent of Brazilians believethat the country’s financial situation isgoing “well” or “fairly well,” comparedwith a global average of 39 percent,according to the Global Monitor studyof The Futures Company. Because theeconomy slowed last year, however, thepositive attitude of most Brazilians ismoderated by some doubt about boththe country’s economy and their personalfinances, The Futures Company found.The underlying optimism is based onseveral factors that transformed theBrazilian economy and accelerated thegrowth of brands during the past decadeincluding: consistent government focuson improving social and economicequality; a thriving economy, despite thecurrent slowdown; increased availabilityof credit; and national cohesivenessand pride with growing excitement inanticipation of the 2016 Olympics andWorld Cup in 2014.Perhaps indicative of the wide incomedisparity that has divided Brazilians inthe past, the government organizes thepopulation into hierarchical economicclasses, A to D, wealthiest to poorest.As in many societies, the wealthiestindividuals remain well off or evenbecome wealthier. The distinctionin Brazil, over the past decade, is thebroadening of the middle class, or inBrazilian categories, the ascendency ofpeople from D to C and from C to B.Since 2003, roughly 40 millionBrazilians—out of a population of 200million—have entered the middleclass. The C class now includes abouthalf of Brazil’s population according toTGI. This demonstration of nationalconscience and self-sufficiency hasburnished the nation’s self-image andunleashed spending that impacts brandsacross all categories, with credit widelyavailable from credit cards, governmentprograms and through employers.ManyBrazilianandmulti-nationalbrandshad largely ignored or underservedmuch of the low-income population withpoorer quality products provided in bigeconomical and unattractive packaging.They now accord these consumersincreased attention and respect.Consumers adoptspending strategiesOver time, Brazilian consumersperfected strategies to bridge the gapbetween what they aspired to buy andwhat they could afford. In the past, low-income consumers might pay one or tworeais for a bottle of private label cola,for example. Today, they often spend afew more reais to buy Coke because it’saffordable, if more expensive.But they may alternate their purchaseof Coke with a private label, reservingCoke for special occasions and aweekend treat, while drinking privatelabel on weekdays. Similarly, consumersincreasingly mix brand and private labelin the personal care category wheremany products offer both functional andemotional benefits. A female shoppermight purchase a relatively low pricedshampoo for general family use, but theBrazilian brand Natura for herself.Natura, Brazil’s leading manufacturerand marketer of cosmetics, emphasizesnatural and socially responsible products.It’s among the category leaders inthe BrandZ™ ranking of personalcare brands and earns a high score forBrand Contribution, which measuresthe portion of brand value attributabledirectly to the brand rather than tofinancial performance or other factors.Fundamentals forbrand building in Brazil1. Reach out digitallyBrazilians are among the mostwired people on the planet. Thisinterconnectivity helps cross thesocial and economic divides, whichare narrowing but sill exist.2. Be prepared forcompetitionInternational brands enteringor expanding in Brazil arelikely to encounter both eagerand welcoming consumersand increasingly tough localcompetitors.3. Recognize distinctiveculturesBecause Brazil is a geographicallylarge and demographically diversecountry, successful brandsrecognize that making an impacton consumers requires adaptingto many local cultures.4. Be emotionalBrazilians respond positively tobrands that create an emotionalbond. While rational reasons forpurchasing products and servicesremain important to Brazilianconsumers, they are especially loyalto brands that earn their affection.5. Help build BrazilBecoming a genuine and activeparticipant in the effort to raise livingstandards and reduce inequities willultimately benefit the brand.
  23. 23. Fast Growing MarketsBrazil23Spending touchesmost categoriesRetail brands are organizing theirbusinesses to serve the new middle classconsumers. Grupo Pão de Açúcar, thenation’s largest retailer with a portfolio of1,800 stores, operates three supermarketbrands, each targeted to a particulardemographic group. The internationalhypermarket brands, such as Carrefourand Walmart, are opening smaller storescloser to the economically transformingurban neighborhoods.TAM, the largest airline of Brazil andLatin America, and the carrier GOLare among the travel brands benefittingas consumers spend their growingdisposable income on travel. Leadingbank brands, such as Bradesco and Itaú,are adding branches, especially in thefavelas and other poorer neighborhoods.Cielo and Redecard, brands that developcredit card networks and processpayments,alsoareexpandingtoservetherising middle class, as is Multiplus, whichdevelops loyalty programs. Ownership ofcredit cards increased from 46 percent ofC class individuals in 2005 to 53 percentin 2009, according to TGI. Store brandcards increased from 15 percent of theC population to 25 percent over thesame period.Brazilians likelocal brandsThe positive way Brazilians feel abouttheir country extends to Brazil’s brands,such as Natura or Havaianas, producerof the world’s most recognizable flip-flop sandal. Even Petrobras, the nationaloil and gas giant and the nation’s mostvaluable brand, is held in high esteem.In contrast to developed markets,where consumers regard oil companieswith suspicion because of their sizeand environmental impact, Braziliansappreciate Petrobras for driving theeconomy and providing employment.The brand reinforces those attitudeswith sponsorship of cultural, sportingand educational initiatives. Althoughthe Petrobras brand value declined,it remains one of the world’s highestvalued oil and gas companies, ranking 75in the BrandZ™ Top 100.Major global marketers, like Unilever,recognized growth potential in Brazilat least a decade ago and beganenjoying the results in the past fewyears. PG increased its investmentduring this period, becoming a majorsponsor of popular TV programs andcross marketing its products under thecorporate umbrella brand.Some global brands, such as Nescafé,have been in Brazil so long thatconsumers think of them as Brazilian.The local beers Skol, Brahma andAntarctica enjoy tremendous popularityas Brazilian brands, although the globalbrewer AB-InBev owns them.Learning to communicateMany Brazilian brands are learning howto communicate with the same expertiseexhibitedbythemulti-nationals.They’reexperimenting with social media, forexample, attempting to use it more for arelationship-building opportunity ratherthan another sales channel.Mobile communication potentiallyoffers a major brand marketingopportunity because Brazilians are sowired. According to some estimates, thenumber of cell phones in Brazil exceedsthe size of the population. The brandmarketing challenge, for now, is thatonly a small percentage of these devicesare smart phones. But 65 percent ofBrazilians use the Internet everyday,according to the TNS Digital LifeStudy, which also found that Braziliansbuild some of the most extensivesocial networks in the world, with anaverage Brazilian network consisting of481 friends.Brazil51 48 50584347Source: Global TGI research based onanalysis of 20-to-54 year-olds in the largestcities in BRIC markets and a countrywidesample in the US and Europe (UK, France,Germany, Spain)“I try to keep up withdevelopments in technology”% who agreeRussiaIndiaChinaUSEuropeBRIC FOUNDATIONSCONTEMPORARYATTITUDESOn the subject of technology,differences narrow among theBRIC markets and between theBRICs and the US and Europe.In fact, relative to the US andEurope, more people in theBRIC markets say they try tokeep up with developments intechnology. Of the many reasonsthat might explain this finding,perhaps the most compellingis that technology enablesand accelerates change. Inthe West, for example, mobilephones added convenience.In markets lacking significanttelecommunicationsinfrastructure, mobile phoneshelped transform societies.
  24. 24. 24BrandZ™ Top 100 Most ValuableGlobal Brands 2012RussiaTurning pointas consumersseek brands,not institutionsThe deep sense ofRussian identity thatpermeates most aspectsof life in this country nowextends to brands.Having learned about brands from theWest, copying is no longer sufficient.Russian companies are beginning tointroduce new brands and reenergizeold ones, infusing them with Russianidentity and global best practices.Changing consumer attitudes influencethis trend, which is especially evident inretail. With increasing prosperity, brandsare more important to consumers. And,more experienced with brands, Russianconsumers are becoming practical andsophisticated shoppers, less impressedwith a brand simply because it’s Westernand more determined to find the rightprice/quality balance.At least three constituencies also drivethis effort to create world-class Russianbrands: first, well-traveled Russianconsumers whose exposure to the Westraised expectations; second, Russianentrepreneurs who aspire to createproducts that meet or exceed Westernstandards; and third, the government.Several years ago, reacting to theexplosion of Western goods availablein Russia, President Vladimir Putinchallenged the nation’s businesses todevelop strong Russian brands.Transforming frominstitutions to brandsThis combination of individualityand national pride is most evident inthe transformation of many heritagenames that historically succeeded asnational institutions rather than asbrands competing for customer loyalty.This trend is clearly articulated in therebranding of Sberbank, the nation’slargest bank. Established 170 years ago,the bank’s history includes its formationin czarist Russia and adaptation to theSoviet bureaucracy.Today, Sberbank is deeply involved in aretail redesign project to better identifyand serve segments of the consumermarket. The bank is upgrading its22,000 branches to one of eight differentdesignations that include flagship locations,VIP centers, business centers, 24-hour self-service lobbies and kiosks for performingtransactions including bill paying. Mostimportantly, the change is not simplycosmetic. It suggests an organization thathas turned its face to the consumer both invisual effects and attitude.The Sberbank example reflects anemerging interest by many Russianbrands to segment their audiences andcreate targeted offerings. Other venerableinstitutions engaged in significantrebranding efforts include: Aeroflot,established in 1923, and the RussianRailways. The descendant of Russia’sDepartment of Railways, formed in 1842,and completion of the Trans-SiberianRailway in 1905, Russian Railwaysrebranded to abandon its staid imageand emphasize the future, technicalcompetence and customer focus.Growing the private sectorThe more contemporary Alpha-Bank,connected its twentieth anniversarywith a birthday celebration for Moscow.The outdoor extravaganza included adramatic laser show projected on thefaçade of the landmark Moscow StateUniversity building, and a sky filledFundamentals for brandbuilding in Russia1. Know your customerIf you are selling dreams, status orconspicuous consumption, you’llfind plenty of buyers, especiallyin Moscow and increasingly St.Petersburg and other metropolitanareas. For products or services tomeet everyday consumer needs,however, Russians are driven byquality and will no longer pay morejust for a foreign brand.2. Expect the unexpectedRussia offers tremendousopportunity for brands. But therules of the game—the decision-making process, business prioritiesand consumer preferences—canbe different than in the West.Schedules constantly changeand everything takes longer thanexpected, so be flexible.3. Do the researchRussia is one place that oftendisproves the “branding is global”approach. One size rarely fits allin this huge country, especiallywhen the brand originates in theAmericas. The right research cansave bundles in time and money.4. Show respect andappreciation for theRussian cultureRussians are proud of theircountry. Even when they criticizeit themselves, they may notappreciate having others join in.Russians take great pride in theircultural heritage and expect the restof the world to admire it as well.5. Be prepared to spend timeAt the end of the day business getsdone, but expect a long period ofsocializing and getting-to-know-you conversation before businessis discussed. When Russians getdown to business, they tend to bemore direct in their response andopen criticism is socially accepted,so feedback often starts with “No.”
  25. 25. The Fastest Growing MarketsRussia25Fast Growing MarketsRussia25Source: Global TGI research based onanalysis of 20-to-54 year-olds in the largestcities in BRIC markets and a countrywidesample in the US and Europe (UK, France,Germany, Spain)“Once I find a brand I like Itend to stick with it”% who agree“I ask people’s advice beforebuying new things”% who agreeBrazilRussiaIndiaChinaUSEuropewith fireworks and thousands of balloons.The bank intended the production tosupport its brand-building drive andhighlight its association with innovationand leadership in banking technology.This proclivity for proactive brand buildingbeyond simple advertising is especiallypronounced in retail. Savage, a fashionbrand, captured the spirit of the timeswith the theme “be true to yourself.”Centro, a mass-market shoe brand shiftedits emphasis to affordable fashion fromprice alone. To differentiate from thecompetition, and establish itself as a brandrather than a multi-brand emporium, theconsumer electronics retailer Eldoradorefurbished its stores to project the brandpromise to make life easier throughproducts, shopping experience andtechnical support. M-Video, anotherelectronics retail leader, focuses intentlyon understanding its customers.The Russian government hasaccelerated this emphasis on brandswith a privatization program that touchesmany categories of products and servicesand has resulted in many Initial PublicOfferings (IPOs). Russia’s second largestbank, state-owned VTB, completed anIPO in May 2011. Rosneft, the oil andgas giant, completed an IPO a year earlier.Facing Western-typebrand challengesBecoming a brand means facing brandchallenges. As in the West, Russia’sthree leading telecommunicationsbrands—MTS, MegaFon and Beelinestruggle to differentiate and defendtheir leading positions. Competitively,they’re squeezed between state-ownedRostelecom and two relatively newprivately owned operators, Tele2 andYota. To increase consumer appeal inthis competitive environment brandsincreasinglyofferbundledservices.Mergerand acquisition activity has increased.Russia’s beer brands are preparing forregulations that will prohibit televisionadvertising as of July 2012. In a uniqueeffort to leverage the brand, and reachvarious segments of the market, Russia’sleading beer, Baltika, offers 13 variationsof Baltika, each numbered and brandedwith the Baltika name. Baltika 3, forexample, is a popular lager, while Baltika7 is a premium brand. Other numbersare assigned to light beers, ales andother parts of the range. The brewercontinuously identifies groups that areunderserved and creates an appropriatebeer. Owned by Denmark’s CarlsbergGroup, Baltika is exported worldwide.Expanding internationallyAs Russian brands gain nationalrecognition, they increasingly seekinternational expansion opportunities.Some fashion brands have opened storesin Eastern Europe. Yandex, the market-leading search engine, serves many of thenations of the Former Soviet Union andhas wider expansion aspirations, havinglaunched operations in Turkey in 2011.The brand enjoys a reputation for strongperformance coupled with aggressivemarketing. It was the first Internet brandin Russia to advertise on TV. Along with asearch facility that enjoys over 62 percentmarket share in Russia, Yandex also offers amenuofonlineservicesincludingashoppingmall and YandexMoney, a payment system.It’s noted for maps that include a traffic jammonitoring tool. Also in the technologycategory, the Russian-owned multi-nationalcomputersecuritycompanyKasperskyLabenjoys a strong B2B reputation. It operatesin roughly 30 countries.Russia’s energy giants, like Gazprom,Rosneft and Lukoil, operate acrossnational boarders. Gazprom has acquiredcompanies in Central and WesternEurope to serve the natural gas needs ofconsumers in those markers. Overseasoffices enable the companies to navigateregulatory issues, which tend to bestricter in Europe and North Americacompared with Russia. Lukoil is focusedon renewal energy and has established apresence at the pump in the US.Recent large acquisitions also reflectconfidence in the Russian market and inRussian brands. PepsiCo acquired Wimm-Bill-Dann, one of Russia’s two majordairy producers. Groupe Danone SA, theFrench company, formed a joint venturewith the country’s other major dairy brand,Unimilk. Late in 2011, Unilever bought amajority stake in Kalina, Russia’s leader inpersonal care and beauty.BRIC FOUNDATIONSTHE IMPORTANCEOF BRANDSConsumers in the BRIC countriesare more brand loyal comparedwith consumers in the US andWestern Europe. They alsoappreciate value, according toTGI research, which found thatmany agree with the statement,“It’s worth paying extra forquality goods.” Word of mouthis significantly more important inBRIC countries. People are morelikely to ask advice before makinga purchase, a behavior that couldreflect lack of experience withcertain merchandise or simply aninclination to conduct more diligentresearch before spending money.Europe 61Brazil 70Russia 72India 73China 72US 40475260394427
  26. 26. 26BrandZ™ Top 100 Most ValuableGlobal Brands 2012IndiaDiverseDifferentDeterminedIn India, many peoplewho drink cola prefera local brand. Sportsfans follow cricketrather than football. Andwhile brands matter,a brand’s reputationoften is closely linkedwith that of the parentconglomerate.In other words, as a consumer society,India is much the same as the rest ofthe world and also very different. Thisparadox informs the growing importanceofbrandsinarapidlytransformingsocietyof more than a billion people of diverselanguages, cultures and beliefs—a fewincredibly wealthy, others entering anexpanding middle class and many stillextremely poor.Marketing approaches that work in otherparts of the world are not automaticallyeffective in India where individuals at allincomelevelsarebeingexposedtobrandseither through travel, entertainment orthe increasing presence of global brandsin India. While desiring internationalbrands, Indians also are increasingly self-confident about their national identity.This duality, to an extent, depends onproduct category. In fashion, footwearand accessories—categories that exhibitpersonal taste or status—foreign brandsexert great appeal. When Indian heritageis a consideration—which also could bein fashion and accessories as well asfood and beverages—local provenancebecomes important both for domesticconsumption and export.Consumers also prefer local brands thatexcel at innovating and improvising tocreate products that precisely meet localneeds. This resourcefulness, considereda particularly Indian talent, is knownby the Hindi word Jugaad. In anothermarket characteristic unique to India,large conglomerates control much ofthe Indian economy, and consumertrust often depends on a combination ofcorporate and brand reputation.Conglomerates andgovernment influencebrand growthUsually run by powerful entrepreneurialfamilies, the leading conglomeratesinclude Tata, Reliance and Bharti. Theyoperate in multiple industries, suchas telecommunications, cars and retail,and market many of India’s leadingbrands. As in other BRIC countries,the government also influences therise of local brands with regulationsthat moderate the entrance of foreigncompanies.Early in 2012, India relaxed restrictionson single-brand retailers, enablingbrands such as Nike to expand morefreely. Walmart, and retailers that sellmultiple brands, must combine withan Indian partner and operate onlywholesale outlets. Walmart entered Indiain a joint venture partnership with Bharti.Tesco partnered with Tata.An effort to liberalize the Foreign DirectInvestment rules (FDI) failed during2011. The regulations are primarilydesigned to protect the estimated eightmillion mom and pop grocery stores inIndia. By entering India as wholesalers,rather than retailers, the big box multi-nationals became suppliers of the momand pops rather than their competitors.Because this is India, the preferredoutcome is not just one winner, butinstead a reconciliation of competinginterests that eventually produces moreopportunities. In this complicatedprocess, the multi-nationals gain marketexpertise from their local partners,while the partners learn from the multi-nationals and gain time to strengthentheir own retail brands. Meanwhile,anticipating the eventual end of theFDI regulations, all the major playersinvest in much needed improvementsto infrastructure including roads andrefrigeration for food.Fundamentals for brandbuilding in India1. Be meaningfully differentIndians generally like brands.And they are familiar with manybrands from the West and othermarkets. Success requires bringingsomething new and different.2. Be consistent in thoughtand executionThese qualities will help to buildtrust in the brand.3. Take into account theregional differencesMany countries are diverse. Butfew are as large and distinctive asIndia in language, diet, beliefs andcustoms.4. Emphasize fashion, ifpossibleFor some categories, such astelecoms, cars or banking, Indiansmight prefer an Indian brand. Whenit comes to fashion, however,international brands tick all theboxes.5. Remember it’s ademocracyIndia is the world’s largestdemocracy, which means thatworking underneath apparentchaos and slow process is asystem that respects the individualand attempts to fairly balancecompeting interests.
  27. 27. Understanding marketdiversity is keyPenetrating India also requiresunderstanding the country’s richdiversity. The local dairy brand Amul,formed as a farmer cooperative in 1946,is well regarded, for example, becauseit’s trusted and its products appealto the Indian palate. Similarly, thedominant cola brand in India is ThumsUp in part because of its somewhatspicy taste and its consistent positioningas a macho drink with a strong flavor.Coca-Cola purchased Thums Up in theearly 1990s.And as often is the case in fast growingmarkets, consumer product multi-nationals, such as PG or Unilever,introduced brands to India years ago.Unilever, for example, arrived as LeverBrothers in 1933. Since merging withan India company over 50 years agoit’s operated as Hindustan Unilever. Insome cases the multi-national brandsare so insinuated into the market they’reconsidered Indian. Maggie Noodles,popular in India and other Asian markets,is a Nestlé brand. The Maruti Suzuki car,one of the first popularly priced cars inIndia is seen as an Indian brand.The proliferation of local brands is mostevident in telecommunications where15 operators resist consolidation andbattle for a share of almost 900 millionmobile phone subscribers. The Indianbrands have done a relatively good jobof differentiating in a category wheretelecoms worldwide struggle againstbeing viewed simply as the commodityconduits of voice and data.One of the pioneer brands, Airtel, knownfor its network strength, appears in theBrandZ™ Top 100 ranking for the firsttime this year. Vodafone Essar focuseson customer care. Another brand, Idea,emphasizes value-added services andhas built awareness with advertising.Price competition heated up in thecrowded telecom sector last year whenTata DoCoMo lowered prices. Withextensive market penetration, thetelecom leaders are shifting their effortsfrom gaining new users to increasingper-user engagement and revenue.The change in part reflects growingconsumer affluence.Aspiration becomesa factorGreater prosperity also impacts thecar category, which is experiencingincreasing sales and brand segmentationboth at the high and low ends of themarket. Tata’s repositioning of its Nanobrand illustrates these developments.Tata introduced the Nano, in 2009, asan entry-level car for people transitioningfrom two-wheel to four-wheel vehicles.Marketing emphasized relative safetyand affordability. When sales flattenedafter an initial surge, Tata realizedthat customers liked the car but notits association with their limitedfinancial circumstances.Adding some amenities, Tata madethe car more aspirational. Customers,it seems, wanted a symbol of newpossibilities not a rearview reminder oftheir recent and limited past. The Tatabrand overall has benefited from theknowledge gained from its acquisition ofupscale Jaguar Land Rover, although themarketing for those brands has been lowkey so far. The rising Indian economycontinues to drive sales of other Indiancar brands, such as Mahindra.Exports are increasing, too, particularlyto Africa where the Mahindra brandexports its less expensive models. Tatatrucks are popular in Malawi. The Indianbrands best known internationally arethe IT giants Wipro and Infosys, whichprovide B2B solutions in most industrysectors, and ICICI Bank. A majorintegrated financial institution, withoffices worldwide, ICICI ranks in theBrandZ™ Top 100.ICICI competes with other growingIndian bank brands such as HDFC andAxis Bank.Even in banking, a global brand implies agreater sense of status than a local Indianbrand, generally. In practice, however,people in smaller, rural markets may findthat the Indian bank brand understandstheir needs more deeply. Andgovernment regulations may provideregulatory protection for the local brand.Amid all of these developments andapparent contradictions it’s important toremember they’re shaped by India’s longhistory and modern status as the world’slargest democracy.Fast Growing MarketsIndia2727Source: Global TGI research based onanalysis of 20-to-54 year-olds in the largestcities in BRIC markets and a countrywidesample in the US and Europe (UK, France,Germany, Spain)Age% of populationHousehold size% of population5125241527726223345461136674858536BRIC FOUNDATIONSDEMOGRAPHICSIndia is the most distinctiveBRIC country based on age andhousehold size. India is younger.Compared with the other BRICs,the US and Europe, India is theonly country or region wherethe majority of the population(51 percent) is 20-to-34 yearsold. Indian households arelarger. Almost half of the nation’shouseholds include more than fivepersons. Household size in theother BRIC countries more closelyresembles the US and Europe.BrazilRussiaIndiaChinaUSEurope1-2 persons3-4 persons5+ persons20-3435-54544456444951594162386139
  28. 28. 28BrandZ™ Top 100 Most ValuableGlobal Brands 2012ChinaChinesebrandsbenefit fromimprovedquality andsharp pricingChinese brands arecompeting moreeffectively.Severalfactorsdrivethiscompetitiveness.First, Chinese consumers have becomemore sophisticated about brands. Second,Chinese brands have improved in quality,leveraged their deep market knowledgeand maintained a price advantage.The growing strength of Chinese brandsis especially apparent in categorieswhere consumers discern no functionaldifferences between the multi-nationaland Chinese offerings, and the Chinesebrand is cheaper. Some multi-nationalbrands have operated in China for solong they’re well accepted. But longevityis no longer an adequate advantage.Critically, these changes are happeningas the focus of brand expansion shiftsto China’s interior cities and villageswhere consumer values—the preferencefor price and functionality over statusappeal—favors Chinese brands. Havingimproved functionality, Chinesebrands face the challenge of improvingemotional appeal.Even Chinese financial institutions andother large State Owned Enterprises(SOEs) now take branding moreseriously as they compete against eachother and expand abroad to marketswhere they are relatively unknown. Thisyear, 13 Chinese brands are included inthe BrandZ™ Top 100 Most ValuableGlobal Brands, more brands than theother BRIC countries combined and asharp increase since 2006 when only twoChinese brands appeared. New to theranking are Sinopec, the oil and gas giant,and Moutai, an alcoholic drink.Growing functional andemotional appealThe beer and spirits category illustratesthe ability of Chinese brands to cultivateemotional appeal. Moutai enjoys anemotional bond with Chinese consumersbased on heritage. Moutai is a brand ofbaijiu, the traditional Chinese alcoholicdrink distilled from sorghum andproduced in China for at least 2,000 years.Similarly, the Chinese beer Snowdistinguisheditselfinacategorywhererealdifferentiation is difficult. Although littleknown outside of China, Snow is one ofthe world’s most-consumed beers. Severalyears ago, the brand launched a marketingcampaign around the idea of adventurewith a campaign called Globe Trekker.As part of the campaign, selectedvolunteers have explored exotic locationssuch as Tibet’s Brahmaputra Canyon. Inthe summer of 2001, Snow produced oneof the largest digital campaigns in China.Global brewer SABMiller produces Snowin a joint venture with a local company,China Resource Enterprises.The Chinese dairy brand Yilicommunicates emotionally byemphasizing health and nutrition andemploying celebrities to differentiateitself from Mengniu, its chief competitor.In contrast, the detergent brand BlueMoon exemplifies the triumph offunctionality and price. It effectivelychallenges multi-national brands inChina, because it works and costsapproximately 30 percent less. Buildingon this reputation, the company isexpanding its product line to includesanitizer and other products.Fundamentals forbrand building in China1. Expect sophisticatedconsumersEducated by their increasedexposure to both overseasand domestic brands, Chineseconsumers, especially in the largecoastal cities, are becoming moredemanding and discerning in theirbrand expectations.2. Emphasize trustConsumers are looking for brandsthat combine innovation and trust,qualities increasingly found inChinese products as the countrybegins to market as well asmanufacture brands.3. Understand the nuancesof the youth marketChina’s young people are avidconsumers and eager to obtaingreater material success than theirparent’s generation. But they’renot a monolithic purely materialisticgroup. With growing affluencemany feel a greater sense of socialresponsibility.4. Find customers usingsocial mediaChina’s Internet is more fragmentedthan in most countries. WhereFacebook or Twitter may dominatetheir sectors in certain countries, inChina several different brands willoffer the equivalent services. Reachingconsumers requires knowing they canbe found in many places.5. Use a media mixMobile is quickly becoming thepreferred way many Chinesepeople, particularly the young,access information especially withthe growing popularity of 3G smartphones. But people still spend a lotof time with traditional media, suchas TV, which can’t be ignored.BrandZ™ Top 100 Most ValuableGlobal Brands 2012
  29. 29. Fast Growing MarketsChina29Brand building crossesbordersChinese brands are slowly growingtheir export sales. In the initial stagesof establishing brands for export, brandswith Chinese heritage enjoyed thegreatest success as they connected withcommunities of Chinese people livingoutside of China. Moutai, for example,enjoys success outside of China.Along with beer and spirits brands,traditional Chinese medicines also havereached overseas consumers, primarilyin Chinese ex-pat communitiesbut increasingly among the generalpopulation interested in wellness andherbal remedies. Among the better-known brands is Tong Ren Tang, whichwas established in 1669, at the beginningof the Qing Dynasty.Many Chinese technology companieshave prospered as OEMs (OriginalEquipment Manufacturers), creatingproducts for major brand marketers fromthe West. Some of these companies nowattempt to leverage their vast knowledgeto market their own brands and enjoyhigher margins. A few technology brands,such as Lenovo, already have achievedhigh brand recognition outside of China.Established as a small electronics supplier,called Legend Group Holdings in 1984,Lenovo today is one of the world’s largestproducers of PCs. It launched the Lenovobrandin2003,andtwoyearslateracquiredIBM’s Personal Computing Division.Haier, one of China’s largest homeappliance brands, is a world leader inwhite goods. Established as a refrigeratormanufacturer in 1984, the brand now sellsits refrigerators, washing machines, airconditioners and other products throughleadingmassmerchantsintheUSandEurope.Midea also manufactures air conditioners andhousehold appliances that it marketsworldwide. Rival Gree specializes in airconditioners and markets globally.The sports apparel brand Li-Ningexperienced difficulty in the domesticmarketlastyearbut,determinedtobuildthebrand overseas, Li-Ning signed a deal withthe Finnish L-Fashion Group to establishthe brand in Europe and it launched awebsite in the US to aggressively marketthe brand using e-commerce.SOEs build brandsEven the large SOEs are engaging inbrand building to facilitate increasedoverseas expansion. Until recently, theseenterprisesplacedlessattentiononbrandbecause they enjoyed monopolisticdominance. But as China’s economychanges, many of these banks, insurancecompanies, telecoms, and oil and gasgiants compete against each other andalso seek growth outside of China.In May 2011, ICBC (Industrial andCommercial Bank of China) receiveda license to open a branch in Mumbai,and it recently established a presence inKarachi, Islamabad and Canada and alsoaspires to grow in Russia, the MiddleEast and Latin America. ICBC is theworld’s most valuable financial brand,ranking 13 in the BrandZ™ Top 100.China’s major oil and gas companies—Sinopec and PetroChina—engage inbrand building to help establish importantrelationships as they expand abroad andalso to build credibility domestically.Sinopec, which operates China’s largestnetwork of gas stations, sponsors majorevents including Formula One racing.For COFCO, a large, multi-brand foodconglomerate, domestic marketing isimportant, not to raise the corporateprofile, but to promote its brands,which include category leaders such asFulinmen, a producer of cooking oil andrice, and Great Wall wine.Western brands dominatesome categoriesIn some categories, such as cars, Chineseconsumers view local brands as lowerquality than the Western brands. Whilethe Chinese government initiallysupported production of Chinese autobrands at the entry level, Chinese autobuyers typically want to trade up.Multinational carmakers, such as Audi,GM, Ford and VW enjoy prominencein China through their joint venturepartnerships with Chinese manufacturers.Because most of the production for theseWestern brands happens in China, manyChinese consumers view these cars asChinese. VW became familiar becauseof its use as taxis. Audi comprises alarge share of government officialvehicle fleets.Source: Global TGI research based onanalysis of 20-to-54 year-olds in the largestcities in BRIC markets and a countrywidesample in the US and Europe (UK, France,Germany, Spain)“I enjoy spending timewith my family”% who agree“I am very good atmanaging money”% who agree68737783 84RussiaIndia ChinaUS EuropeBrazilBRIC FOUNDATIONSVALUES ANDATTITUDESWhile it’s important to understandthe unique aspects of eachcountry, it’s also necessary tofind the areas of commonality.People in all of the BRIC countriesshare roughly the same values asinhabitants of the US and Europeregarding the centrality of familyand the ability to manage theirmoney. In related research, TGIalso found that people acrosscountries and regions affirmed theimportance of lasting relationshipsand said that time was moreimportant than money.75BrazilRussiaIndiaChinaUSEurope544869 6044 59
  30. 30. 30BrandZ™ Top 100 Most ValuableGlobal Brands 2012ReadersDigestIssue01ReadersDigestIssue02ReadersDigestIssue03ReadersDigestIssue04ReadersDigestIssue05The total value of the2012 BrandZ™ Top 100Most Valuable GlobalBrands rose marginallylast year by 0.4 percentto $2.4 trillion, asa perfect storm ofeconomic stress,political uncertaintyand natural disastersaffected brands acrosscategories.30BrandZ™ Top 100 Most ValuableGlobal Brands 2012Overview
  31. 31. – The insurance category experiencedthe sharpest decline, 16 percent,in part because of the exposure tocatastrophes including the tsunami inJapan and flooding in Thailand.Other factors impacting brand valueincluded the BRIC slowdown, Europe’sdebt crisis, political uncertainty in the USand the erosion of trust culminating in theOccupy Wall Street movement.Despite this challenging context, thestrong performance of many brands acrossdiverse categories pointed to the continuingimportance of brand and a steadyappreciation of brand value. During thepast six years, between 2006 and 2012, thetotal value of the BrandZ™ Top 100 MostValuable Global Brands rose 66 percent.Brand powermade a differenceStrong brands enabled companies toendure continued economic weaknessand thrive in the transition to recovery.With brand value increases of 31 percentand 26 percent, respectively, HomeDepot and IKEA were among theTop Risers based in part on the steadyhousing recovery, at least in the US.Audi became a Top Riser, with a brandvalue increase of 23 percent, andVolkswagen appeared in the BrandZ™Top 100 for the first time. Both car brandsexperienced strong growth worldwide—in the recovering US, slowing China andstruggling Europe.Recognizing the power of their valuablebrands, several organizations took stepsto assert control over this critical asset.Apple announced, early in 2012, that itwould spend cash reserves to buy backshares. Ralph Lauren, Hugo Boss andCalvin Klein took steps to increase thenumber of brand-owned stores andreduce franchises. Burberry allowedcertain licenses to expire. Ralph Lauren,Hugo Boss and Burberry were Top Risersin brand value, with Ralph Lauren up 51percent. Calvin Klein appeared in theapparel ranking for the first time.Even organizations that developedas government owned or controlledbureaucracies increasingly recognized theimportance of brand as they faced newcompetitorsathomeandexpandedabroad.Once a staid Russian financial institution,Sberbank was among the Top Risers,Almost half of the Top100 brands lost value.Brands last declinedthis broadly during thedepths of the 2009global recession.But financial performance, not brand,was the more critical determinant for 35of the 49 brands that declined.Brand Contribution—the measurementof brand strength exclusive of financialsor any other factors—generally remainedstable or increased for most brands andprovided the buoyancy to navigate theyear’s turbulence.One in five of the 2012 BrandZ™ Top100 brands came from a fast growingeconomy. But the total value of thosebrands slipped slightly for the first timeto $330.8 billion because of the businessslowdown in Brazil and China.The number of fast growing economiesrepresented in the BrandZ™ Top 100Most Valuable Global brands expanded,however, with the appearance of the firstbrand from Africa, the South Africantelecom MTN.In addition, two Chilean retailers,Falabella and Sodimac, made the list ofleading retailers. And on the strengthof its business in fast growing Asianeconomies, Commonwealth Bankbecame the first Australian brand in theBrandZ™ Top 100.Brand value fluctuations in the 2012BrandZ™ ranking were spread evenlyacross the 13 categories covered. Sixcategories rose in value and six declined.The financial category remained evenwith last year.– Technology brands again dominated,comprising 30 percent of BrandZ™Top 100 total value. Apple, IBM,Google and Microsoft occupied fourof the top five positions (McDonald’swas the exception).– The three categories that grew mostin brand value—luxury, fast food andapparel—revealed an underlyingconsumer determination to spend onbrands, but to spend wisely for qualityand value.Top 100Overview31Source:The strong grow strongerTHE IMPORTANCEOF BRANDSTRONG BRANDSGROW IN VALUEThe Top 10 brands in theBrandZ™ Top 100 Most ValuableGlobal Brands added almost $500billion in value over the past sixyears. Some of the growth, butnot all, reflects the remarkablerise of leading technology brands.The larger lesson is that strongbrands continue to grow in value.Although the bottom 10 brandsof the BrandZ™ Top 100 didnot increase as much value inabsolute terms, they doubledin value.$892bn$83bn$409bn$46bn20122006VALUE OF TOP 10 BRANDSVALUE OF BOTTOM 10 BRANDS
  32. 32. 32BrandZ™ Top 100 Most ValuableGlobal Brands 2012Technology brandsexpanded influenceIn a series of acquisitions andcollaborations between technologycompanies and telecoms, brands formedecosystems to leverage each other’scompetence in content creation, digitaldevices and delivery systems. Googlepurchased Motorola Mobility andMicrosoft formed a partnership withNokia. Apple and Amazon continued todevelop their own ecosystems.These changes reflected technology’sincreased centrality in all aspects ofconsumer life. Collaborations producedsmart phones and smart homes and smartcars, which provided for the mass-marketsafety and comfort features previouslyreserved for luxury. The technology andtelecom categories comprised about one-third of the brands in the 2012 BrandZ™Top 100 but they accounted for 44percent of the value.IBM, which celebrated its centenniallast year, increased 15 percent in value,maintaining its position as the leadingB2B technology brand and ascendingfollowing a redesign of its branches anda business refocus toward the customer.The bank also completed a major strategicacquisition in Eastern Europe.Changed spendingattitudes touched brandsChanging customer attitudes affectedmost categories and brands, as spendingshifted to more considered—rather thanconspicuous—consumption. Peoplebought luxury again. In fact, the categoryrose 15 percent in brand value. Butappreciation of craft and enduring qualitybecome almost as important as bling.Similarly,inpersonalcare,shoppersspentmoney to look good even in bad times,perhaps especially in bad times. But theysought added functional benefits, drivenmore by a desire to maintain their ownhealth and wellness than the need toimpress others. Although the personalcare category declined slightly overall,certain brands appreciated significantly.Clinique rose 43 percent in brand value.Consumers also expressed a growingdesire for intrinsic quality, but reluctanceto pay for badge premium. Korean brandHyundai appeared for the first time inthe car category ranking. Improvementsboth in production and design, pluscompetitive pricing, enabled Hyundai tochallenge competitors at all model levels,including luxury. This pursuit of value inpart explains the success of apparel brandsZara and Uniqlo, which appreciated 22percent and 26 percent, respectively.Empowered by technology, especiallythe rise of mobile, consumers alsoinfluenced changes in shopping and thecustomer-brand relationship. Attemptingto connect with shoppers all the time andanywhere on the elusive path to purchase,merchants and brands added anotherword to the retail lexicon—omni-channel.Constantly present in social media, brandsand retailers used incentives offered onmobile apps to convert in-store shoppersinto customers. Retailers added flexibledelivery options—in-store pick-up orhome delivery—to build loyalty. EvenAmazon experimented with pick-uplocations to supplement its virtual realitywith a bricks and mortar presence.32BrandZ™ Top 100 Most ValuableGlobal Brands 2012Source: Millward Brown Optimor,BrandZ™ Data10 years:Brand more influentialTHE IMPORTANCEOF BRANDSTRONG BRANDSDRIVE SALESThe importance of brand inconsumer purchasing decisionsincreased significantly of thepast decade, while the influenceof price declined. In interviewsconducted in 31 countries, 59percent of consumers now saythat brand alone is an importantpurchasing determinant,compared with only 7 percentwho say that price alone isimportant. The rise of brand andthe decline of price in purchasingdecisions have produced awidening gap. The preference forbrand alone remained strong evenduring the recession. Price alonerarely drives sales.59%7%43%16%20112002PRICE ALONEBRAND ALONEZara and Uniqloappreciated22% and 26%Chinese sales drovethe rise of KFC andEstée Lauder
  33. 33. to Number 2 in the BrandZ™ Top100 ranking. IBM’s performancedemonstrated the resilience of a brandthat pioneered the mainframe andadapted to the cloud age, and it affirmedthe possibility of building a strong brandin the B2B space.Many B2B brands attempted to simplifytheir office technology to make itresemble the simpler at-home consumerexperience. In B2C, and at the formativeend of brand lifecyle, eight-year-oldFacebook grew 74 percent in brandvalue, making it the fastest riser, as itprepared for an Initial Public Offering(IPO). The ubiquity of technology alsoraised consumer concerns about privacyand other practices. Consumers focusedthe same kind of scrutiny on technologybrands that they usually reserved forbanks and other major institutionsBRIC slowdownwas relativeAlthough fast growing economies slowed,growth remained relatively strong incertain categories. Revenue from Chinacontributed to the 16 percent valueincrease of the cosmetic brand EstéeLauder. China results also drove the riseof KFC, which appeared in the BrandZ™Top 100 ranking for the first time.Even as a few BRIC brands droppedfrom the BrandZ™ Top 100 othersappeared, including Sinopec, theChinese oil and gas brand, Moutai, thebrand of traditional Chinese alcohol andthe Indian telecom Airtel.And brands from other fast growingeconomies entered the BrandZ™ranking. The South African entry MTN,a telecom, operates throughout Africaand the Middle East. The Chilean brandFalabella is the largest retailer in SouthAmerica, with a portfolio of departmentstores and specialists that includethe other Chilean brand new to theBrandZ™ rankings, Sodimac, the homeimprovement chain.In a challenging year, when theBRICs decelerated somewhat, thesedevelopments are a reminder that fastgrowing economies remain a key driverof sales and brand value growth.Top 100Overview33BrandZ™ portfoliocontinues to outperformthe marketTHE IMPORTANCEOF BRANDSTRONG BRANDSOUTPERFORMTHE SP 500Over the past six bumpyeconomic years, the SP wasdown more than it was up andappreciated only 4.5 percent. Incontrast, the BrandZ™ portfolioincreased by 46.3 percent. Likethe SP 500, the BrandZ™portfolio comprises a diversegroup of public companies. TheBrandZ™ portfolio companiesare the strongest brands inthe BrandZ™ ranking. Thecomparison between the twoportfolios shows that strongbrands outperform the stockmarket benchmark by a widemargin—103 percent.37.5%0.4%60%30%-30%-60%0%20122006 2009SP 500BrandZ™ PortfolioTechnology andTelecoms forgedcollaborationsIndian and SouthAfrican telecomsAirtel and MTN roseto the Top 100Audi became a Top Riser,up 23%, as Volkswagendebuted in the Top 100Source: Bloomberg, Millward BrownOptimor, BrandZ™ Data
  34. 34. 34BrandZ™ Top 100 Most ValuableGlobal Brands 2012# Category Brand Brand Value2012 ($M)BrandContribution IndexBrandMomentum Index% Brand ValueChange 2012vs 2011RankChange1 Technology 182,951 4 10 19% 02 Technology 115,985 4 5 15% 13 Technology 107,857 4 5 -3% -14 Fast Food 95,188 4 8 17% 05 Technology 76,651 4 8 -2% 06 Soft Drinks * 74,286 5 7 1% 07 Tobacco 73,612 3 7 9% 18 Telecoms 68,870 3 5 -1% -19 Telecoms 49,151 3 7 15% 410 Telecoms 47,041 4 9 -18% -111 Conglomerate 45,810 2 5 -9% -112 Telecoms 43,033 3 6 -1% 013 Financial 41,518 2 9 -7% -214 Financial 39,754 3 3 8% 215 Financial 38,284 4 9 34% 516 Logistics 37,129 5 8 4% 117 Retail 34,436 2 5 -8% -218 Retail 34,077 3 10 -9% -419 Technology 33,233 3 10 74% 1620 Telecoms 26,837 3 2 -10% -121 Luxury 25,920 5 8 7% 522 Technology 25,715 3 5 -1% 123 Cars 24,623 4 5 10% 724 Financial 24,517 2 4 -4% 025 Technology 24,326 5 10 8% 4Brand Contribution measures the role brand plays in driving earnings on a scale of 1 to 5 (highest).Brand Momentum measures the prospects for future earnings on a scale of 1 to 10 (10 highest).* The Brand Value of Coca-Cola includes Lights, Diets and Zero** The Brand Value of Budweiser includes Bud LightBrandZ™ Top 100 Most Valuable Global Brands 2012
  35. 35. Top 100Overview35# Category Brand Brand Value2012 ($M)BrandContribution IndexBrandMomentum Index% Brand ValueChange 2012vs 2011RankChange26 Technology 22,898 3 3 -35% -827 Technology 22,529 2 5 -16% -528 Cars 21,779 3 5 -10% -129 Financial 20,759 4 8 53% 3130 Financial 20,198 4 3 18% 1031 Financial 19,313 3 3 -14% -332 Luxury 19,161 5 8 61% 3933 Personal Care 19,055 5 7 -4% -134 Oil Gas 18,315 1 7 8% 735 Baby Care 18,299 5 7 -5% -136 Retail 18,007 4 9 -18% -537 Technology 17,992 4 8 19% 1538 Financial 17,867 2 4 6% 539 Oil Gas 17,781 1 3 17% 1240 Financial 17,225 4 3 0% -141 Telecoms 17,113 2 4 -37% -2042 Fast Food 17,072 4 9 43% 3043 Entertainment 17,056 3 8 -1% -544 Apparel 16,255 4 9 17% 1345 Technology 16,118 3 5 4% 446 Cars 16,111 4 4 5% 447 Telecoms 15,981 3 6 3% 148 Beer ** 15,882 4 6 0% -349 Technology 15,633 2 5 12% 950 Telecoms 15,351 2 3 -13% -14Source:(including data from BrandZ™, Kantar Worldpanel, and Bloomberg)
  36. 36. 36BrandZ™ Top 100 Most ValuableGlobal Brands 2012BrandZ™ Top 100 Most Valuable Global Brands 2012# Category Brand Brand Value2012 ($M)BrandContribution IndexBrandMomentum Index% Brand ValueChange 2012vs 2011RankChange51 Personal Care 14,948 4 7 5% 452 Fast Food 14,843 4 8 4% 253 Insurance 14,587 3 9 -25% -2054 Financial 14,561 4 3 -14% -1255 Technology 14,164 3 9 16% 1256 Oil Gas 13,940 1 10 N/A New57 Personal Care 13,773 4 5 -12% -1158 Apparel 13,485 2 7 4% 459 Technology 13,317 2 7 -18% -1560 Financial 13,083 3 7 N/A New61 Financial 12,982 2 6 -26% -2462 Retail 12,968 2 5 31% 2763 Financial 12,665 2 2 -15% -1064 Retail 12,662 3 8 18% 1865 Cars 12,647 3 3 -11% -966 Apparel 12,616 3 3 22% 2067 Soft Drinks *** 12,598 4 4 -3% -468 Oil Gas 12,105 1 10 7% 1069 Alcohol 11,838 3 8 N/A New70 Logistics 11,723 4 9 0% 371 Telecoms 11,531 3 8 N/A New72 Financial 11,488 3 2 9% 1273 Technology 10,676 2 3 -11% -374 Financial 10,649 3 5 25% 2575 Oil Gas 10,560 1 5 -21% -14*** The Brand Value of Pepsi includes Diets**** The Brand Value of Red Bull includes sugar-free and Cola***** The Brand Value of Sony includes Playstation 3
  37. 37. Top 100Overview37# Category Brand Brand Value2012 ($M)BrandContribution IndexBrandMomentum Index% Brand ValueChange 2012vs 2011RankChange76 Retail 10,506 3 4 -16% -1177 Oil Gas 10,424 1 3 -17% -1378 Insurance 10,174 3 9 -3% 579 Financial 10,064 2 1 -16% -1080 Soft Drinks****9,984 3 6 8% 1381 Cars 9,853 2 6 -2% 782 Financial 9,760 2 1 -38% -3583 Financial 9,627 2 3 -4% 484 Telecoms 9,572 3 8 -18% -985 Telecoms 9,553 3 5 -12% -586 Technology ***** 9,444 4 4 -10% -187 Retail 9,310 2 6 1% 788 Telecoms 9,273 3 8 N/A New89 Retail 9,206 3 9 26% New90 Telecoms 9,191 3 9 -4% 191 Fast Food 8,852 3 8 8% New92 Financial 8,644 3 3 -28% -2493 Oil Gas 8,599 1 8 6% New94 Telecoms 8,562 2 3 -27% -2095 Financial 8,546 3 2 -25% -1896 Cars 8,519 3 6 15% New97 Telecoms 8,449 3 6 -27% -2198 Retail 7,836 3 5 -43% -3999 Insurance 7,813 2 5 -7% New100 Logistics 7,601 3 5 N/A NewSource:(including data from BrandZ™, Kantar Worldpanel, and Bloomberg)

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