America, the World, and the New Challenges for Global Brands

Tom MillerManaging Director, Centers of ExcellenceNOP World

How the World Sees America Today

What’s Changed Since the 1990s

Americans Themselves: A Greater “Disconnect”

Is America in Tune with the World’s Values?

So What? The Impact on US Brands

The New Challenges for Global Brands

Presentation to Cover:

National sample (North America 17%; West Europe 17%)

National urban (Developed Asia 10%; Central Europe/Middle East 8%)

National urban w/o lowest SES (Developing Asia 30%;Latin America 11%; Other markets 6%)

Representative of 1.3 billion consumers worldwide

Listening to 30,000+ consumers worldwide since 1995—1,000 1-hour+ interviews per country with people aged 13-65

Roper Reports™ Worldwide 2004

How the World Sees America Today

What Are Personal Values?

Rene Magritte: “Personal Values”

“The things that act as the guiding principles in

your life and give meaning to your life”

or

Whateveris

importantto you

American Culture:Wealth, Power, Freedom, Fun% who attribute listed value as important to American culture (base: value is extremely/very important to them)

Wealth 90%Power 88Enjoying life 88Freedom 87Having fun 87Pleasure 84Status 83Ambition 83Health and fitness 83Material security 83Knowledge 83

Total Population Weighting

% who do not attribute listed value as important to American culture (base: value is extremely/very important to them)

American Culture:Not Modesty, Tolerance, TraditionAmerican Culture:Not Modesty, Tolerance, Tradition

Modesty 49%Simplicity 47Tradition 43Social tolerance 41Traditional gender roles 41Thrift 41Respecting ancestors 40Enduring love 38Spirituality 37Obedience 36Stable per relationships 35Faith 34Honesty 33Equality 33

Total Population Weighting

Venezuela 84%Taiwan 80Philippines 79Brazil 76Australia 75Hungary 75South Africa 75India 74Korea 74Japan 73Poland 72Mexico 72Russia 72Thailand 72

Countries Most Aligned With American CultureCountries Most Aligned With American Culture% who attribute their values as important to American culture (base: value is extremely/very important to them)

72% USA

Countries Least AlignedWith American CultureCountries Least AlignedWith American Culture

Singapore 71%Hong Kong 70China 70Argentina 70Indonesia 68Canada 68Czech Republic 66U.K. 65Sweden 63Italy 63France 63Spain 59Turkey 57Saudi Arabia 55Germany 55Egypt 55

% who attribute their values as important to American culture (base: value is extremely/very important to them)

72% USA

What’s Changed Since the 1990s

World’s Perception of America: More Power, “Striver” Values

20041999WealthFreedomSexHaving funA varied lifeHealth & fitnessEnjoying lifeAdventurePowerSelf-relianceMaterial securityInternationalismKnowledge

WealthPowerEnjoying lifeFreedomHaving funPleasureStatusAmbitionHealth & fitnessMaterial securityKnowledgeSelf-relianceSex

Based on consistent values set and total population weighting (1999/2004)

Top values attributed to American culture (base: values extremely/very important)

Most Notable Declines: Internationalism, Altruistic Values Drop

Based on consistent values set and total population weighting (1999/2004)

1999 Rank 2004 RankChange in Rank

Internationalism 11 29 -18Equality 28 42 -14Excitement 14 27 -13A varied life 5 17 -12Adventure 6 16 -10Curiosity 16 26 -10Sex 3 13 -10Justice 26 35 -9Social tolerance 43 52 -9Social stability 33 41 -8Individuality 17 24 -7Open-mindedness 24 30 -6Preserving the environ. 30 36 -6

Change in rank of values attributed to American culture (base: value is extremely/very important)

Values Alignment: Shifts from 1999

Change in Rank from 1999

1 Venezuela 92 Taiwan 33 Philippines 194 Brazil 215 Australia 26 Hungary 07 South Africa 28 India 169 Korea 4

10 Japan -611 Poland 712 Mexico 1613 Russia -1114 Thailand -11

2004 RankChange in Rank

from 199915 USA -1416 Hong Kong 017 China -918 Argentina 519 Canada -420 Indonesia -321 Czech Republic -922 U.K. -823 France -224 Italy -525 Spain -526 Turkey 127 Saudi Arabia -128 Germany -17

2004 Rank

Change in rank (1999 v. 2004): % of total values attributed (by listed country) to American culture (base: total values that are extremely/very important to country)

Americans Themselves: A Greater Disconnect

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Americans AssociatingFewer Values with Their Own Culture

Total Population Weighting

% Americans who attribute listed value as important to American culture (base: value is extremely/very important to them)

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Americans AssociatingFewer Values with Their Own Culture

Total Population Weighting

% Americans who attribute listed value as important to American culture (base: value is extremely/very important to them)

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Holding Steady: Power, Freedom, Fun, Family % Americans who attribute listed value as important to American culture (base: value is extremely/very important to them)

Total Population Weighting

Unemployment 5.7%

Then and Now: Disconnect Explained?

Unemployment 4.1%

1999 2004

13% concerned about recession and unemployment 27% concerned about

recession and unemployment

34% now is a good time to buy26% now is a good time to buy

KYOTO AGREEMENT

KYOTO AGREEMENT

Corporate Trust?

Is America in Tune with the World’s Values?

Top Global Personal Values

Protecting the family 69%Honesty 61Health and fitness 57Friendship 51Self-esteem 49Freedom 49Knowledge 49Justice 49Self-reliance 47Stable relationships 43Enduring love 43

% global respondents saying value is extremely/very important

91 91 90 89 89 88 87 86 86 84

72 72 6963 62 60 59

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Protecting the Family: Muslim Nations Disagree

Global Average 76%U.S. Average 84%

% who attribute protecting the family as important to American culture (base: protecting the family is extremely/very important to them)

Top 10 and bottom 10 countries

78 7673 70 69

66 65 64 61 61

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Global Average 54%U.S. Average 60%

% who attribute honesty as important to American culture (base: honesty is extremely/very important to them)

Honesty: Western Europe, Middle East Say “No”Honesty: Western Europe, Middle East Say “No”

Top 10 and bottom 10 countries

97 95 94 94 94 93 93 91 91 9186 84 84 82 80 80 79 79 77

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Global Average 87%U.S. Average 90%

% who attribute freedom as important to American culture (base: freedom is extremely/very important to them)

Freedom: Definitely Seen as an American ValueFreedom: Definitely Seen as an American Value

Top 10 and bottom 10 countries

90 8783 82 79 78 76 76 76 75

64 63 61 59 58 56 55

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Global Average 67%U.S. Average 73%

% who attribute justice as important to American culture (base: justice is extremely/very important to them)

Justice: Middle East, Western Europe Less AlignedJustice: Middle East, Western Europe Less Aligned

Top 10 and bottom 10 countries

So What? The Impact on US Brands

In 2002, Awareness and Use ofMany Global Brands Were Rising

©2002 RoperASW

7Some Brands Increased More Than Others from 2001 to 2002

Familiarity

CNN (+9 pts. since ‘01)

Mercedes (+6)

Discovery Channel (+5)

Nike (+5)

Samsung (+5)

BMW (+4)

MTV (+4)

McDonald’s (+4)

Ford (+4)

Volkswagen (+4)

Microsoft (+4)

Own/Use/Watch

McDonald’s (+9 pts. since ‘01)

Panasonic (+8)

Nokia (+7)

Discovery Channel (+6)

CNN (+6)

MTV (+5)

Microsoft (+5)

Disney (+5)

Nike (+4)

Sony (+3)

Familiar Use/Own/Watch

15.8

16.5

3.7

4.3

Change from ’01 to ’02*

*Among brands consistent between 2001 and 2002

In 2003, Consumers Were More Hesitant

Average number of brands familiar with*

2002 2003

17.4 17.6

Average number of brands own/use/watch

2002 2003

4.6 4.5

Average number of brands “really like”

2002 2003

5.5 5.9

*Among brands consistent between 2002 and 2003

And Now, Global Brands Have Started to Decline Slightly

Average number of brands familiar with*

2003 2004

18.6 18.3

Average number of brands own / use / watch

2003 2004

4.9 4.8

Average number of brands ‘really like’

2003 2004

6.0 5.8*Among brands consistent between 2003 and 2004

2003 2004

Familiar with American Brands 59% 57%

Familiar with non-American Brands 70% 69%

Like American Brands 30% 29%

Like non-American Brands 36% 36%

Use American Brands 30% 27%

Use non-American Brands 24% 24%

Global Brand “Fundamentals”

Using a consistent set of 15 American brands and 13 Non-American brands between 2003 and 2004

A Brand I Trust

2003 2004

American Brands 36% 35%

Non-American Brands 48% 47%

Coca-Cola 55% 52%

McDonald’s 36% 33%

Nike 56% 53%

Microsoft 45% 39%

Using a consistent set of 14 American brands and 11 Non-American brands between 2003 and 2004

A Brand Associated with Honesty

2003 2004

American Brands 18% 15%

Non-American Brands 19% 16%

Coca-Cola 18% 15%

McDonald’s 19% 14%

Nike 14% 11%

Microsoft 18% 12%

Using a consistent set of 14 American brands and 11 Non-American brands between 2003 and 2004

Growth in “fundamentals” has stalled, even declined New opportunities arising for local brands, especially in

rapidly-growing markets like India, China

American brands: a period of reassessment? Worsening attitudes toward US culture could have impact

in the marketplace

Basic attributes necessary for brand greatness remain Quality, reliability, value, of course Trust, honesty possibly more important than ever

Change in the balance of “glocal” strategies?

New Challenges for Global Brands

Thank You