Best Global Brands 2008 Briefing DRAFT - Miguel Santesmases. informe marcas globales... · 33 |...

1 | Presentation Title | Client Name | September 15, 08

Best GlobalBrands 2008

League table analysis

2 | Best Global Brands | 2008

Agenda

1. Top 10 Brands

2. 2008 Risers

3. 2008 Fallers

4. New entrants

5. Breakdown by country and industry

6. Key Insights

Strong brands grow in weak economies

• The Red Thread

• Being a brand leader

Sustaining the value of green

Emerging markets

• Building brands

• The role of luxury brands

7. Our approach and experience

• The business purpose for brand valuation

• The methodology

• Our history

8. More insight from the Best Global Brands 2008 magazine


1. Economic performance of theBest Global Brands

Top 100 Best Global Brands vs. MSCI World Indexand S&P 500 performance

Interbrand Top 100 Portfolio

MSCI World Index

S&P 500 Index

BGB Portfolio MSCI World S&P 500

Annual Average Return 4.73% 0.05% -0.92%

Standard Deviation 14.76% 18.02% 15.36%

Sharpe Ratio 0.07 0.00 -0.06



2. Top 10 Brands


Top 10 brands

2. 2008 Risers


2008 risers



• GOOGLE. Google is the undisputed king of theinternet world and the last year has seen it gaineven more ground against rivals. Innovations likeGoogle Mobile, Google Docs & Spreadsheets andGoogle Book Search extend the brand’s reach andubiquity and make it an increasingly important partof our everyday lives.

• Yet these projects wouldn’t be possible without itscore business – 99% of its revenues come fromadvertising on its search result pages. Google’smeteoric rise from small start-up to corporatebehemoth is not without its critics. As it becomesmore powerful, the brand is forced to constantlytiptoe around the ever changing landscape ofprivacy and copyright laws. Google is increasinglytested by its unofficial corporate motto:“Don’t be evil.”

(+43%)

10 | Best Glboal Brands | 2008

• APPLE. Can anything slow the ascent of Apple? Itsability to identify new customer needs and deliverproducts of beautiful simplicity and desirabilitycontinue to put it in a league of its own. The latestiPods, iPhone and MacBook Air strike the perfectbalance between coolness and mass appeal, whilethe in-store Apple Genius bars shift consumerexpectations of what after sales service should be.Add to that the improved company stance onsustainability and Mr. Jobs and co. really do seemto be ticking all the boxes right now.

(+24%)


(+19%)

• AMAZON.COM. The world’s biggest bookstore getsbigger, largely due to a shift in focus away frombooks. Amazon is fast becoming a super-mall,selling everything from toys, jewelry, clothes, andelectronics alongside its core offering of books, CDs,DVDs and games. Recent innovations include theKindle (a wireless e-book reading device), AmazonMP3, DRM free music downloads, Checkout(Amazon’s own online payment system to rivalPayPal) and the successful Amazon Prime unlimitedfree shipping service, which encourages repeatcustom. Behind the scenes Amazon’s web-servicesoffering gives 330,000 developers access to some ofAmazon’s technology in exchange for a fee.


• ZARA. Having expanded into eight new territories inthe last two years, Zara is now a truly global force,with operations in 72 countries. It owes its status asthe master of impulse shopping to its truly originalbusiness model. The retail stores are not just theend of a highly efficient supply chain, they are thebeginning of the design process. Design input comesfrom market specialists and buyers as well asdesigners, so its fast fashion is directly customer-driven. The weekly rollout of new stock gives peoplea reason to visit more regularly than most outlets,and the price point makes spontaneous purchasehighly likely. How do you buck a downward trend?Give the people what they want.

(+15%)


• NINTENDO. In just a few short months, Nintendopulled off something the gaming industry had beenstruggling to do for years – widen the market. Withthe phenomenal success of the Wii and DS consoles,Nintendo has fuelled the acceptance of video gamesas a form of entertainment for all age groups andgenders, giving the games console a legitimate placein the living room and people’s hearts. Innovationcontinues to drive the brand as new concepts, suchas Wii Fit and the Brain Training series, push theboundaries of what video games can be and theways in which people can engage with them.

(+13%)



3. 2008 Fallers


2008 fallers


• FORD. Despite recent changes to the productportfolio, Ford has struggled to convince consumersthat it does more than just produce big cars with bigengines. This is a problem of momentum – havinginvested heavily in owning the big-truck space in thepast, it’s taking time to shift its image. This isn’thelped by negative media coverage on thecompany’s performance, undermining confidence inthe brand with internal and external audiences. Fordhas started the change process and is producingsmaller vehicles in the US, but needs tocommunicate with customers and employees to re-establish its reputation.

(-12%)


• CITI. It’s no surprise that the US credit crunch hasleft a dent in the brand value of most financialservices brands, but Citi is one of the worst affected.Negative news continues to plague the brand morethan a year after the credit crisis began. It has beenone of the more high-profile sufferers, being forcedto announce eye-watering losses and cut thousandsof jobs. New CEO, Vikram Pandit, has taken boldsteps to refocus the business on its core areas,which has resulted in the closure of manyunprofitable branches and the sell-off of someglobal operations.

(-14%)


• MORGAN STANLEY. Morgan Stanley lost a lot ofground this year and will need to work hard toreclaim its position. Like many of its competitors,the bank has been involved in a class-action suitwith shareholders outraged by its delay in disclosingthe level of its exposure to mortgage-backed-securities in the US. Economic crisis aside, the brandis attempting to re-build trust by focusing on itsillustrious heritage.

(-16%)


• GAP. When it comes to fashion retailing, the middleground has always been a battleground, and latelyyou’d be forgiven for thinking that GAP has been onthe losing side. Despite a slow increase in profits,thanks largely to cost-cutting, worldwide sales are indecline as budget-conscious consumers trade downor are lured away by more appealing competitors.Gap’s brand reputation has suffered through childlabor issues in India and turning things around couldtake more than just boosting its online offering.

(-20%)


• MERRILL LYNCH. Merrill Lynch is in the unenviableposition of being among the worst hit by the credit-crisis. Without a retail side to their business to helpsupport and balance the business, they’ve been leftstruggling with the reality of colossal losses. A brandwhich has traditionally thrived on a reputation fornot being a risk taker, has seen its involvement inpackaging sub-prime US homeowner securitiesspectacularly backfire.

(-21%)


4. New entrants


New entrants

GrowthBrand Value

2008 (m)Rank

New$8,31344

New$4,80273

New$3,52793

$3,52694

New$3,50296

New

100 New$3,338$3,338

99 $3,359 New

22 $13,840 New


5. Breakdown by country and industry


Breakdown by country

COUNTRY BREAKDOWN

CANADA 2

FINLAND 1

FRANCE 8

GERMANY 10

ITALY 4

JAPAN 7

NETHERLANDS 3

SOUTH KOREA 2

SPAIN 1

SWEDEN 2

SWITZERLAND 5

UNITED KINGDOM 3

UNITED STATES 52


Breakdown by industry

INDUSTRY BREAKDOWN

ALCOHOL 4

APPAREL 3

AUTOMOTIVE 12

BEVERAGES 3

COMPUTER HARDWARE 6

COMPUTER SERVICES 3

COMPUTER SOFTWARE 3

COMPUTER ELECTRONICS 8

DIVERSIFIED 4

ENERGY 2

FINANCIAL SERVICES 13

FOOD 5

HOME FURNISHINGS 1

HOSPITALITY 1

INTERNET SERVICES 4

LUXURY 9

MEDIA 3

PERSONAL CARE 7

RESTAURANTS 4

SPORTING GOODS 2

TOBACCO 1

TRANSPORTATION 2


6. Key insights


Strong brands grow in weakeconomies


• The Red Thread is about more than avalue-generating brand. It’s aboutcreating, managing, and measuringbrand value across every aspect ofbusiness

• Putting the brand at the core of thebusiness becomes a uniting force behindeverything you do and say to drive brandvalue

• This is the ideal time to optimize yourbrand performance to ensure that everydollar spent is driving demand andcreating value

The Red Thread: creating andmanaging brand value


• Know who your customers are andwhy they purchase

• Pinpoint the role your brand plays indriving customers’ selection

• Understand the strengths andweaknesses of your brand

• Create the business case

• Make sure your employees areincluded in the program to supportthe brand

• Build a clear purpose for the brandand relentlessly follow that purpose

• Be consistent and recognize it is anever-ending journey

Taking action: acting like aglobal brand leader


Sustainability and its impact onbrand value


• Companies are starting toevaluate the “triple bottom line”of their sustainability initiatives–the environmental, social andfinancial impacts.

• A sustainability effort should beconsistent with a brand’spositioning, and create value forthe business, while also doing theright thing for our world.

–GE, Toyota and Honda provethere’s a right way to do this

The value of green continues tosustain brand performance


Building brands in emergingmarkets


• Understand the challenges and opportunitiesin emerging markets

• Understand how the brand experience ischanging and what motivates consumers topurchase

• Recognize the maturity of the markets andhow touchpoints can differ

• Understand the role of homegrown brandsand how they can defend themselves againstimportant brands entering their market

• Identify and offer “provenance-based”elements

• Know the landscape of current brands in themarket

Building brands in emerging markets


The role of luxury

• The luxury industry defies all laws of economies – evenin economic downturn, consumers will spend more ifthey perceive the quality of the brand to be greater

• The rise of individualism has also led luxury to be aboutmuch more than simply communicating one’s status toothers


7. Our approach and experience


The business purpose for brandvaluation


• Extending the business basedon the brand’s equity

• Assessing the economicimpact on branding decisions,legitimizing brandinvestments and supportingrisk management

• Setting performance metricsfor controlling purposes

• Providing a fair opinion andinvestment advisory

• Reporting, litigation and taxes

• Financing projects andbusinesses, defining royaltyrates

The business purpose for brandvaluation


Interbrand’s method for valuing the2008 Best Global Brands


Forecasted current andfuture earnings specificallyattributable to the brand

FINANCIAL

A measure of how thebrand influences customerdecision-making at thepoint of purchase

ROLE OF BRAND

A benchmark of thebrand’s ability to secureon-going customerdemand (loyalty, re-purchase, retention)

BRAND STRENGTH

BRAND VALUE CALCULATIONS

Role ofBrand

Analysis

Year 1Year 2Year 3Year 4Year 5

Brand Earnings

Branded Revenues

Intangible Earnings

BrandValue

Brand Strength Analysis= Discount Rate

ILLUSTRATIVE

INTERBRAND’S BRAND VALUATION

METHODOLOGYSIMPLE, PROFOUND & TRANSPARENT


History

• Interbrand pioneered the development of brand valuation techniques in 1988 for RankHovis McDougall (RHM), who was resisting a hostile takeover bid. The company neededto demonstrate that their value had been severely underestimated and hiredInterbrand to quantify the value of RHM’s portfolio of brands.

– Our approach is the industry standard, endorsed by

Academics – Government bodies

Auditor – High courts

Accountancy firms – Management consultants

Analysts – Stock exchanges

Advertising agencies – Tax authorities

Banks

– Interbrand completed more than 5000 brand valuations

– Valuation services used by more than 400 leading companies

– We’ve conducted brand valuations in all industry sectors


Why Interbrand?

• Accepted standard across the industry: Interbrandinvented brand valuation almost 20 years ago and hascontinued to innovate its methodology to remain the

“gold standard” across the industry. We have beenrecognized by a range of constituencies that includeacademics (such as Harvard University), accountants(such as Accountants’ Digest), business journalists (suchas BusinessWeek), and even our competitors.

• Measures brand as a financial asset: Our definition ofbrand value, as the current and future earnings drivenby the brand, gives management a defensible approachto quantify the value of an intangible asset much like

the valuation of tangible assets.

• Incorporates rigorous analytic techniques: Our brandvalue methodology is built on accepted practices in bothfinance and marketing. In finance we apply established

principles of Economic Value Added (EVA) and NetPresent Value (NPV). In marketing we utilize the latestanalytic techniques such as structural equation modeling(SEM) and choice modeling to quantify brand measuresin an objective way. Our consultants stay on top of the

latest industry trends and often pioneer new techniquesfor the industry.

• Provides a diagnostic tool for on-going measurement:The methodology allows for not only measurement, butalso management of the brand. The various inputs to

the model provide insights into the drivers of brandvalue that inform both strategy and tactics thatultimately maximize shareholder value. We work withour clients to leverage insights gained from the analysisto develop on-going brand valuation metrics and

tracking tools. Many of our clients conduct on-goingbrand valuations (yearly as well as quarterly) andincorporate these measures into their performancemanagement systems.

• Focused on actionable results: These diagnostic toolsand strategic insights lead to recommended actions. Wework with clients to identify both short and long-termactions that will protect and grow their brand valuebased on the various insights gained from the analyses

in the brand valuation model.

• Customized to fit specific client needs: Finally, we tailorbrand valuation for each client based on its specificbranding and business needs. Our brand valuation

methodology provides a framework in which the variousinputs to the model can be analyzed based on availabledata and to the level of granularity most relevant foreach client.


We have led over 5,000 brandvaluation assignments


Thank you

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Best Global Brands 2008 Briefing DRAFT - Miguel Santesmases. informe marcas globales... · 33 |...

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