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March 7th 2013 Nigel Hollis
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90%of the world’s
L E A D I N G B R A N D S
Agenda
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1. Measuring Financial Value2. Creating Financial Value3. Measuring the drivers of Financial Value
How much is this brand worth?
US$1.6 Billion
Strong brands outperform their peers
-60%
-40%
-20%
0%
20%
40%
60%
Apr 06 Aug 06 Dec 06 Apr 07 Aug 07 Dec 07 Apr 08 Aug 08 Dec 08 Apr 09 Aug 09 Dec 09 Apr 10 Aug 10 Dec 10 Apr 11 Aug 11 Dec 11 Apr 12 Aug 12 Dec 12
BrandZ™ Strong Brands Portfolio vs. S&P 500(Apr 2006 - Dec 2012)
BrandZ™ Portfolio
S&P 500
15.3%
51.1%
Source: Bloomberg; MB Optimor London Analysis
BRANDED EARNINGSWhat proportion of a company’s earnings can be attributed to a brand?
BRAND CONTRIBUTIONHow much of these earnings are due to the brand’s close bond with it’s customers?
BRAND MULTIPLEWhat is the growth potential of the brand-driven earnings?
$
%
M
Valuing a brand is more than just guesswork
Guesswork!
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What is the world’s most valuable brand worth?
$182bn
$77bn
What is the world’s most valuable brand?
Which brand is the more valuable?
$95bn
$74bn
$34bn
$17bn
Which is worth more?
Which is the world most valuable financial brand?
$42bn
$38bn
Which declined more between 2011 and 2012?
-17%
-18%
+61%
+74%
Which increased most between 2011 and 2012?
11.5bn
9.3bn
Which brand is worth more?
Coke is the worlds largest cpg brand. What comes next?
$15bn
$18bn
7. $74bn
10. $47bn
9. $49bn
8. $69bn
4. $95bn
6. $74bn
2. $116bn
1. $183bn
5. $77bn
3. $108bn
Global Top 10 in 2012
The importance of brand equity differs by category
Agenda
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1. Measuring Financial Value2. Creating Financial value3. Measuring the drivers of Financial Value
Brands can create value in 4 ways
Commanding a premium now
Creating demand for the brand or service now
Creating the potential to grow future market share
Extending to new uses, countries and categories
FinancialValue
Growth
Brand
What consumers
experience and remember
What the brand does and says
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22
MeaningfulMeaningful
23
DifferentDifferent
24
SalientSalient
Strong brands offer a meaningfully different experience
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ResonancePurpose
Delivery Difference
MeaningfullyDifferent
Experience
Match the driver to the car
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Prince Alwaleed bin TalalAlsaud
Mukesh Ambani Ingvar Kamprad
Rolls Royce Phantom Mercedes Maybach 62 Volvo 240 GL
Worth: $30bn Worth: $23bn Worth: $20bn
IKEA: largest retailer of furniture in the world
IKEA’s purpose is to create a better life for people…but how?
By removing squeezing out every cent from the design, manufacturing and transport of its products.
Prices fell by 2.6 per cent in 2011.
Delivery: any brand needs to “mind the gap”
"Well we have two choices. Either you make the bank a better place to work, or I can
create a worse brand.“Chris Clark
Head of marketing, planning, and business strategy at HSBC
HR Manager complains that work experience does not match brand image:
Delivery: how well the brand’s experience lives up to its purpose
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0%10%20%30%40%50%60%70%
0 to 1 2 to 3 4 to 5
NUMBER OF POSITIVE SENSES RECALLED
The more positive and distinctive sensory impressions come to mind, the more loyal
people are to the brand.
Source: BRANDsense survey conducted in US, UK and Japan
“The girl does not only tell it has good fragrance, but also teaches me how to smell it properly – should not directly smell from the bottle, but wave the hands back & forth to air the fragrance out, as to smell the perfume”
Resonance: people appreciate the brand for what it does and how it makes them feel
0 50 100
Offer something different
Are leading the way
Made by companies you
can trust
DoveNatura
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Difference: provides a reason to choose and justifies a price premium
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Average Potential for brand to grow
1.3%
Average potential for brand to grow
15.9%
Average potential for brand to grow
-7.2%
Brands that ARE different
Brands that AREN’T different
The five facets of effective brand amplification
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Findability
AffordabilityExtendability
CredibilityVitality
Strong brands amplify their meaningful difference drive financial value growth
Findability: ensure your brand is everywhere people might want to find it
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VisibilityAvailability
Findability
Tropicana’s new packaging caused revenues to decline by $30 million in 2 months
Credibility: enhance meaningful differentiation through innovation and association
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Vitality: ensure your brand is seen as contemporary, salient, talked about and fresh in look and feel.
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Break the mould, create something compelling & new
Video title: Coca-Cola Security Camerasyoutube video link: http://www.youtube.com/watch?v=auNSrt-QOhw
Challenging preconceptions and creating a sense of momentum helped Audi boost sales
Six major car launches in 2008But Audi remains considered but not chosenIn 2010 the “Shock the Sheep” campaign challenged the status quo After shifting perceptions Audi has enjoyed strong sales growth and improved margins 80
85
90
95
100
105
110
115
2008 2009 2010 2011 2012
DesirePrice
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Challenging preconceptions
Affordability: justifying your price point while making it accessible to more people
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0
20
40
60
80
2007 2008 2009 2010
Bought Last
Relevance
Extendability: leveraging a strong brand into new categories and countries
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Dove grew from global sales of about €300M in 1990 to becoming Unilever’s first €3B brand in 2011.
Bar soap 1
Dish soap
Body wash
1955 1965 1995 19981991 1997 20102007
Deodorant
Hair care
Anti-aging range
Men’s care products
2002
Global expansion:
launched to 55 countries
between 1991-1994.
Body lotion
1999
Facial cleansers
How successful brands drive financial value growth
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Findability
AffordabilityExtendibility
CredibilityVitality
Amplify
ResonancePurpose
Delivery Difference
MeaningfulDifference
Define
FinancialValue
Growth
Grow
Agenda
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1. Measuring Financial Value2. Creating Financial value3. Measuring the drivers of Financial Value
BrandDynamics has evolved significantly over time
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1996 1998
2010
2010
20092003
2003
20051992 2012
Launch of BrandDynamics
Launch of BRANDZ
Launch of the ‘Paw Print’ analysis
Bonding Factor analysis
Launch of D&A
New model
Development of Voltage2.0
Development of the Brand
Strength Score
Development of the Value Driver workshops
People are more predisposed brands they find meaningful, different and salient
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Predisposed customers will be more likely to choose your brand, pay a premium for it and the brand will be better poised to grow market share
Meaningful
Salient
Different £ €$
¥BrandAssociations
In-marketFacilitators
Brand Predisposition
Average Brand Top 100 Most Valuable Brands
Power 11
Salient 127
Different 124
Meaningful 116
Power Index 171
Salient 100
Different 100
Meaningful 100 Power
6
Power Index 100
Salient 120
Different 240
Meaningful 133
Power 22
Power Index 199
Salient 130
Different 59
Meaningful 95
Power 13
Handsets – France 2012
Power Index 120
Salient 212
Different 162
Meaningful 183
Power 32
Power Index 446
South Africa 2012
A single, accurate measure of demand for the brand
The relative price point that the brand’s equity can support
The likelihood that the brand will grow value market share
Three new measures of brand equity
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POWER
PREMIUM
POTENTIAL
Stronger brands produce better returns
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Low Potential
High Potential10%11%12%13%14%15%16%
Low PowerHigh Power
Average operating profit reported as a percent of revenues
Source: BrandZ and annual company reports for 49 companies
How successful brands drive financial value growth
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Findability
AffordabilityExtendability
CredibilityVitality
Amplify
ResonancePurpose
Delivery Difference
MeaningfulDifference
Define
FinancialValue
Growth
Grow
Conclusions
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•Brands are the most valuable asset that many companies own – they creating lasting financial value•Brands exist in the mind – you can only assess their value and potential if you know what people think
•Strong brands provide a meaningfully different experience to people –marketers must not rest until they build this•Once you have this then has to be amplified through all available channels•Vitality is a key battleground. Communications can frame your brand, build salience and talkability