Top100 2012 BrandZ Report

7/31/2019 Top100 2012 BrandZ Report

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Top100MostValuableGlobalBrands

2011


2010


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2006


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Valuation and Methodology by

Brands pursue

relevance

in digitalCreative strategiesgenerate addedimpact and buzz

Fast growing

markets

beckonBrands rise inBRICS andelsewhere

Brand

contribution

protects valueIt dierentiatesin a challengingglobal economy


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2BrandZ Top 100 Most Valuable

Global Brands 2012

Welcome


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Introduction

Welcome3

Seven-year Itch?We have been monitoring the value o the great brands around the globe or a ull

seven years now. But this year, we saw a frstthe value o the worlds best brands

barely inched up! In this edition o the BrandZ Top 100 Most Valuable Global

Brands report, youll see that the aggregate value o the worlds most powerul brandsgrew a mere 0.4%. This compares to 17% growth last year and 4% growth even on the

heels o 2009s Great Recession.

So what gives? Is the era o brand power coming to an end? Hardly. There were

some spectacular growth stories in 2011. By the time this report is o the presses, our

astest growing brand, Facebook will have completed its IPO and likely our valuation

will need to be adjusted upward. We expect a stratospheric valuation as individuals

and institutions clamour to own a little piece o the social media titan. Luxury goods

with the likes o Herms and Rolex saw spectacular double digit growth in spite

o anaemic market conditions. And our rankings celebrate a number o comeback

kids, including Starbucks and Home Depot, who surged orward ater regaining

their ooting. Exciting new brands emerged on the scene, including our frst Arican

brand, the teleco giant MTN.

Emerging marketsa term that eels increasingly inaccurate and clichdremained

a cause or enthusiasm, but also made us pause and think about where growth will

come rom when these red-hot markets cool. 2011 saw a possible harbinger o things

to come, as soter stock markets in China and Brazil resulted in lower growth o

enterprise value. In spite o this, our sentiment is that brands become even more

important in periods o low growth. Competition will inevitably heat up as companies

seek share growth in lieu o overall market growth. The great thing about powerul

brands is the ability to play deence and oence. In tough times, a powerul brand

protects us rom competitive incursions and in good times, it provides a meaningul

platorm on which to grow.

This year, we saw the growing importance o meaning. For years weve known thatconsumers seek more rom brands than just unctional benefts. Theyve long ormed

emotional bonds with the brands they choose. But increasingly, were seeing those

connections reserved or brands that consumers can be proud to call their riends

brands with ideals and those that operate to a higher moral and social standard. Its

at the heart o brand trust and even brand love. Those who betray this trust will

inevitably lose the love.

We hope youll enjoy this report with our compliments. We continue on our journey

o brand learning and we hope youll beneft rom what were discovering. Do let us

know how our teams at Millward Brown and Millward Brown Optimor can put our

culture o curiosity to work or you!

With warmest regards,

Eileen Campbell

This report would not be possible without the hard work and commitment o a

dedicated team o proessionals. We wish to end our thanks and appreciation to:Our WPP sponsorDavid Roth, Managing Director, Millward Brown Optimor

Nick Cooper, BrandZ Valuation Team LeaderCristiana Pearson, BrandZ

Valuation AnalystElspeth Cheung, Global BrandZ DirectorPeter Walshe,

BrandZ Marketing DirectorDelyth Hughes, BrandZ Marketing Project

ManagerKaren Jones


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Global Brands 2012

Contents


Global Brands 2012


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Introduction

Welcome5

Highlights 6

Take Aways 8

Strategic Essays 10

Reputation, Purpose and Prots:Bridging the Gap 11

Sustaining brand relevance: The impact o new

devices on the path to purchase12

Buzz means money: Social and digital media,

vital to the health o successul brands14

More than a megaphone: Interactive

digital engages people15

Metail is the new retail: Brand owners and

retailers ace a new world16

Fast Growing Markets

Overview 18

Brazil 22

Russia 24

India 26

China 28

Top 100 Overview

BrandZ Top 100 Most Valuable

Global Brands 201230

Top Risers 38

Newcomers 39

Category Changes 40

Brand Contribution 41

Regions 42

Top 10 North America 42

Top 10 Continental Europe 43

Top 10 Asia 43

Top 10 Latin America 44

Top 10 UK 44

Brand Personality: Unlocking key traitsor success and value

45

Product Categories

Apparel 48

Beer 52

Cars 55

Fast Food 59

Financial Institutions 62

Insurance 67

Luxury 70

Oil & Gas 73

Personal Care 76

Retail 80

Sot Drinks 84

Technology 87

Telecom Providers 92

Resources

Methodology 97

WPP Contributors 100

BrandZ Apps 103


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Global Brands 20126

The total brand valueo the 2012 BrandZ

Top 100 Most ValuableGlobal Brands reached$2.4 trillion.

Brand value grewoverall, but onlymarginally, becauseo myriad economicand political issuesthat eroded consumercondence in the

developed economiesand because the BRICsslowed somewhat.

Brand itsel remainedstrong. And the portiono brand value attributeddirectly to brand,

rather than nancials orother actors, helpedsustain brands througha challenging year.

The value o theBrandZ Top 100Most Valuable GlobalBrands grew 66percent betweenthe rst valuationin 2006 and 2012.

During that six yearperiod, the BrandZportolio o highlyvalued brandsoutperormed the S&P500by 103 percent.

On a category-by-category basis, sixcategories were up,six were down andnancial was fatin the 2012 report.

Luxury and ast oodrose most sharply, 15percent, ollowed byapparel at 13 percent.

Technology andtelecom brandstogether comprisedabout 44 percent othe value o the 2012

BrandZ

Top 100 MostValuable Global Brands.They accounted orabout one-third othe value in 2006.

Four o the Top5 brands were intechnology. Number4, McDonalds,was the exception.

Apple stayed Number 1,

with a 19 percent gainin brand value to $183billion or the technologyleader.

With a brand valueo $116 billion, B2Bgiant IBM moved up

one slot to Number2, ahead o Google.

Highlights


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One in ve brands inthe BrandZ Top 100Most Valuable GlobalBrands was rom aast growing economy.

The rst brandsrom Chile, retailersFalabella and Sodimac,entered the BrandZcategory rankings.

MTN, a South Aricantelecom, becamethe rst brand rom

Arica to rank in theBrandZ Top 100 Most

Valuable Global Brands.

Another telecom, Airtelbecame the secondIndian brand in theBrandZ Top 100 Most


Sinopec, the oil and gasgiant and the traditionalChinese clear liquorMoutai brought thenumber o Chinese

brands to 13 in the2012 BrandZ Top 100.

The rst Australianbrand also entered

the BrandZ Top 100Most Valuable GlobalBrands. CommonwealthBank appreciated invalue in part becauseo its investmentsin the heated

Asian economies.

With an increase o74 percent, Facebookappreciated the most inbrand value, moving up16 places to Number 19

in the BrandZ Top 100Most Valuable GlobalBrands, just behindWalmart and Amazon.

Herms grew 61percentin brand value, andmoved up 39 places inthe BrandZ Top 100,based on the strongluxury market and thebrands desirability.

Introduction

Highlights7


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Global Brands 2012

Value

Consumers are shopping. But

theyve adopted a new attitude

toward consumptionconsidered

rather than conspicuous. Many

brands that appreciated in value,

such as Zara, Uniqlo and HomeDepot, combined quality with price

into an appealing value proposition.

Renewal

Brand strength isnt an inoculation

that prevents problems. Stu

happens. The economy tanks.

Consumer tastes change.

Corrections are inevitable. Brand

strength enabled renewal to

happen. And happen quickly.

Think Starbucks or Toyota.

Relevance

Brand heritage is important

and hard earned. Heritage

can gain consumer trust. But

to be recommended today

requires being relevant. In its

contemporary product range and

clever communications Burberry

oered an excellent example.

Reputation

Consumers have little patience

with brandsand corporations

that violate trust. They publicize

transgressions immediately and

widely on social media. When PR

is acing damage control, its toolate or the reputation conversation.

Reputation is a core strategic

concern. No brand gets a ree

pass. Consumers continued to

distrust banks, no surprise. But

they also scrutinized more revered

brands like Apple, Facebook

and Google.

Reimagine

Not long ago, a huge warehouse

lled with racks stacked high with

merchandise dened successul

power retailing. Consumers in

those aisles now shop with mobile

device in hand, conducting price

comparisons. Brands expecting

to succeed in this landscape are

reimagining themselves, looking or

ways to be present in a compelling

way in every possible physical

and virtual reality. Tesco even

has an interactive video wall in

the Seoul, South Korea subway.

Its the BrandZ measurement o

how much o a brands value can

be attributed to the brand itsel,

exclusive o nancials and other

actors. High Brand Contribution is

an enduring competitive strengthmost oten ound among luxury

brands. But not exclusively.

Coca-Cola and two Chilean

retailersFalabella and Sodimac

ranked high in the 2012 BrandZ

Brand Contribution ranking,

suggesting that this advantage is

available to brands in any category.

Personality

No single brand personality

guarantees success. Theres

no ormula. Brands in the same

product category, but with radically

dierent personalities, can both

succeed. The key is to understand

a brands personality and then

to incorporate those traits into a

consistent brand message. Brazils

Brahma beer is among the highest

brands in Brand Contribution.

Consumers think o the beer as

riendly and happy and Brahma

reinorces this perception in

its advertising.

Take Aways

BrandContribution


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Harder BRICs

Western brands are no longer

a novelty in many o the BRIC

markets. Local brands are

improving in unctional and

emotional appeal. Years ago,

perhaps, brand success wasabout just showing up. Not any

more. Aggressively improving

its approach to consumers,

the Russian nancial institution

Sberbank was among the

Top Risers in brand value in

the BrandZ Top 100 Most


Disruption

An entrepreneur with a good

idea and minimal investment

can rapidly impact any category.

Todays telecom or a retailer can

be tomorrows bank. Digital makes

it possible. Category disruption

is a looming threat that brands

can best handle by perpetually

innovating and experimenting,

adopting what works and

eliminating what doesnt. Even

Amazon, which perected

the world o online shopping,

experimented with a distribution

presence in the physical world.

Technology

In almost any category, technology

seems to be at the center o the

conversation. Retail is about being

omni-channel, present everywhere

all the time, which is only possible

in your dreams or throughtechnology. The competitive battle

in cars is not about horsepower,

itsel a retro word, but about

technical enhancements like voice-

activated communication or driving

and controlling entertainment

systems. BMWs came loaded

with technology; so did Fords.

Digital

Theres never a magic wand. But

digital comes close. Its power

seems limited only by the creativity

o thinkers and dreamers. Digital

enables brands to be ever-

present in ways that inorm and

delight people when theyre at

home on a computer, engaged

on a mobile device, passing a

compelling outdoor display or

standing in a store aisle. And

digital works across categories,

as exemplied by the eature

Digital Discoveries on the website

o luxury brand Louis Vuitton.

The impact o consumer concern

with health is most apparent in

the decline o cola sales and the

addition o salad and apple slices

to ast ood menus. But the trend

is deeper and wider than twocategories. Because were only

human, well continue to consume

ood and drinks that are bad or us.

But well do it less. We wont eel

good about it. And we wont eel

good about the brands that enable

this behavior. Coke and Pepsi

emphasized healthier options.

And they were not alone.

Entitlement

Consumers eel entitled again.

Having tightened their belts or

so long, they need to exhale. In

categories such as luxury and

personal care, individuals spent

money at all price points, more

to eel good about themselves

than to impress others, whether

purchasing an expensive

ragrance rom Herms or a more

aordable one rom Clinique.

Introduction

Take Aways9

Health &Wellness


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Global Brands 2012

Strategic Essays


Global Brands 2012

Digital opportunities, anchored by trustworthyreputation, sustain brand relevance today.


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Reputation, Purpose and

Prots: Bridging the gapBy John Gerzema

Executive Chairman

Strategic Essays

Reputation11

A business that makes

nothing but money is apoor business. Henry Ford

Corporate responsibility activities haveexisted or nearly as long as corporationsthemselves. And great companies backedby names like Carnegie and Rockeellerreturned prots to the populace throughtrusts, oundations, charities and publicworks. Great companies were part o theculture and consumers rewarded themwith their business.

But as corporations modernized andconsolidated, the ocus or doinggood shited away rom the consumermarketplace to narrow elite audiencesthat shaped policy. The vision o theenterprises diused, 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 rom WPPs

BrandAsset Valuator and BrandZthe two largest surveys o brands in theworldreveals that customers seek outand support companies that share theirvalues. And they reward these companieswith stronger brands and more loyalcustomer bases. Here are ve key insightsor understanding the power o corporatereputation and a ramework or harnessingthat power to positively impact brandperormance and market share.

1. Trust is the New Black.

As ewer people trust brands, corporatereputation can drive brand dierentiation.

Trust previously did little to dierentiatea brand. But today, a trustworthycompany has a 35 percent greater chance

to drive brand dierentiation. Trustshould be a central tenant o a managers

strategy or growth.2. Corporate Responsibilityhas evolved.

Its moved rom communications toconversations.

As society demands transparency andparticipation, corporations must becometruly public. On Patagonias Foot PrintChronicles website, people can clickon any garment and virtually track thecompanys supply chain, understandingpath to purchase, worker conditions andcarbon oot 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 aects purchase behaviors.Corporate reputation is not just aboutcreating a warm glow around a brand.Its an impactul customer retentionmechanism.

4. The eects o corporatereputation can surprise.

Tey are pronounced among older, moreafuent and emale consumers.

Conventional wisdom holds thatcorporate responsibility is more importantto younger people. However, olderpeople walk the walk. As people age,their perceptions o social responsibilitybecome a stronger driver o brand choice.

5. Corporate reputation can helpdistressed categories.

It can inuse lie into negatively perceivedcategories, such as energy.

Corporate reputation provides a newpathway to improve brand identity,consideration and usage by buildingpositive dierentiation in categories thatstruggle with reputation and tend to bemore dened by negative dierentiation.

A ramework or changeSuccessully acting on these ndingsrequires rst understanding andmeasuring corporate reputation. Wedivided corporate reputation into theseour components:

Success: Innovative, associated withquality products and nancially strong

Fairness: Well priced, oering goodvalue or money, honest and decent inrelationships with customers, suppliersand other companies

Responsibility: Respectul o employees,scrupulous about supply chain practicesand protective o the environment

Trust: Consistently delivers on promises

about products and servicesThese our components move alonga continuum rom characteristicsseen as hard and practical businessconsiderations (Success and Fairness) toother important issues seen as less coreto business achievement and thereoresot (Responsibility and Trust). Untilnow these our components were notwell integrated. The hard issues drovethe business. Too oten the sot issuesormed the moat around the business,

an aterthought done or pragmaticreasons and lacking conviction.

Success today requires integratingthese components into all levels o thebusiness. This approach produces brandintegrity, a tensile internal strength thatsmuch more durable than the moat.It is vitally important or companies tounderstand that that they have two typeso shareholders, those who hold stocksand those who buy products and services.

In ast growing markets and in startup

activity many managers already take thismore holistic view. Because they dontdistinguish between corporation andbrand, theyre better able to translatevision, principles and values into brandexperiences or customers.

David Roth


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Global Brands 2012

Sustaining brand relevance:

The impact o new deviceson the path to purchase

The digital revolutioncan be likened to arunaway train orsome brands.Its very hard to board now that itson its way and, even i you have a seatalready, its a ar rom comortable ridewith the emergence o new devicesand the ways in which consumersinteract with themacting like yetmore unpredictable junctions in thetrack ahead.

Constant connectivity has madeconsumers more vocal than ever beore,and this word o mouth infuencesdecision-making everywhere. It hasnever been easier or the connectedconsumer to report on a bad experience,in real time, while eelings are stillraw. And these comments, reviewsand criticisms have an eectwith 52percent o people surveyed globallysaying that a single negative review willhave an impact on how they eel towardsa brand.

Many brands have learned that thisshit in the balance o power towardsthe consumer requires an overhaulo marketing approaches, with thefexibility to respond to opportunitiesand threatsin real-time a signicantdriving actor in maintaining a positivereputation.

The biggest enabler o this powershit over the past ew years has beenthe smartphone explosion. Withapproximately 30 percent o the worldnow constantly connectedresearchingpurchases, comparing prices, shopping

via mobile and sharing commentswith their network and beyondtheimplications or brands continue tobe huge.

Mobile intensies

disruption

We have seen the Internet ande-commerce make a major impact on

shopping; mobile Internet has takenthis disruption to a new level and posesdiverse challenges. Many brands areexperimenting with dierent approachesto the retail environment, using their

physical locations as showrooms, laidout or strong design appeal, ratherthan showcasing piles o 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 technologyor some brands.

The 28 percent o consumers who areusing a mobile device to research in-store

also create a new dynamic. Brands needto take action to ensure that they canhold their own in an environment whereconsumers can be more knowledgeablethan sales sta. Empowering shop-foorteams 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 agree

Share experiences 64

64

61

60

56

53

51

46

40

Offer advice

Praise a brand

Ask advice

Share answers/opinions

Criticize a brand

Share cool stuff from brands

Customer service

Paid/rewarded for doing so

Fiona Buchanan

Development Manager

By Joseph Webb

UK Head o Digital

& Technology


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Meeting shoppers on the

path to purchase

Brands need to make mobile a key parto the in-store experience, ultimatelycreating another POS channel.Approaches or integrated mobile intothe store include providing ree Wi-Fiand having QR codes that link to productinormation or expert reviews. Mobilewallet is also slowly gaining traction andalready more than a third o consumersglobally are interested in using thisservice, which may take us towards aworld without check-out queues, oreven check-outs at all, solving a majorannoyance o the grocery shopper.

Increased tablet ownership will produce

more new behavior and attitudes. Werealready seeing tablets impact where andhow we shop, with highly compelling,engaging interaces driving out-o-storepurchases. As tablet penetration grows,the opportunities to develop new ways

or consumers to shop online will alsogrow exponentially.

Consumers are increasingly paving theirown path to purchase, with a growing,device-driven autonomy rom traditionalchannels. Brand successes requiresharnessing these new behaviors to enableand enhance the consumer experience anddeliver the brand message with consistencyacross all media and purchase channels.

Internet penetration

infuences message

and media

The message and media approach,infuenced by Internet penetration, variesby country market. In a market like Sweden,

where more than nine out o 10 people haveaccess to the Internet, only 31 percent opeople regard TV ads as infuential, whilealmost three-quarters (74 percent) willgo online to nd out inormation abouta product seen elsewhere.

Compare this to Indonesia, whereInternet penetration has only reached16 percent and the majority o Internetaccess is via a mobile device. Here, TVplays a ar larger role, with 96 percent oIndonesian Internet users regarding TVas infuentialeven i they are surng

the Internet on their phone as theywatch it.

An opportunity exists or brand ownersin both o these markets to deliverimpactul, integrated campaigns, but thatrequires a sound understanding o whichdevices consumers use, when, why andhow. These possibilities seemed ar-etched just a ew years ago. Yet withdevices putting consumers in the driversseat, the choice or retailers and brandsmay be less o a question o whether they

can keep up, but rather whether they canaord not to.

Strategic Essays

The Impact of Digital1313


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Global Brands 2012

Buzz means money: Social and digital media,

vital to the health o successul brandsBy David Barrowcli

Specialist: Social Media Measurement

The 2012 BrandZ

Top 100 Most ValuableGlobal Brandscomprises many o thegreat and the good,the dierent and thespecial, and the mosttalked about.WPP social media monitoring company,Visible Technologies, carried out an

audit o the digital social and traditionalbuzz or each o the Top 100 brands overthe last year. From this we have createdan Earned Buzz Index, weighted by

positive mentions, together with theMillward Brown BrandZ measure o

online ans (FanZ Index).

As might be expected, the brands withmore ans created more Earned Buzz.

But the crucial nding is that brands withmore ans and Earned Buzz levels aremuch more valuable.

And brand value growth is signicantlybetter i buzz is better. The Top 10Earned Buzz brands grew on averageby 5 percent in value last year, while thebottom 10 declined 8 percent.

The uture also is brighter. The BrandMomentum Index measures theprospects o uture earnings on a scale

2012 BrandZ Top 100 in groups o 10 by level o buzz.Brands with higher value have more ans and more Earned Buzz.

More buzz and ans means more value

Earning the privilege o beingtalked about is one o the assetso an interesting, meaningullydierent brand.

The Earned Buzz Top 10

Rank Category Buzz Index(average

100)

1 Facebook 1,331

2 Google 1,229

3 Apple 1,093

4 eBay 475

5 Microsot 442

6 Sony 437

7 Amazon 425

8 Samsung 301

9 HP 282

10 Disney 280

Value $511bn

$112bn

EARNEDBUZZINDEXEARNE

DBUZZI

NDEX

EARNED

BUZZ

INDEX

FANZIN

DEX FA

NZIND

EX FANZINDEXFAN

ZI

NDEX

o 1 to 10, 10 being the most positivescore. The Top 10 Earned Buzz

brands averaged a score o 8 in BrandMomentum compared with a score o 6or the bottom 10.

So what are the EarnedBuzz Top 10 brands?

They are completely dominated by UStechnology brands, and even the oneretailer, Amazon, is undamentally atechnology brand. The entertainmentbrand Disney is also becoming heavilydependent on the digital space.


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More than a megaphone:

Interactive digitalengages people

By Eric Mauriello

Senior Vice President

Strategic Essays


Its not just what brandssay that matters, itswhat they do.And yet, even as Digital Out o Home(DOOH) becomes more and more a parto our physical and imaginative landscape,brands are still using the platorm mainly asa megaphoneto shout at people as theyrace past in their cars or mosey throughthe mall.

Sometimes theres a twist, such as theintelligent billboards in the Tokyorailway system that change up theirads depending on the perceived age/gender o the person looking. But at leastor the moment, DOOH concentrateson advertising to consumers withoutoering them any new benet specicto the locational, interactive potential othe platorm. Except making it easier oradvertisers to sell and publish content.

In act, I would go so ar as to venture

that, currently, DOOH benets mediacompanies more than it does eitherbrands or consumers; with the abilityto change digital signage every hourvia computer, advertisers can sell moreinventory, with much less eort. Brandsshould be encouraged to rethink DOOHas Interactive Out o Homethat is,as an opportunity to do something withthe audience: engage them, entertainthem, above all, get them to participate.

Some brands get it right

There are denitely brands out there thatare getting it right and working interactivityinto their DOOH environments.Twentieth Century Foxs Avatar Navicampaign promoting Avatar, or

example, incorporated both augmentedreality and a large-ormat video wall, botho which enticed passersby into morphingstations to transorm themselves intoa Navi, the blue skinned species romthe movie. Yahoos Bus Stop Derby letparticipants engage with other peopleat other bus stops, in real time, throughcompetitive social games.

As another example o eective interactiveout o home, we at Possible Worldwiderecently unveiled the Macys Beauty Spot,

a multi-branded in-store area, anchored bya large-ormat touchscreen, that providescross-brand inormation, inspiration, andrecommendation to customers. We couldhave installed a digital billboard in exactlythe same place, but by making the BeautySpot interactive and linking it to theusers mobile device and social networks,we delivered shoppers a satisying multi-channel experience, bringing aspects othe website, the customers digital identity,and the mobile experience together in

a way that bolsters the Macys brand bymaking people eel both excited to exploretheir avorite brands while being in controlo their time and level o commitment. Trydoing that with a digital billboard, even ithe glossy ads change up every minute.

Innovation needs somestandardization

Part o the problem with innovating inthe out o home market, o course, is thatits in its nascent stages and thus most

deployments are bespoke, or particularclients and situations. Standardizedbackends, platorms, and ecosystemshave resulted in an explosion o growthand innovation or the Web and mobile;think only o the opportunities that the

iTunes or Google models have providedthe creative industry. In contrast, rightnow, when we build an interactive outo home app, we oten also have to buildthe platorm on which it will reside.

Once interactive out o home platormsbecome permanent xtures in ourlandscapes, and all developers haveto do is create exceptional immersiveexperiences or people, well see a hugesurge in transormational work that willnot only surprise and delight peopleandturn them into brand-loyal consumersbut can actually improve the quality olie. The work that Possible recentlydid or the Bill and Melinda GatesFoundations Visitor Center demonstrates

pretty dramatically what can happen whenpeople are able to interact intelligentlyin DOOH environments. Fourteeninteractive exhibits educate people aboutimportant global issues and enable themto contribute ideas or improving theworld. As the proverb says: Tell me andIll orget; show me and I may remember;involve me and Ill understand.


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Global Brands 2012

Metail is the new retail:

Brand owners and retailersace a new world

By Michael Ross

Co-ounder and Director

The Internet hascatalyzed undamentalchanges across theentire retail system.At the heart o the changes is a dramaticshit in retailing priorities. Location,location, location is giving way tocustomer, customer, customer.

This transormation 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 rom each otherand become more like each other. Theshit is creating in a completely new typeo merchant, a blend o retailer and brandownerthe metailer.

The notion o metailer evolves naturallyrom how the Internet has changed retailor consumers, brand owners and retailersthemselves. The Internet has let no parto the retail system untouched. The oldrules dont work and the old labels nolonger describe the current reality. Forthe most part, this new world is good orconsumers and brand owners. But itsmixed or retailers.

The Internet benets

consumers and

brand owners

For consumers, the purchasing process

is completely dierent than what it oncewas. Today consumers have much moreinormation, choice and control overwhat and how they buy. The Internet hasendowed consumers with two important

and related characteristics that directlyimpact their purchasing behavior.

FreedomThe unshackling ocustomers rom location has brokenthe traditional retail model. Other thanproducts or immediateconsumption, consumers now haveaccess to an almost unlimited seto brands and products, and toretailers across the globe. For mostcategories,consumers are voting withtheir mouse. Online is now a large

and growing part o the retail mix. Empowerment Inormation about

products, prices, availability andperormance is instantly available viaPCs, mobile phones and tablets.

For brand owners, the Internet enablesdirect access to a global pool o customers.That means brand owners no longerneed to rely on retailers and can adopta radically dierent distribution strategybased on online, fagship stores andvery selective wholesale distribution.And brands benet rom the resultingimproved margins and deepenedcustomer understanding.

Retailer benets

come with problems

For retailers, the Internet brings a mixo benets and problems. The ledger istilted slightly to the positive, which isortunate since the Internet is impossibleto ignore. The good news or retailers

includes these developments:

Greater access to more customers

Traditional retailers gain access tocustomers outside the catchmentarea o their physical stores.

Skills o a metailer:

Merchant prince meetsmathmetician

We have moved rom a world oanonymous and captive customers,to a world where they are knownand unshackled; rom a world whereretailers were distinct rom brandowners to a world where each ismorphing into the other.

In a world centered on stores,

retailers simply need to be good atstores. Its relatively easy to identiygood and poor perorming storesand to understand what is workingand not working.

But in a world o hundreds othousands, i not millions, ocustomers, a retailer needs to begood at statistics to make sense olarge quantities o transactional data.This requires a dierent skill set, newtypes o thinking, new models andnew equations. The key elementsinclude:

- A culture o metrics and data,with data scientists at the hearto the business

- Strategy driven by consumerinsight

- Business planning driven bycustomer acquisition and

retention dynamics

- An organization centred aroundcoherent customer groups

- Measurement o all the things thatmatter to customers

The successul metailers will bethe ones who embrace this newworld by adopting this cultural shit.The battle or customers is just

beginning.


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Strategic Essays


In todays world, metailers have muchmore sensitive diagnostic inormationderived both rom the physical and virtualstore activity. They can determine, orexample, not simply that a particular

physical store is underperorming, 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 eective acquisition and

retention o customers drivesprotable growth.

So understanding individualstheirpurchasing patterns, their behaviors,their wants and needsis critical tooptimizing any commerce business.Failing to understand is a recipe or sub-optimization. In a competitive market,sub-optimization is a recipe or ailure.

More touch points Cross-channelinteraction deepens relationships withexisting customers and makesit easier to acquire new customers.

More customer dataMany retailersstruggle to gain customer insight.

Much more insight is available and theInternet makes it easier to obtain it.

And heres some o the bad newsor 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 nd that some o theirbestselling brands abandon them.

To succeed in this universe, retailers needto manage their businesses dierently.

Introducing metailers

The old model was linear. Thecommercial activity moved rom thebrand owner through the retailer tothe customer. Today, the customer isthe center o 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 successully selling productsand services depends primarily onprooundly understanding the customer,the brand owner and retailer are in thesame business.

Both try to understand the customerand to customize the oering 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 metail

In the past, retailers depended on keymetrics, such as prot-per-store, to

determine the health o the enterpriseand to insolate any problems, which theywould remediate with store-level xes:open, close or ret a store and re or hirea manager.


18/104


Global Brands 2012

The 2012 BrandZ Top 100 Most Valuable GlobalBrands reveals a new phase in the development obrands in ast growing markets.


Global Brands 2012



19/104

663%

47%

NON-FASTGROWING

FASTGROWING

66%

ALLTOP100

19

As BRICs slow,

new marketsand brandsemerge

During the past decade,these markets, especiallythe BRICsBrazil,

Russia, India andChinaserved as themostly dependableengines o globaleconomic growth. Andeven during theeconomic crisis o 2008and 2009, the total

value o the brands romast growing marketscontinued theirsteady climb.

In 2006, the BrandZ Top 100 includedonly two ast growing market brands,rom China. Less than a decade later,ast growing markets account or one-in-ve brands in the 2012 Top 100. During

this period, the value o brands romast growing markets in the Top 100increased in value by 663 percent.

But in the 2012 BrandZ Top 100Most Valuable Global Brands the rateo brand value appreciation in the astgrowing markets slowed. Some actorswere country specic. The attemptto moderate infation contributed tothe economic slowdown in India andBrazil, or example. But, overall, theBRIC deceleration illustrated the

interdependence o nations in a globaleconomy. China reduced demandor commodities rom Brazil. And allthe BRIC countries elt the declinein demand rom nancially troubledcountries in the Eurozone.

Value declines orsome brands, but newbrands appear

As the spotlight dimmed on some

brands, at least temporarily, other brandsemerged rom the shadows. ChinaMobile, the countrys most valuablebrand, and Chinas most valuable bankbrand, ICBC, declined. At the same time,


Overview

the Chinese oil and gas giant Sinopecappeared in the Top 100 or the rst time,as did Moutai, a leading brand o baijiu,Chinas traditional clear alcohol.

Similarly, Petrobras, Brazils oil and gascompany, declined and two Brazilian bankbrands, Ita and Bradesco, ell below theTop 100 in value. But three Brazilianbrandsthe beers Skol and Brahma, andthe cosmetic producer Naturarankedamong the Top 15 brands in BrandContribution, the measure o how branditsel, rather than nancials or otheractors, contributes to earnings.

Russias telecom MTS declined. Butollowing a major eort to reresh the

brand, the nancial institution Sberbankincreased in value 25 percent, which placedit among the BrandZ Top 20 astestrisers. While the Indian bank ICICIdeclined, the Indian telecom Airtelappeared in the BrandZ Top 100 rankingor the rst time. The rst Arican brand,MTN, a South Arican telecom, debutedin the ranking.

Two Chilean brands appeared or the rsttime in the BrandZ ranking o brandsin the retail category. An operator o

department stores and specialty outlets,Falabella is one o South Americas largestretailers. Sodimac, a Falabella company,is a consumer home improvement andB2B construction materials retailer.

Fast growing market brandsexperienced sharper growth thaneither the non-ast growing marketbrands or the Top 100 over all.

Brand value growth in ast growingmarkets helped compensateor the diculty in banking andcertain other categories during thenancial crisis o 2008 and 2009.

Source: BrandZ data

Value o brands since 2006


20/104


Global Brands 2012

33

12

12

43

14

13

29

44

Current results suggest

uture direction

This maturation o ast growing market

brands reveals several trends that pointto likely uture developments.

1. The representation o ast growingmarket brands in the BrandZ Top 100will increasingly include brands romboth the BRICs and other nations romAsia, Arica and Latin America.

2006 2007 2008 2009 2010 2011 2012

China 2 5 5 6 7 12 13

Russia 1 2 2 2 2

Brazil 1 2 3 1

India 1 1 2

Mexico 1 1 1

Arica 1

TOTAL 2 5 6 9 13 19 20

2. Brands rom the ast growing marketsare predominately in inrastructureand nancial categories, refectingtheir status as state-owned or state-controlled enterprises. But technologybrands also appear because o theubiquity o technology and expanding

entrepreneurship. Over time, theast growing market brands will bepresent in many more categories,cultivating consumer allegiance athome and increasingly seeking newopportunities abroad.

Although the presence o ast growing market brands in the BrandZTop 100 ranking slowed last year it continued and expanded to includeArica or the rst time.

Source: BrandZ data

Fast growing market brands are especially represented in nancial,telecoms and other categories typically dominated by state-owned orstate-controlled organizations. The categories in which brands rom ast

growing markets are present will become more diverse over time.Source: BrandZ data

Tech

Telecoms

Financial

Other

Fast GrowingMarkets

OtherMarkets


21/104


Overview2121

Sources: Global TGI, National censusauthorities; International Monetary Fund

BRICs

% o world

BRIC FOUNDATIONS

POPULATIONAND GDP

The our BRIC countries include 42percent o the worlds populationbut account or only 17 percent oits GDP.

2010population

2010GDP ($B)

Brazil 191 million 2,024

Russia 142 million 1,477

India 1,192 million 1,430

China 1,342 million 5,745

BRICs 2,867 million 10,676

17%GDP

42%Population

3. Compared with brands generally,the BrandZ Top 100 score higherin the BrandZ metrics about Trust,Recommendation and Desire. Brandsrom ast growing markets score even

higher in these metrics than the Top100 overall. And while the Top 100 alsoexhibit a much more robust BrandZPyramid than brands generally, the astgrowing market brands again outperormthe Top 100 overall.

The BrandZ Pyramid illustrates thebuilding blocks o a brands connectionwith its customers. The Pyramid isbuilt on a oundation o presence, orawareness o the brand, and culminates

at bonding, which measures theemotional attachment when a customerbelieves that a brand oers moreadvantages than its competition.

The BrandZ Top 100 outperorm brands in general at all levels othe BrandZ Pyramid. Brands rom ast growing markets perormeven better, indicating that they have achieved a close connection

with customers.Source: BrandZ data

22

59

63

77

91

12

40

49

58

73

4

25

34

40

52

Bonding

Advantage

Perormance

Relevance

Presence

Bonding

Advantage

Perormance

Relevance

Presence

Bonding

Advantage

Perormance

Relevance

Presence

Fast Growing

All Top 100

All brands


22/104


Global Brands 2012

Brazil

Expandingmiddle classdrives brandgrowth

Brazilians eel optimistic

about the uture relativeto most o the worldspopulation.Around 70 percent o Brazilians believethat the countrys nancial situation isgoing well or airly well, comparedwith a global average o 39 percent,according to the Global Monitor studyo The Futures Company. Because theeconomy slowed last year, however, thepositive attitude o most Brazilians is

moderated by some doubt about boththe countrys economy and their personalnances, The Futures Company ound.

The underlying optimism is based onseveral actors that transormed theBrazilian economy and accelerated thegrowth o brands during the past decadeincluding: consistent government ocuson improving social and economicequality; a thriving economy, despite thecurrent slowdown; increased availabilityo credit; and national cohesiveness

and pride with growing excitement inanticipation o the 2016 Olympics andWorld Cup in 2014.

Perhaps indicative o the wide incomedisparity that has divided Brazilians in

the past, the government organizes thepopulation into hierarchical economicclasses, A to D, wealthiest to poorest.As in many societies, the wealthiestindividuals remain well o or even

become wealthier. The distinctionin Brazil, over the past decade, is thebroadening o the middle class, or inBrazilian categories, the ascendency opeople rom D to C and rom C to B.

Since 2003, roughly 40 millionBraziliansout o a population o 200millionhave entered the middleclass. The C class now includes abouthal o Brazils population according toTGI. This demonstration o nationalconscience and sel-suciency has

burnished the nations sel-image andunleashed spending that impacts brandsacross all categories, with credit widelyavailable rom credit cards, governmentprograms and through employers.

Many Brazilian and multi-national brandshad largely ignored or underservedmuch o the low-income population withpoorer quality products provided in bigeconomical and unattractive packaging.They now accord these consumersincreased attention and respect.

Consumers adopt

spending strategies

Over time, Brazilian consumersperected strategies to bridge the gapbetween what they aspired to buy andwhat they could aord. In the past, low-income consumers might pay one or tworeais or a bottle o private label cola,or example. Today, they oten spend aew more reais to buy Coke because its

aordable, i more expensive.

But they may alternate their purchaseo Coke with a private label, reservingCoke or special occasions and aweekend treat, while drinking privatelabel on weekdays. Similarly, consumersincreasingly mix brand and private labelin the personal care category wheremany products oer both unctional andemotional benets. A emale shoppermight purchase a relatively low pricedshampoo or general amily use, but the

Brazilian brand Natura or hersel.

Natura, Brazils leading manuacturerand marketer o cosmetics, emphasizesnatural and socially responsible products.Its among the category leaders in

the BrandZ ranking o personalcare brands and earns a high score orBrand Contribution, which measuresthe portion o brand value attributabledirectly to the brand rather than to

nancial perormance or other actors.

Fundamentals or

brand building in Brazil

1. Reach out digitallyBrazilians are among the mostwired people on the planet. Thisinterconnectivity helps cross the

social and economic divides, whichare narrowing but sill exist.

2. Be prepared orcompetitionInternational brands enteringor expanding in Brazil arelikely to encounter both eagerand welcoming consumersand increasingly tough localcompetitors.

3. Recognize distinctive

culturesBecause Brazil is a geographicallylarge and demographically diversecountry, successul brandsrecognize that making an impacton consumers requires adaptingto many local cultures.

4. Be emotionalBrazilians respond positively tobrands that create an emotionalbond. While rational reasons orpurchasing products and services

remain important to Brazilianconsumers, they are especially loyalto brands that earn their aection.

5. Help build BrazilBecoming a genuine and activeparticipant in the eort to raise livingstandards and reduce inequities willultimately benet the brand.


23/104


Brazil23

Spending touches

most categories

Retail brands are organizing their

businesses to serve the new middle classconsumers. Grupo Po de Acar, thenations largest retailer with a portolio o1,800 stores, operates three supermarketbrands, each targeted to a particulardemographic group. The internationalhypermarket brands, such as Carreourand Walmart, are opening smaller storescloser to the economically transormingurban neighborhoods.

TAM, the largest airline o Brazil andLatin America, and the carrier GOL

are among the travel brands benettingas consumers spend their growingdisposable income on travel. Leadingbank brands, such as Bradesco and Ita,are adding branches, especially in theavelas and other poorer neighborhoods.

Cielo and Redecard, brands that developcredit card networks and processpayments, also are expanding to serve therising middle class, as is Multiplus, whichdevelops loyalty programs. Ownership ocredit cards increased rom 46 percent o

C class individuals in 2005 to 53 percentin 2009, according to TGI. Store brandcards increased rom 15 percent o theC population to 25 percent over thesame period.

Brazilians like

local brands

The positive way Brazilians eel abouttheir country extends to Brazils brands,such as Natura or Havaianas, producero the worlds most recognizable fip-fop sandal. Even Petrobras, the nationaloil and gas giant and the nations mostvaluable brand, is held in high esteem.

In contrast to developed markets,where consumers regard oil companieswith suspicion because o their sizeand environmental impact, Braziliansappreciate Petrobras or driving theeconomy and providing employment.The brand reinorces those attitudeswith sponsorship o cultural, sporting

and educational initiatives. Althoughthe Petrobras brand value declined,it remains one o the worlds 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 ewyears. P&G increased its investment

during this period, becoming a majorsponsor o popular TV programs andcross marketing its products under thecorporate umbrella brand.

Some global brands, such as Nesca,have been in Brazil so long thatconsumers think o 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 expertiseexhibited by the multi-nationals. Theyreexperimenting with social media, orexample, attempting to use it more or arelationship-building opportunity ratherthan another sales channel.

Mobile communication potentiallyoers a major brand marketingopportunity because Brazilians are so

wired. According to some estimates, thenumber o cell phones in Brazil exceedsthe size o the population. The brandmarketing challenge, or now, is thatonly a small percentage o these devicesare smart phones. But 65 percent oBrazilians use the Internet everyday,according to the TNS Digital LieStudy, which also ound that Braziliansbuild some o the most extensivesocial networks in the world, with anaverage Brazilian network consisting o481 riends. B

razil

5148 50

58

4347

Source: Global TGI research based onanalysis o 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 agree

R

ussia

India

China

US

E

urope

BRIC FOUNDATIONS

CONTEMPORARYATTITUDES

On the subject o technology,dierences narrow among theBRIC markets and between theBRICs and the US and Europe.In act, relative to the US andEurope, more people in theBRIC markets say they try to

keep up with developments intechnology. O the many reasonsthat might explain this nding,perhaps the most compellingis that technology enablesand accelerates change. Inthe West, or example, mobilephones added convenience.In markets lacking signicanttelecommunicationsinrastructure, mobile phoneshelped transorm societies.


24/104


Global Brands 2012

Russia

Turning pointas consumersseek brands,not institutions

The deep sense o

Russian identity thatpermeates most aspectso lie in this country nowextends to brands.Having learned about brands rom theWest, copying is no longer sucient.Russian companies are beginning tointroduce new brands and reenergizeold ones, inusing them with Russianidentity and global best practices.

Changing consumer attitudes infuencethis 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 its Westernand more determined to nd the rightprice/quality balance.

At least three constituencies also drivethis eort to create world-class Russian

brands: rst, well-traveled Russianconsumers whose exposure to the Westraised expectations; second, Russianentrepreneurs who aspire to createproducts that meet or exceed Western

standards; and third, the government.Several years ago, reacting to theexplosion o Western goods availablein Russia, President Vladimir Putinchallenged the nations businesses to

develop strong Russian brands.

Transorming rom

institutions to brands

This combination o individualityand national pride is most evident inthe transormation o many heritagenames that historically succeeded asnational institutions rather than asbrands competing or customer loyalty.This trend is clearly articulated in the

rebranding o Sberbank, the nationslargest bank. Established 170 years ago,the banks history includes its ormationin czarist Russia and adaptation to theSoviet bureaucracy.

Today, Sberbank is deeply involved in aretail redesign project to better identiyand serve segments o the consumermarket. The bank is upgrading its22,000 branches to one o eight dierentdesignations that include fagship locations,VIP centers, business centers, 24-hour sel-

service lobbies and kiosks or perormingtransactions including bill paying. Mostimportantly, the change is not simplycosmetic. It suggests an organization thathas turned its ace to the consumer both invisual eects and attitude.

The Sberbank example refects anemerging interest by many Russianbrands to segment their audiences andcreate targeted oerings. Other venerableinstitutions engaged in signicantrebranding eorts include: Aerofot,

established in 1923, and the RussianRailways. The descendant o RussiasDepartment o Railways, ormed in 1842,and completion o the Trans-SiberianRailway in 1905, Russian Railwaysrebranded to abandon its staid imageand emphasize the uture, technicalcompetence and customer ocus.

Growing the private sector

The more contemporary Alpha-Bank,connected its twentieth anniversary

with a birthday celebration or Moscow.The outdoor extravaganza included adramatic laser show projected on theaade o the landmark Moscow StateUniversity building, and a sky lled

Fundamentals or brand

building in Russia1. Know your customerI you are selling dreams, status orconspicuous consumption, youllnd plenty o 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 or a oreign brand.

2. Expect the unexpectedRussia oers tremendousopportunity or brands. But therules o the gamethe decision-making process, business prioritiesand consumer preerencescanbe dierent than in the West.Schedules constantly changeand everything takes longer thanexpected, so be fexible.

3. Do the research

Russia is one place that otendisproves the branding is globalapproach. One size rarely ts allin this huge country, especiallywhen the brand originates in theAmericas. The right research cansave bundles in time and money.

4. Show respect andappreciation or theRussian cultureRussians are proud o theircountry. Even when they criticize

it themselves, they may notappreciate having others join in.Russians take great pride in theircultural heritage and expect the resto the world to admire it as well.

5. Be prepared to spend timeAt the end o the day business getsdone, but expect a long period osocializing and getting-to-know-you conversation beore businessis discussed. When Russians getdown to business, they tend to be

more direct in their response andopen criticism is socially accepted,so eedback oten starts with No.


25/104

The Fastest Growing Markets

Russia25


Russia25

Source: Global TGI research based onanalysis o 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 nd a brand I like I

tend to stick with it% who agree

I ask peoples advice beorebuying new things% who agree

Brazil

Russia

IndiaChina

USEurope

with reworks and thousands o balloons.The bank intended the production tosupport its brand-building drive andhighlight its association with innovationand leadership in banking technology.

This proclivity or proactive brand buildingbeyond simple advertising is especiallypronounced in retail. Savage, a ashionbrand, captured the spirit o the timeswith the theme be true to yoursel.Centro, a mass-market shoe brand shitedits emphasis to aordable ashion romprice alone. To dierentiate rom thecompetition, and establish itsel as a brandrather than a multi-brand emporium, theconsumer electronics retailer Eldoradoreurbished its stores to project the brand

promise to make lie easier throughproducts, shopping experience andtechnical support. M-Video, anotherelectronics retail leader, ocuses intentlyon understanding its customers.

The Russian government hasaccelerated this emphasis on brandswith a privatization program that touchesmany categories o products and servicesand has resulted in many Initial PublicOerings (IPOs). Russias second largestbank, state-owned VTB, completed anIPO in May 2011. Rosnet, the oil andgas giant, completed an IPO a year earlier.

Facing Western-type

brand challenges

Becoming a brand means acing brandchallenges. As in the West, Russiasthree leading telecommunicationsbrandsMTS, MegaFon and Beelinestruggle to dierentiate and deendtheir leading positions. Competitively,

theyre squeezed between state-ownedRostelecom and two relatively newprivately owned operators, Tele2 andYota. To increase consumer appeal inthis competitive environment brandsincreasingly oer bundled services. Mergerand acquisition activity has increased.

Russias beer brands are preparing orregulations that will prohibit televisionadvertising as o July 2012. In a uniqueeort to leverage the brand, and reachvarious segments o the market, Russias

leading beer, Baltika, oers 13 variationso Baltika, each numbered and brandedwith the Baltika name. Baltika 3, orexample, is a popular lager, while Baltika7 is a premium brand. Other numbers

are assigned to light beers, ales andother parts o the range. The brewercontinuously identies groups that areunderserved and creates an appropriatebeer. Owned by Denmarks Carlsberg

Group, Baltika is exported worldwide.

Expanding internationally

As Russian brands gain nationalrecognition, they increasingly seekinternational expansion opportunities.Some ashion brands have opened storesin Eastern Europe. Yandex, the market-leading search engine, serves many o thenations o the Former Soviet Union andhas wider expansion aspirations, havinglaunched operations in Turkey in 2011.

The brand enjoys a reputation or strongperormance coupled with aggressivemarketing. It was the rst Internet brandin Russia to advertise on TV. Along with asearch acility that enjoys over 62 percentmarket share in Russia, Yandex also oers amenu o online services including a shoppingmall and YandexMoney, a payment system.Its noted or maps that include a trac jammonitoring tool. Also in the technologycategory, the Russian-owned multi-nationalcomputer security company Kaspersky Labenjoys a strong B2B reputation. It operatesin roughly 30 countries.

Russias energy giants, like Gazprom,Rosnet and Lukoil, operate acrossnational boarders. Gazprom has acquiredcompanies in Central and WesternEurope to serve the natural gas needs oconsumers in those markers. Overseasoces enable the companies to navigateregulatory issues, which tend to bestricter in Europe and North Americacompared with Russia. Lukoil is ocusedon renewal energy and has established apresence at the pump in the US.

Recent large acquisitions also refectcondence in the Russian market and inRussian brands. PepsiCo acquired Wimm-Bill-Dann, one o Russias two majordairy producers. Groupe Danone SA, theFrench company, ormed a joint venturewith the countrys other major dairy brand,Unimilk. Late in 2011, Unilever bought amajority stake in Kalina, Russias leader in

personal care and beauty.

BRIC FOUNDATIONS

THE IMPORTANCEOF BRANDS

Consumers in the BRIC countriesare more brand loyal comparedwith consumers in the US andWestern Europe. They alsoappreciate value, according toTGI research, which ound thatmany agree with the statement,

Its worth paying extra orquality goods. Word o mouthis signicantly more important inBRIC countries. People are morelikely to ask advice beore makinga purchase, a behavior that couldrefect lack o experience withcertain merchandise or simply aninclination to conduct more diligentresearch beore spending money.

Europe 61

Brazil 70

Russia 72

India 73

China 72

US 40

47

52

6039

44

27


26/104


Global Brands 2012

India

DiverseDierentDetermined

In India, many peoplewho drink cola preera local brand. Sports

ans ollow cricketrather than ootball. Andwhile brands matter,a brands reputationoten is closely linkedwith that o the parentconglomerate.In other words, as a consumer society,India is much the same as the rest othe world and also very dierent. Thisparadox inorms the growing importanceo brands in a rapidly transorming societyo more than a billion people o diverselanguages, cultures and beliesa ewincredibly wealthy, others entering anexpanding middle class and many stillextremely poor.

Marketing approaches that work in otherparts o the world are not automaticallyeective in India where individuals at allincome levels are being exposed to brandseither through travel, entertainment orthe increasing presence o global brandsin India. While desiring internationalbrands, Indians also are increasingly sel-condent about their national identity.

This duality, to an extent, depends onproduct category. In ashion, ootwearand accessoriescategories that exhibitpersonal taste or statusoreign brandsexert great appeal. When Indian heritage

is a considerationwhich also could bein ashion and accessories as well asood and beverageslocal provenancebecomes important both or domesticconsumption and export.

Consumers also preer local brands thatexcel at innovating and improvising tocreate products that precisely meet localneeds. This resourceulness, considereda particularly Indian talent, is knownby the Hindi word Jugaad. In anothermarket characteristic unique to India,

large conglomerates control much othe Indian economy, and consumertrust oten depends on a combination ocorporate and brand reputation.

Conglomerates andgovernment infuencebrand growth

Usually run by powerul entrepreneurialamilies, the leading conglomeratesinclude Tata, Reliance and Bharti. They

operate in multiple industries, suchas telecommunications, cars and retail,and market many o Indias leadingbrands. As in other BRIC countries,the government also infuences therise o local brands with regulationsthat moderate the entrance o oreigncompanies.

Early in 2012, India relaxed restrictionson single-brand retailers, enablingbrands such as Nike to expand morereely. Walmart, and retailers that sell

multiple brands, must combine withan Indian partner and operate onlywholesale outlets. Walmart entered Indiain a joint venture partnership with Bharti.Tesco partnered with Tata.

An eort to liberalize the Foreign DirectInvestment rules (FDI) ailed 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 o the momand pops rather than their competitors.

Because this is India, the preerredoutcome is not just one winner, butinstead a reconciliation o competing

interests that eventually produces moreopportunities. In this complicatedprocess, the multi-nationals gain marketexpertise rom their local partners,while the partners learn rom the multi-

nationals and gain time to strengthentheir own retail brands. Meanwhile,anticipating the eventual end o theFDI regulations, all the major playersinvest in much needed improvementsto inrastructure including roads andrerigeration or ood.

Fundamentals or brandbuilding in India

1. Be meaningully dierentIndians generally like brands.And they are amiliar with manybrands rom the West and othermarkets. Success requires bringingsomething new and dierent.

2. Be consistent in thoughtand executionThese qualities will help to buildtrust in the brand.

3. Take into account theregional dierencesMany countries are diverse. Butew are as large and distinctive asIndia in language, diet, belies andcustoms.

4. Emphasize ashion, ipossibleFor some categories, such astelecoms, cars or banking, Indians

might preer an Indian brand. Whenit comes to ashion, however,international brands tick all theboxes.

5. Remember its ademocracyIndia is the worlds largestdemocracy, which means thatworking underneath apparentchaos and slow process is asystem that respects the individualand attempts to airly balance

competing interests.


27/104

Understanding marketdiversity is key

Penetrating India also requiresunderstanding the countrys rich

diversity. The local dairy brand Amul,ormed as a armer cooperative in 1946,is well regarded, or example, becauseits trusted and its products appealto the Indian palate. Similarly, thedominant cola brand in India is ThumsUp in part because o its somewhatspicy taste and its consistent positioningas a macho drink with a strong favor.Coca-Cola purchased Thums Up in theearly 1990s.

And as oten is the case in ast growingmarkets, consumer product multi-nationals, such as P&G or Unilever,introduced brands to India years ago.Unilever, or example, arrived as LeverBrothers in 1933. Since merging withan India company over 50 years agoits operated as Hindustan Unilever. Insome cases the multi-national brandsare so insinuated into the market theyreconsidered Indian. Maggie Noodles,popular in India and other Asian markets,is a Nestl brand. The Maruti Suzuki car,

one o the rst popularly priced cars inIndia is seen as an Indian brand.

The prolieration o local brands is mostevident in telecommunications where15 operators resist consolidation andbattle or a share o almost 900 millionmobile phone subscribers. The Indianbrands have done a relatively good jobo dierentiating in a category wheretelecoms worldwide struggle againstbeing viewed simply as the commodityconduits o voice and data.

One o the pioneer brands, Airtel, knownor its network strength, appears in theBrandZ Top 100 ranking or the rsttime this year. Vodaone Essar ocuseson 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 shiting their eortsrom gaining new users to increasingper-user engagement and revenue.The change in part refects growingconsumer afuence.

Aspiration becomesa actor

Greater prosperity also impacts thecar category, which is experiencing

increasing sales and brand segmentationboth at the high and low ends o themarket. Tatas repositioning o its Nanobrand illustrates these developments.Tata introduced the Nano, in 2009, asan entry-level car or people transitioningrom two-wheel to our-wheel vehicles.Marketing emphasized relative saetyand aordability. When sales fattenedater an initial surge, Tata realizedthat customers liked the car but notits association with their limited

nancial circumstances.Adding some amenities, Tata madethe car more aspirational. Customers,it seems, wanted a symbol o newpossibilities not a rearview reminder otheir recent and limited past. The Tatabrand overall has beneted rom theknowledge gained rom its acquisition oupscale Jaguar Land Rover, although themarketing or those brands has been lowkey so ar. The rising Indian economycontinues to drive sales o other Indian

car brands, such as Mahindra.Exports are increasing, too, particularlyto Arica where the Mahindra brandexports its less expensive models. Tatatrucks are popular in Malawi. The Indianbrands best known internationally arethe IT giants Wipro and Inosys, whichprovide B2B solutions in most industrysectors, and ICICI Bank. A majorintegrated nancial institution, withoces 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 o status than a local Indianbrand, generally. In practice, however,people in smaller, rural markets may ndthat the Indian bank brand understandstheir needs more deeply. Andgovernment regulations may provideregulatory protection or the local brand.Amid all o these developments andapparent contradictions its important toremember theyre shaped by Indias longhistory and modern status as the worldslargest democracy.


India2727

Source: Global TGI research based on

analysis o 20-to-54 year-olds in the largestcities in BRIC markets and a countrywidesample in the US and Europe (UK, France,Germany, Spain)

Age% o population

Household size% o population

51

25

24 1

5

27

7

26

22

33

45

46

11

36

67

48

5853

6

BRIC FOUNDATIONS

DEMOGRAPHICS

India 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 o the population(51 percent) is 20-to-34 yearsold. Indian households arelarger. Almost hal o the nationshouseholds include more than vepersons. Household size in theother BRIC countries more closelyresembles the US and Europe.

Brazil

Russia

India

China

US

Europe

1-2 persons

3-4 persons

5+ persons

20-34

35-54

54

44

56

44

49

51

59

41

62

38

61

39


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Global Brands 2012

China

Chinesebrandsbenet romimprovedquality andsharp pricing

Chinese brands arecompeting moreeectively.Several actors drive this competitiveness.First, Chinese consumers have becomemore sophisticated about brands. Second,Chinese brands have improved in quality,leveraged their deep market knowledge

and maintained a price advantage.

The growing strength o Chinese brandsis especially apparent in categorieswhere consumers discern no unctionaldierences between the multi-nationaland Chinese oerings, and the Chinesebrand is cheaper. Some multi-nationalbrands have operated in China or solong theyre well accepted. But longevityis no longer an adequate advantage.

Critically, these changes are happening

as the ocus o brand expansion shitsto Chinas interior cities and villageswhere consumer valuesthe preerenceor price and unctionality over statusappealavors Chinese brands. Having

improved unctionality, Chinesebrands ace the challenge o improvingemotional appeal.

Even Chinese nancial 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 unctional andemotional appealThe beer and spirits category illustratesthe ability o Chinese brands to cultivateemotional appeal. Moutai enjoys anemotional bond with Chinese consumersbased on heritage. Moutai is a brand obaijiu, the traditional Chinese alcoholicdrink distilled rom sorghum andproduced in China or at least 2,000 years.

Similarly, the Chinese beer Snow

distinguished itsel in a category where realdierentiation is dicult. Although littleknown outside o China, Snow is one othe worlds most-consumed beers. Severalyears ago, the brand launched a marketingcampaign around the idea o adventurewith a campaign called Globe Trekker.

As part o the campaign, selectedvolunteers have explored exotic locationssuch as Tibets Brahmaputra Canyon. Inthe summer o 2001, Snow produced oneo 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 dierentiateitsel rom Mengniu, its chie competitor.In contrast, the detergent brand BlueMoon exemplies the triumph ounctionality and price. It eectivelychallenges multi-national brands in

China, because it works and costsapproximately 30 percent less. Buildingon this reputation, the company isexpanding its product line to includesanitizer and other products.

Fundamentals or

brand 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 trust

Consumers are looking or brandsthat combine innovation and trust,qualities increasingly ound inChinese products as the countrybegins to market as well asmanuacture brands.

3. Understand the nuanceso the youth marketChinas young people are avidconsumers and eager to obtaingreater material success than theirparents generation. But theyre

not a monolithic purely materialisticgroup. With growing afuencemany eel a greater sense o socialresponsibility.

4. Find customers usingsocial mediaChinas Internet is more ragmentedthan in most countries. WhereFacebook or Twitter may dominatetheir sectors in certain countries, inChina several dierent brands willoer the equivalent services. Reaching

consumers requires knowing they canbe ound in many places.

5. Use a media mixMobile is quickly becoming thepreerred way many Chinesepeople, particularly the young,access inormation especially withthe growing popularity o 3G smartphones. But people still spend a loto time with traditional media, suchas TV, which cant be ignored.

BrandZ Top 100 Most Valuable

Global Brands 2012


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China29

Brand building crossesborders

Chinese brands are slowly growingtheir export sales. In the initial stages

o establishing brands or export, brandswith Chinese heritage enjoyed thegreatest success as they connected withcommunities o Chinese people livingoutside o China. Moutai, or example,enjoys success outside o China.

Along with beer and spirits brands,traditional Chinese medicines also havereached overseas consumers, primarilyin Chinese ex-pat communitiesbut increasingly among the general

population interested in wellness andherbal remedies. Among the better-known brands is Tong Ren Tang, whichwas established in 1669, at the beginningo the Qing Dynasty.

Many Chinese technology companieshave prospered as OEMs (OriginalEquipment Manuacturers), creatingproducts or major brand marketers romthe West. Some o these companies nowattempt to leverage their vast knowledgeto market their own brands and enjoy

higher margins. A ew technology brands,such as Lenovo, already have achievedhigh brand recognition outside o China.Established as a small electronics supplier,called Legend Group Holdings in 1984,Lenovo today is one o the worlds largestproducers o PCs. It launched the Lenovobrand in 2003, and two years later acquiredIBMs Personal Computing Division.

Haier, one o Chinas largest homeappliance brands, is a world leader inwhite goods. Established as a rerigeratormanuacturer in 1984, the brand now sellsits rerigerators, washing machines, airconditioners and other products throughleading mass merchants in the US and Europe.Midea also manuactures air conditioners andhousehold appliances that it marketsworldwide. Rival Gree specializes in airconditioners and markets globally.

The sports apparel brand Li-Ningexperienced diculty in the domesticmarket last year but, determined to build the

brand 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 brands

Even the large SOEs are engaging inbrand building to acilitate increasedoverseas expansion. Until recently, these

enterprises placed less attention on brandbecause they enjoyed monopolisticdominance. But as Chinas economychanges, many o these banks, insurancecompanies, telecoms, and oil and gasgiants compete against each other andalso seek growth outside o China.

In May 2011, ICBC (Industrial andCommercial Bank o China) receiveda license to open a branch in Mumbai,and it recently established a presence inKarachi, Islamabad and Canada and also

aspires to grow in Russia, the MiddleEast and Latin America. ICBC is theworlds most valuable nancial brand,ranking 13 in the BrandZ Top 100.

Chinas major oil and gas companiesSinopec and PetroChinaengage inbrand building to help establish importantrelationships as they expand abroad andalso to build credibility domestically.Sinopec, which operates Chinas largestnetwork o gas stations, sponsors majorevents including Formula One racing.

For COFCO, a large, multi-brand oodconglomerate, domestic marketing isimportant, not to raise the corporateprole, but to promote its brands,which include category leaders such asFulinmen, a producer o cooking oil andrice, and Great Wall wine.

Western brands dominatesome categories

In some categories, such as cars, Chinese

consumers view local brands as lowerquality than the Western brands. Whilethe Chinese government initiallysupported production o 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 manuacturers.Because most o the production or theseWestern brands happens in China, many

Chinese consumers view these cars asChinese. VW became amiliar becauseo its use as taxis. Audi comprises alarge share o government ocialvehicle feets.

Source: Global TGI research based onanalysis o 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 amily% who agree

I am very good atmanaging money% who agree

687377

83 84

Russia

India China

US Europe

Brazil

BRIC FOUNDATIONS

VALUES ANDATTITUDES

While its important to understandthe unique aspects o eachcountry, its also necessary tond the areas o commonality.People in all o the BRIC countriesshare roughly the same values asinhabitants o the US and Europe

regarding the centrality o amilyand the ability to manage theirmoney. In related research, TGIalso ound that people acrosscountries and regions armed theimportance o lasting relationshipsand said that time was moreimportant than money.

75

Brazil

Russia

India

China

US

Europe

5448

69 60

44 59


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Global Brands 2012

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The total value o the2012 BrandZ Top 100Most Valuable Global

Brands rose marginallylast year by 0.4 percentto $2.4 trillion, asa perect storm oeconomic stress,political uncertaintyand natural disastersaected brands across

categories.


Global Brands 2012

Overview


31/104

The insurance category experiencedthe sharpest decline, 16 percent,in part because o the exposure tocatastrophes including the tsunami inJapan and fooding in Thailand.

Other actors impacting brand valueincluded the BRIC slowdown, Europesdebt crisis, political uncertainty in the USand the erosion o trust culminating in theOccupy Wall Street movement.

Despite this challenging context, thestrong perormance o many brands acrossdiverse categories pointed to the continuingimportance o brand and a steadyappreciation o brand value. During thepast six years, between 2006 and 2012, the

total value o the BrandZ Top 100 MostValuable Global Brands rose 66 percent.

Brand powermade a dierenceStrong brands enabled companies toendure continued economic weaknessand thrive in the transition to recovery.With brand value increases o 31 percentand 26 percent, respectively, HomeDepot and IKEA were among theTop Risers based in part on the steady

housing recovery, at least in the US.Audi became a Top Riser, with a brandvalue increase o 23 percent, andVolkswagen appeared in the BrandZTop 100 or the rst time. Both car brandsexperienced strong growth worldwidein the recovering US, slowing China andstruggling Europe.

Recognizing the power o their valuablebrands, several organizations took stepsto assert control over this critical asset.Apple announced, early in 2012, that it

would spend cash reserves to buy backshares. Ralph Lauren, Hugo Boss andCalvin Klein took steps to increase thenumber o brand-owned stores andreduce ranchises. 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 or the rst time.

Even organizations that developedas government owned or controlled

bureaucracies increasingly recognized theimportance o brand as they aced newcompetitors at home and expanded abroad.Once a staid Russian nancial institution,Sberbank was among the Top Risers,

Almost hal o the Top100 brands lost value.Brands last declined

this broadly during thedepths o the 2009global recession.But nancial perormance, not brand,was the more critical determinant or 35o the 49 brands that declined.

Brand Contributionthe measuremento brand strength exclusive o nancialsor any other actorsgenerally remainedstable or increased or most brands and

provided the buoyancy to navigate theyears turbulence.

One in ve o the 2012 BrandZ Top100 brands came rom a ast growingeconomy. But the total value o thosebrands slipped slightly or the rst timeto $330.8 billion because o the businessslowdown in Brazil and China.

The number o ast growing economiesrepresented in the BrandZ Top 100Most Valuable Global brands expanded,however, with the appearance o the rstbrand rom Arica, the South Aricantelecom MTN.

In addition, two Chilean retailers,Falabella and Sodimac, made the list oleading retailers. And on the strengtho its business in ast growing Asianeconomies, Commonwealth Bankbecame the rst Australian brand in theBrandZ Top 100.

Brand value fuctuations in the 2012BrandZ ranking were spread evenly

across the 13 categories covered. Sixcategories rose in value and six declined.The

Documents

Top100 2012 BrandZ Report