1. March 7th 2013 Nigel Hollis
1

2. 90%
of the world’s
LEADING BRANDS
2

3. Agenda
1. Measuring Financial Value
2. Creating Financial Value
3. Measuring the drivers of Financial Value
3

4. How much is this brand worth?
US$1.6 Billion

5. Strong brands outperform their peers
BrandZ™ Strong Brands Portfolio vs. S&P 500
(Apr 2006 - Dec 2012)
60%
51.1%
40%
20%
15.3%
0%
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
-20%
BrandZ™ Portfolio
S&P 500
-40%
Source: Bloomberg; MB Optimor London Analysis
-60%

6. Valuing a brand is more than just guesswork
BRANDED EARNINGS
$ What proportion of a company’s earnings can be attributed to a
brand?
BRAND CONTRIBUTION
% How much of these earnings are due to the brand’s close bond
with it’s customers?
BRAND MULTIPLE
M What is the growth potential of the brand-driven earnings?

7. Guesswork!
7

8. What is the world’s most valuable brand worth?
$182bn
$77bn

9. What is the world’s most valuable brand?

10. Which brand is the more valuable?
$74bn
$95bn

11. Which is worth more?
$34bn
$17bn

12. Which is the world most valuable financial brand?
$42bn
$38bn

13. Which declined more between 2011 and 2012?
-17%
-18%

14. Which increased most between 2011 and 2012?
+61%
+74%

15. Which brand is worth more?
11.5bn
9.3bn

16. Coke is the worlds largest cpg brand.
What comes next?
$15bn
$18bn

17. Global Top 10 in 2012
1. $183bn 6. $74bn
2. $116bn 7. $74bn
3. $108bn 8. $69bn
4. $95bn 9. $49bn
5. $77bn 10. $47bn

18. The importance of brand equity differs by category

19. Agenda
1. Measuring Financial Value
2. Creating Financial value
3. Measuring the drivers of Financial Value
19

20. Brands can create value in 4 ways
Creating demand for the Commanding a
brand or service now premium now
Financial
Value
Growth
Extending to new uses, Creating the potential to grow
countries and categories future market share

21. Brand
What
What the
consumers
brand does
experience and
and says
remember
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22. Meaningful
22

23. 23
Different

24. Salient
24

25. Strong brands offer a meaningfully different
experience
Purpose Resonance
Meaningfully
Different
Experience
Delivery Difference
25

26. Match the driver to the car
Mukesh Ambani Ingvar Kamprad Prince Alwaleed bin Talal
Alsaud
Worth: $30bn Worth: $23bn Worth: $20bn
Rolls Royce Phantom Mercedes Maybach 62 Volvo 240 GL
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27. IKEA: largest retailer of furniture in the world

28. 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.

29. Delivery: any brand needs to “mind the gap”
HR Manager complains that work experience does
not match brand image:
"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

30. Delivery: how well the brand’s experience lives up to
its purpose
The more positive and distinctive sensory
impressions come to mind, the more loyal
people are to the brand.
“The girl does not
only tell it has
good fragrance, NUMBER OF POSITIVE SENSES RECALLED
but also teaches 70%
me how to smell it 60%
properly – should
50%
not directly smell
from the bottle, 40%
but wave the 30%
hands back & 20%
forth to air the
fragrance out, as 10%
to smell the 0%
perfume” 0 to 1 2 to 3 4 to 5
Source: BRANDsense survey conducted in US, UK and Japan
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31. Resonance: people appreciate the brand for what it
does and how it makes them feel
Made by
companies you
can trust
Are leading the
way Dove
Natura
Offer something
different
0 50 100
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32. Difference: provides a reason to choose and justifies a
price premium
Average Potential for Average potential for
brand to grow Brands that brand to grow
ARE different
1.3% 15.9%
Brands that
AREN’T different
Average potential for
brand to grow
-7.2%
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33. The five facets of effective
brand amplification
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34. Strong brands amplify their meaningful difference
drive financial value growth
Findability
Credibility
Vitality
Affordability
Extendability

35. Findability: ensure your brand is everywhere people
might want to find it
Findability
Availability Visibility
35

36. Tropicana’s new packaging caused revenues to
decline by $30 million in 2 months

37. Credibility: enhance meaningful differentiation
through innovation and association
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38. Vitality: ensure your brand is seen as
contemporary, salient, talked about and fresh in look
and feel.
38

39. Break the mould, create something compelling & new
Video title: Coca-Cola Security Cameras
youtube video link: http://www.youtube.com/watch?v=auNSrt-QOhw

40. Challenging preconceptions and creating a sense of
momentum helped Audi boost sales
Six major car launches in 2008 115
But Audi remains considered but 110
not chosen 105
In 2010 the “Shock the Sheep” 100
campaign challenged the status Desire
95
quo Price
90
After shifting perceptions Audi has
enjoyed strong sales growth and 85
improved margins 80
2008 2009 2010 2011 2012
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41. Challenging preconceptions

42. Affordability: justifying your price point while
making it accessible to more people
80
60 Relevance
40
20
0
Bought Last
2007 2008 2009 2010
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43. Extendability: leveraging a strong brand into new
categories and countries
Dove grew from global sales of about €300M in 1990 to
becoming Unilever’s first €3B brand in 2011.
1955 1965 1991 1995 1997 1998 1999 2002 2007 2010
Bar soap 1 Global
expansion:
launched to 55
countries
between 1991- Anti-aging
1994. range
Facial
Deodorant cleansers
Dish soap
Hair care
Body wash Body lotion Men’s care
products
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44. How successful brands drive financial value growth
Define Amplify Grow
Purpose Resonance
Findability
Meaningful
Credibility Financial
Difference Vitality Value
Affordability Growth
Extendibility
Delivery Difference
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45. Agenda
1. Measuring Financial Value
2. Creating Financial value
3. Measuring the drivers of Financial Value
45

46. BrandDynamics has evolved significantly over time
1992 2012
1996 1998 2003 2005 2009
Launch of Launch of Bonding Factor Launch Development of New
BrandDynamics BRANDZ analysis of D&A Voltage2.0
model
2003 2010
Launch of the Development
‘Paw Print’ analysis of the Brand
Strength Score
2010
Development of the
Value Driver workshops
46

47. People are more predisposed brands they find
meaningful, different and salient
Meaningful
Brand
¥
Associations
Different £ €
$
Brand In-market
Predisposition Facilitators
Salient
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
47

48. Top 100 Most
Average Brand
Valuable Brands
Power Index 100 Power Index 171
Salient
Meaningful Meaningful Salient
100
100 Power
116 127
Power
6 11
Different 124
Different
100

49. Handsets – France 2012
Power Index 199 Power Index 120
Meaningful
95
Meaningful Salient
Salient
133
Power 120 Power 130
22 13
Different Different
240 59

50. South Africa 2012
Power Index 446
Meaningful
183 Salient
Power 212
32
Different
162

51. Three new measures of brand equity
A single, accurate measure of demand for the brand
POWER
The relative price point that the brand’s equity can
support
PREMIUM
The likelihood that the brand will grow value
POTENTIAL market share
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52. Stronger brands produce better returns
Average operating profit reported as a percent of revenues
16%
15%
14%
13%
12%
11% High Potential
10% Low Potential
Low Power
High Power
52 Source: BrandZ and annual company reports for 49 companies

53. How successful brands drive financial value growth
Define Amplify Grow
Purpose Resonance
Findability
Meaningful
Credibility Financial
Vitality Value
Difference
Affordability Growth
Extendability
Delivery Difference
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54. Conclusions
•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
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