2009 Has Defined New Moral Standards For Business

Media Release - Embargoed until 6am Friday 18 September 2009

Interbrand’s Best Global Brands Study Says 2009 Has Defined New Moral Standards For Business

Auckland, 18 September 2009 - This year has been defined by a new set of moral standards for business behaviour, according to the world’s leading brand authority, Interbrand, which published its 10th annual Best Global Brands Study today.

Outlining a number of significant trends the Business Week/ Interbrand study suggests that many of these can be explained by major shifts in consumer behaviour, interaction and demand.

“Today’s consumer is driven by a need for transparency, honesty and relevance in a climate where trust has been severely eroded. Well-known and trusted brands offering something relevant to people have prospered while those associated even loosely with finance and government institutions have taken a heavy hit,” says James Bickford, Interbrand New Zealand’s Head of Strategy.

Coca-Cola has taken out the top spot for the 10th year in a row - the 123 year old company weighing in with just under US$69 billion in brand equity, up three percent from last year, once again proving that aggressive investment in world-leading advertising combined with a resonating brand promise is a winning combination.

The top 10 was rounded out by (in order) IBM, Microsoft, GE, Nokia, McDonald’s, Google, Toyota, Intel and Disney.

Google, proprietor of the world’s most popular search engine, experienced the largest increase in brand value across all categories as the company moved from 10th position last year to 7th position this year with a net brand value of US $31,980 (up 25 percent).

Fast food giant McDonald’s saw an increase in year on year brand value and ranking, climbing four places from 2008, believed to be a result of its plethora of new products catering to the health-conscious consumer, along with its premium positioning and café style offering.

Unsurprisingly, consumer cynicism towards major finance and technology companies has taken a major toll on the industry’s visibility across the study, with Microsoft, GE, Nokia and Intel all experiencing decreases in brand equity despite managing to stay in the top 10. No one fell harder in 2009 than finance.

“10 years on we can definitively say that a company’s brand is more important now than ever before. An unstable economic climate combined with increasingly discerning customers has elevated brand integrity and connection to heights never seen before,” says Bickford.

The report presents New Zealand businesses with a number of insights on how to best manage and grow brands in today’s market.

“Tough markets demand differentiation and value like never before: the Business Week/Interbrand Best Global Brands Study can offer local businesses a strong direction on how to get ahead and stay ahead.”

Key take-outs from the 2009 report include:

Investment – More is more. Organisations experiencing success are investing aggressively on a number of levels. In the traditional sense, companies like Nike are tripling their marketing investment and reaping rewards (+4 in standings YOY). However, investment has taken on a wider definition this year, and successful companies are taking things a step further by developing brand propositions fuelled by investment in consumer-focused product innovation. A good example of this is Campbell’s with their low-sodium product development. By investing in both monetary terms and in your consumer, you are more likely to drive success.

Focus – make it clear. Differentiation is key to surviving in this unstable marketplace. To succeed, make sure you have a powerful and differentiating proposition and communicate this clearly in a unique and creative manner. Internationally, lesser-known brands such as clothing line company Zara have overtaken giants like GAP through a clearly defined and communicated brand campaign.

Grow from the core. Make like McDonald’s and extend your core offering beyond the traditional. By extending their menu to encompass salads and light options, McDonald’s has captured a much greater audience and grown market share. The launch of the Angus beef burger and the successful McCafe operation in New Zealand are good examples of this market extension, and again, it’s working.

All of these tips need to be considered within the context of the other major trend identified by the report – connectivity. The exponential growth of social networking sites such as Facebook and Bebo has provided consumers with a voice for their opinions about products across the world, instantly. At the same time, it has exposed companies that say one thing and do another.

“Brands need to listen to their consumers, moving from deciding what is right for me to what is good for my customers. If you’re not listening, and responding accordingly, you will lose,” Bickford says.

The three ‘recession-resistant’ branded business models are:

- Brands offering an increasingly relevant proposition eg a strong value position in both B2B and B2C markets

- Brands that offer access to low-commitment, branded experiences eg legacy FMCG and quick dining

- Top-tier luxury brands whose customers have largely withstood the impact of the economic crisis

The brands that have done badly are:

- Those with fundamentally broken business disconnected from their underlying business model and customer, some of which are now wholly or partially owned by governments

- ‘Heavily invested’ businesses that have failed to remain agile, scaling back investment and thus weakening their competitiveness when the upturn arrives

ends

Interbrand New Zealand was launched in 2008, offering design and brand management services to some of New Zealand’s biggest brands. Founded in 1974, Interbrand is recognized for being at the forefront of the dialogue on brands as business assets. Today, Interbrand is amongst the largest brand consultancies and has grown to include 36 offices in 25 countries. The combination of rigorous strategy and analytics with world-class design creativity help its clients to create and manage brand value in all market dynamics. It is widely respected for its annual study, The Best Global Brands, and creating a broader platform for the discussion on brands in the Webby-award winning website brandchannel.com. For more on Interbrand, visit www.interbrand.com

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