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March 7th 2013 Nigel Hollis

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90%of the world’s

L E A D I N G B R A N D S

Agenda

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1. Measuring Financial Value2. Creating Financial Value3. Measuring the drivers of Financial Value

How much is this brand worth?

US$1.6 Billion

Strong brands outperform their peers

-60%

-40%

-20%

0%

20%

40%

60%

Apr 06 Aug 06 Dec 06 Apr 07 Aug 07 Dec 07 Apr 08 Aug 08 Dec 08 Apr 09 Aug 09 Dec 09 Apr 10 Aug 10 Dec 10 Apr 11 Aug 11 Dec 11 Apr 12 Aug 12 Dec 12

BrandZ™ Strong Brands Portfolio vs. S&P 500(Apr 2006 - Dec 2012)

BrandZ™ Portfolio

S&P 500

15.3%

51.1%

Source: Bloomberg; MB Optimor London Analysis

BRANDED EARNINGSWhat proportion of a company’s earnings can be attributed to a brand?

BRAND CONTRIBUTIONHow much of these earnings are due to the brand’s close bond with it’s customers?

BRAND MULTIPLEWhat is the growth potential of the brand-driven earnings?

$

%

M

Valuing a brand is more than just guesswork

Guesswork!

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What is the world’s most valuable brand worth?

$182bn

$77bn

What is the world’s most valuable brand?

Which brand is the more valuable?

$95bn

$74bn

$34bn

$17bn

Which is worth more?

Which is the world most valuable financial brand?

$42bn

$38bn

Which declined more between 2011 and 2012?

-17%

-18%

+61%

+74%

Which increased most between 2011 and 2012?

11.5bn

9.3bn

Which brand is worth more?

Coke is the worlds largest cpg brand. What comes next?

$15bn

$18bn

7. $74bn

10. $47bn

9. $49bn

8. $69bn

4. $95bn

6. $74bn

2. $116bn

1. $183bn

5. $77bn

3. $108bn

Global Top 10 in 2012

The importance of brand equity differs by category

Agenda

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1. Measuring Financial Value2. Creating Financial value3. Measuring the drivers of Financial Value

Brands can create value in 4 ways

Commanding a premium now

Creating demand for the brand or service now

Creating the potential to grow future market share

Extending to new uses, countries and categories

FinancialValue

Growth

Brand

What consumers

experience and remember

What the brand does and says

21

22

MeaningfulMeaningful

23

DifferentDifferent

24

SalientSalient

Strong brands offer a meaningfully different experience

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ResonancePurpose

Delivery Difference

MeaningfullyDifferent

Experience

Match the driver to the car

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Prince Alwaleed bin TalalAlsaud

Mukesh Ambani Ingvar Kamprad

Rolls Royce Phantom Mercedes Maybach 62 Volvo 240 GL

Worth: $30bn Worth: $23bn Worth: $20bn

IKEA: largest retailer of furniture in the world

IKEA’s purpose is to create a better life for people…but how?

By removing squeezing out every cent from the design, manufacturing and transport of its products.

Prices fell by 2.6 per cent in 2011.

Delivery: any brand needs to “mind the gap”

"Well we have two choices. Either you make the bank a better place to work, or I can

create a worse brand.“Chris Clark

Head of marketing, planning, and business strategy at HSBC

HR Manager complains that work experience does not match brand image:

Delivery: how well the brand’s experience lives up to its purpose

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0%10%20%30%40%50%60%70%

0 to 1 2 to 3 4 to 5

NUMBER OF POSITIVE SENSES RECALLED

The more positive and distinctive sensory impressions come to mind, the more loyal

people are to the brand.

Source: BRANDsense survey conducted in US, UK and Japan

“The girl does not only tell it has good fragrance, but also teaches me how to smell it properly – should not directly smell from the bottle, but wave the hands back & forth to air the fragrance out, as to smell the perfume”

Resonance: people appreciate the brand for what it does and how it makes them feel

0 50 100

Offer something different

Are leading the way

Made by companies you

can trust

DoveNatura

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Difference: provides a reason to choose and justifies a price premium

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Average Potential for brand to grow

1.3%

Average potential for brand to grow

15.9%

Average potential for brand to grow

-7.2%

Brands that ARE different

Brands that AREN’T different

The five facets of effective brand amplification

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Findability

AffordabilityExtendability

CredibilityVitality

Strong brands amplify their meaningful difference drive financial value growth

Findability: ensure your brand is everywhere people might want to find it

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VisibilityAvailability

Findability

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

Credibility: enhance meaningful differentiation through innovation and association

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Vitality: ensure your brand is seen as contemporary, salient, talked about and fresh in look and feel.

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Break the mould, create something compelling & new

Video title: Coca-Cola Security Camerasyoutube video link: http://www.youtube.com/watch?v=auNSrt-QOhw

Challenging preconceptions and creating a sense of momentum helped Audi boost sales

Six major car launches in 2008But Audi remains considered but not chosenIn 2010 the “Shock the Sheep” campaign challenged the status quo After shifting perceptions Audi has enjoyed strong sales growth and improved margins 80

85

90

95

100

105

110

115

2008 2009 2010 2011 2012

DesirePrice

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Challenging preconceptions

Affordability: justifying your price point while making it accessible to more people

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0

20

40

60

80

2007 2008 2009 2010

Bought Last

Relevance

Extendability: leveraging a strong brand into new categories and countries

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Dove grew from global sales of about €300M in 1990 to becoming Unilever’s first €3B brand in 2011.

Bar soap 1

Dish soap

Body wash

1955 1965 1995 19981991 1997 20102007

Deodorant

Hair care

Anti-aging range

Men’s care products

2002

Global expansion:

launched to 55 countries

between 1991-1994.

Body lotion

1999

Facial cleansers

How successful brands drive financial value growth

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Findability

AffordabilityExtendibility

CredibilityVitality

Amplify

ResonancePurpose

Delivery Difference

MeaningfulDifference

Define

FinancialValue

Growth

Grow

Agenda

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1. Measuring Financial Value2. Creating Financial value3. Measuring the drivers of Financial Value

BrandDynamics has evolved significantly over time

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1996 1998

2010

2010

20092003

2003

20051992 2012

Launch of BrandDynamics

Launch of BRANDZ

Launch of the ‘Paw Print’ analysis

Bonding Factor analysis

Launch of D&A

New model

Development of Voltage2.0

Development of the Brand

Strength Score

Development of the Value Driver workshops

People are more predisposed brands they find meaningful, different and salient

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Predisposed customers will be more likely to choose your brand, pay a premium for it and the brand will be better poised to grow market share

Meaningful

Salient

Different £ €$

¥BrandAssociations

In-marketFacilitators

Brand Predisposition

Average Brand Top 100 Most Valuable Brands

Power 11

Salient 127

Different 124

Meaningful 116

Power Index 171

Salient 100

Different 100

Meaningful 100 Power

6

Power Index 100

Salient 120

Different 240

Meaningful 133

Power 22

Power Index 199

Salient 130

Different 59

Meaningful 95

Power 13

Handsets – France 2012

Power Index 120

Salient 212

Different 162

Meaningful 183

Power 32

Power Index 446

South Africa 2012

A single, accurate measure of demand for the brand

The relative price point that the brand’s equity can support

The likelihood that the brand will grow value market share

Three new measures of brand equity

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POWER

PREMIUM

POTENTIAL

Stronger brands produce better returns

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Low Potential

High Potential10%11%12%13%14%15%16%

Low PowerHigh Power

Average operating profit reported as a percent of revenues

Source: BrandZ and annual company reports for 49 companies

How successful brands drive financial value growth

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Findability

AffordabilityExtendability

CredibilityVitality

Amplify

ResonancePurpose

Delivery Difference

MeaningfulDifference

Define

FinancialValue

Growth

Grow

Conclusions

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•Brands are the most valuable asset that many companies own – they creating lasting financial value•Brands exist in the mind – you can only assess their value and potential if you know what people think

•Strong brands provide a meaningfully different experience to people –marketers must not rest until they build this•Once you have this then has to be amplified through all available channels•Vitality is a key battleground. Communications can frame your brand, build salience and talkability