1. The Best
Global Brands
Interim Report
How leading brands are navigating challenging
market scenarios

3. Throughout all the coverage, comment, and
conjecture on the economic crisis we have been
constantly answering questions about the Best
Global Brands and what lessons can be supplied
for creating and managing brand value in these
turbulent times. This considerable interest has
prompted us to create this report. We’ve realized
that we can provide tremendous insight for all
marketers on how these brands are performing
amidst the turmoil and offer perspective on the
world of branding before our full report of Best
Global Brands 2009 is published in September.
The Best Global Brands Interim Report 2009 4

4. The Best Global Brands Interim
Report: How leading brands
are navigating challenging
market scenarios
We are clearly living through a time of unprecedented change. The
economic landscape is the unavoidable subject on everyone’s mind. Within
this context of the unknown we have seen businesses scale back costs,
resources, and investments in order to face the challenges ahead. It’s an
understandable and prudent action within such a volatile market, but
what happens when you’ve cut as far as you can? What happens when you
switch focus to consider the revenues the business creates rather than the
costs you can save? Brands will either weather or wither in the storm.
Surely the next phase of the economic cycle
needs to focus on demand creation, not just With corporate value increasingly
cost reduction. Too often demand creation
seems too ambitious when consumers have driven by intangibles, like brands,
locked their wallets and purses shut. But as
we’re constantly seeing, consumers won’t buy companies should first look to
what they don’t want, and without demand
there’s no revenue coming in to fund even the reduce non-strategic assets.
most prudent cost base.
As such, we’ll see brands that create demand
and sustainable value for their businesses, Our Best Global Brands report has shown
even in these lean times. With corporate value time and time again that a brand is often an
increasingly driven by intangibles, like brands, organization’s most valuable asset. But then
companies should first look to reduce non- how do you manage such an asset in these
strategic assets. For businesses with more turbulent times? Ultimately, the difference
than 50 percent of their value in intangible between winning and losing – the difference
assets, namely the brand, reductions in between staying in business and being out of
marketing and innovation cut directly into business and between a brand living or dying
the strategic muscle of their organization. – is understanding the role a brand plays and
how it derives its strengths. This is absolutely
crucial in navigating today’s market. (Read
more on the Role of Brand and Interbrand’s process
of brand valuation in the sidebar “Calculating
brand value.”)
5 The Best Global Brands Interim Report 2009

5. Calculating brand value
Interbrand pioneered the methodology for valuing
brands some 20 years ago. In that time we’ve
valued over 5,000 brands around the world, and our
methodology has been used in courts of law, taught
in business schools, and applied by tax authorities. We
value brands using the same principles that analysts
use to value other business assets – by considering
how much brands are likely to earn in the future.
There are three components to
our methodology:
For our own purposes of valuing brands for the Role of Brand Index is derived from
in a public forum, at this time, it feels Interbrand’s database of more than 5,000
01 Financial analysis counterintuitive to apply data with such prior valuations conducted over the course of
inherent deviations. So while a financial 20 years. In-house market research is used to
analysis is integral to a valuation, if we are establish individual brand scores against our
to consider how to best manage a brand in industry benchmarks.
We forecast current and future earnings these circumstances, we should focus on
specifically attributable to the branded the other two components of a valuation:
products. We subtract operating costs Role of Brand and Brand Strength Score.
from revenue to calculate branded 03 Brand Strength Score
operating profit. We then apply a charge
to the branded profit for capital employed,
giving us the brand’s economic earnings.
For our public studies, our financial 02 Role of Brand Index This is a measure of the brand’s ability to
analyses are based on publicly available
drive choice and secure ongoing customer
data culled from a range of analysts’
demand, and it is used to assess the riskiness
reports to build a consensus estimate for
of forecasted Brand Earnings. The Brand
financial reporting.
The Role of Brand Index is a measure of Strength Score is translated into a discount
how much of the customer demand was rate, which is applied to Brand Earnings to
At this time, analysts are clearly finding it
dependent on the brand at the point of derive the Net Present Value of the brand. This
very difficult to forecast earnings with any
purchase and is applied to the economic assessment is a structured way of isolating
degree of conviction or accuracy. Everyone
earnings to arrive at Branded Earnings. By the specific risk of the brand in the context of
wants to know when markets will bottom
this assessment, the brand’s contribution the business. We compare the brand against
out, but in reality no one knows when the
to the earnings of the business is isolated. common factors of brand strength in
green shoots will appear.
For this study, industry benchmark analysis its marketplace.
The Best Global Brands Interim Report 2009 6

6. Understanding Role of
Brand and Brand Strength
to understand the
future of your market
Consider where your brand
Every business involves a promise (brand) and the lies within this framework.
fulfillment of that promise (business’s abilities). This will help you understand
the role brand plays within
Thus, creating and managing brand value requires your business as well as the
an optimization of the interaction between the strength your brand has in
competing in its market.
brand and the business. The Role of Brand defines Both the Role of Brand and
the degree to which demand is dependent on Brand Strength should be
regarded as active levers of
the brand, while Brand Strength is the ability the brand. They can be pulled
of the brand to generate and sustain demand. or pushed to drive the brand
to a different place within the
The two factors are essential for increasing matrix. However, you need an
business value; while Brand Strength is subject accurate understanding of how
the brand adds value to the
to the law of diminishing returns, a change in the current business and how it is
business model (and subsequently in the Role of positioned in the market.
Brand) will pave the way for further growth. A.
In Quadrant A (top right), we can see brands
The following two-by-two diagram provides a with a high Role of Brand and high Brand
Strength. While this may outwardly seem
useful framework to consider the relationship like the perfect spot, in many ways this is
between Role of Brand and Brand Strength. the most challenging position. What every
market has in common is the level of change
that has taken place. In turn, customers’
attitudes and economic circumstances have
changed in reponse to the shifts. How can
these brands therefore ensure that they
continue to maintain their Brand Strength
and Role of Brand when the dynamics and
competitive game of the market are in flux?
Positively, they have the ideal conditions
to allow them to pull away from their
7 The Best Global Brands Interim Report 2009

7. A
of
ole
hR h
competitors. Negatively, they risk losing Hig d, hig gth
A h Role of
value as customers look for tangible returns
h
n
Bra d Stre
n
Hig d, hig gth Bra
n
n n
Bra d tre
on their purchase decisionSand focus on price
an
Br“tangible” drivers. No
and other verifiable or
brand can be taking a timeout right now; C B
cutting into strategic assets like the brand
of d
can have negative short- and long-term ole ran w
hB o
C h you’re f hR Hig gth, l d
i
eo B h thelo
effects.gIf Rol w in Quadrant A, you needBrand w Hig d, low gth
n
Bra d Stre
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Stre of Bra
n
H d, lo gth Hig ngth, nd e
ran Stren
right strategies to stay there. Bra
n Rol
B re
St of B ra
nd
Bra ole
R
B.
The brands found in Quadrant B have high D
Brand Strength and low Role of Brand,
e of
meaning the brand is well positioned in a Rol
Low d, low gth
D Role of
market where the brand’s contribution to n
Bra d Stre
n
n
Low ow
The ngth
demand is rather small. nd, l classic advantage Bra
Bra d Stre
n
Ba
of this quadrant is the rfreedom to experiment
Ro th Ro th
le o
with new ways to grow the business.treng Strong le o ng
f Br S f Br Stre
and nd and
ran
d
Bra
brands have a strong foundation, and a lower B
Role of Brand in your category means a lower
risk of exposure or lower risk of stretching
your brand out. There is less vulnerability
The brands role in customers’ current decision-making D.
that create the process, a little more communication or a
refreshed touchpoint probably won’t change
Brands in Quadrant D are perilously full of
opportunities. It would be easy to feel brand
most value are much. But if businesses can innovate and
meaningfully change the parameters of
is redundant if you sit in a business that
focuses on demand drivers, which are not
the ones that choice, then they can raise Role of Brand in
their category and create a disadvantage
strongly dependent on brand (the competitive
advantage comes from other tangible or
are the most among competing brands. Brands that
have done this successfully include Zara,
intangible assets), and your brand fails to drive
demand. However, if competitive pressure
relevant to the Southwest Airlines, Amazon.com, and iPod. increases, the brand becomes a needed point
of difference. Increasing the Role of Brand or
customers’ choice. C.
In Quadrant C we find brands that have a
increasing the Brand Strength (or ideally doing
both) is the key to competitive advantage.
high Role of Brand but low Brand Strength Doing nothing allows the brand to wallow
to letting it run and seeing if the category score. This is a critical spot on the matrix. with the tide. Quite simply, brand owners
drivers can be tipped in your favor or using In this scenario the brand has an important need to make something happen - and fast.
the brand in other segments. However, the influence on purchase decisions but fails
juxtaposition between Brand Strength and to drive ongoing demand. This means your Understanding the combined effect of the
Role of Brand could also allow a brand to brand is important but risky, and your role your brand plays and the strength it has
become seen as “nice to have” rather than competitors tend to win the battle each are pivotal to your future in a marketplace
essential. For these brand owners, the brand time the product offering is similar. Brand in which demand is decreasing. The brand
is overdelivering for the business in a market building is required, and fast, as the category is closely linked with the business model,
where brand could be conceived as being structures will punish weak brands. If these which is evident in the interplay between
unimportant. In such circumstances the brand owners want to ensure the brand the provided customer benefits and their
challenge is to utilize the brand’s strengths to improves its ability to generate demand, dependence on the brand. Once the brand’s
increase the role that the brand plays in the strategies are required to improve the brand’s position in a market has reached a level of
market. The opportunity here is the ability to performance. To increase Brand Strength, diminishing returns, a change in the brand’s
change the relevance of the demand drivers the performance of the brand on those role in the business requires the consideration
and increase the weight on those that are criteria most relevant to the customer must of the business’s entire capabilities and is an
most dependent on the brand. be improved relative to that of competitors. opportunity to create value. The brands that
A change in the Role of Brand in a category This requires improving the attractiveness ultimately create the most value are the ones
requires innovation: new business models, of brand attributes (positioning) and/or that are relevant to the customer choice and
delivery infrastructure, and radical product the contact quantity with the customers understood as superior in their market.
benefit intensification. If brand plays a low (increase touchpoint investments).
The Best Global Brands Interim Report 2009 8

8. The markets of
the downturn
Ever since the economy began its demise in the
summer of 2008, we have watched new market
scenarios emerge. These market scenarios provide
unique challenges for brand owners, regardless
of which quadrant a brand falls into. Some of the
scenarios are interrelated and may well escalate
into the next sequential stage. All require different
techniques and strategies for managing the brand’s
safe passage through the ensuing turbulence.

9. 01 Market scenario
The Hurricane
This is the market that has grabbed the Demand drivers were consistent year over As in nature, market hurricanes are
headlines of the credit crunch and the year, and considering the global complexity transfiguring events. They don’t just dump
ensuing recession. While it steals the show, of the segment, customer needs were water, take out the power, and raise a few
it’s actually confined to a limited number of fairly common across both geographies shingles. Hurricanes possess a power capable
sectors - at least for the time being. and segments (insurance, private banking, of reshaping coast lines, claiming entire cities,
consumer, and corporate). With customer and changing lives forever. For businesses, like
The financial services market has received choice narrowly fixed, and with core products any real hurricane survivor, there will be no
the brunt of the hurricane. Before the and people varying very little from one player status quo to return to when the storm finally
crisis, financial services brands were often to the next, financial services players turned subsides. The cellar is flooded, the crops
predictable, undifferentiated, and not the product innovation engines to full tilt, have gone to spoil, and the customers are on
infrequently boring. Consider the client precipitating the financial storm of a century. higher ground, weary and wary of heading
environment before the hurricane. home.
it was in poor shape, no one could have they were either regional or too small have
predicted its dramatic descent and ensuing benefited from the erosion of trust in bigger
01 Sidebar nationalization. Overall, Citigroup’s fall competitors. While it would be a stretch
Brands in The Hurricane has signaled frightening warning call to to say it is a great time for these brands,
consumers: No bank is safe. these banks have successfully reassured the
markets and are less vulnerable in the long-
While Citigroup’s CEO’s announcement that term because they have regained or held on to
Banks were once synonymous with public he would take a token pay of $US 1 until the consumer trust. This is another effect of “The
trust and confidence. But for many, the company returns to profitability is a step Hurricane.”
current global meltdown in financial markets toward rebuilding shareholder and leaders’
had led to a recalibration of their relationship trust, much more needs to be done to rebuild Santander is a good example of a regional
both with their own money and with the trust internally and externally. It must take bank that is persevering despite the crisis.
banks that look after it. Consumers no measures to consistently build trust by Santander is Europe’s second bank by market
longer trust the financial sector. The global ensuring that the brand strategy and business value and is number one in Eurozone. While
meltdown and the financial industry’s risky strategy are aligned. A further understanding Merrill Lynch (ranked 34 in 2008), and JP
investments with consumers’ money have of its brand value, management for the Morgan (ranked 37 in 2008) once greatly
left stakeholders shaken to the core. The long-term, and a grassroots and human profited from their focus on brokering and
hurricane has hit – so how do banks regain effort to engage with stakeholders can all investment banking, Santander’s strong focus
consumers’ trust and how can corporate help Citigroup and other financial services on retail banking has left it in a much stronger
branding contribute to this effort? businesses navigate this terrain. The brands position now. The bank has even withstood
that display their leadership by taking active a blow from the Madoff incident; although
Citigroup, once the world’s biggest bank control, explaining why we’re in the mess, and Santander was one of the institutions most
by assets, and ranked number 19 on Best offering solutions will demonstrate that they affected by the scandal, it has also been
Global Brands 2008, lost US$ 253 billion of its are serious about real organizational changes one of the first to offer to return some of
market value in two years. The government and accountability. The fluctuations of the money lost by clients in the fraud. This
is taking a stake in the bank of 40 percent. Citigroup, in particular, reflect the confusion measure has been imperative in regaining
While last year its high exposure to subprime and volatile emotions consumers feel toward consumer trust. Santander is also using its
mortgages, high costs, and unfocused financial brands at this time. newly advantageous position to gain access
growth through badly integrated merger to liquidity and market share in core markets
and acquisition activities established that Meanwhile, banks that did not appear on such as Spain and the U.K. Both measures
the Best Global Brands 2008 list because suggest that Santander will emerge stronger
from the storm in the long-term.
The Best Global Brands Interim Report 2009 10

10. A recent study proves this case. In February
and March 2009 we helped a bank conduct The same wind open for new lateral movers and new
entrants. On March 30, Tesco announced
global research with clients across corporate
and private banking segments. These that shook the it would open 30 branches of what is
reported to be called Tesco Bank, a model
customers described a Category 5 market
hurricane. They don’t trust anyone and foundation it had been testing. (“Tesco to Open 30 in-
store ‘bank branches.’” Financial Times. March
they don’t believe anything. Their hierarchy
of needs has been turned completely on can also raise 3, 2009, p. 19)
its axis. The absolute basics are now the
highest-order drivers of demand (solvency, the sails. • Rebuild - Leverage the moment to rebuild
a new brand. It is too early to know who
stability, open for lending). It is a customer will do this successfully.
environment that has been truly transfigured. opportunity for brand owners is to capitalize
on the sea of change and build new brands. If you’re managing a brand in the midst of
Where is the value in the hurricane? What’s This is easier said than done but could a hurricane, recognize that the old ways of
the forecast? And can anyone turn it to his include: doing business have now changed. Create
or her advantage? The short answer: near, future scenarios based upon consumers’
term inevitability followed by longer-term • Renovate - If you’re a brand with valuable anticipated needs and start to maneuver
opportunities. consumer affinity, this market could be a new yourself in this direction as quickly as you
opportunity for you. For example, Sandoval can. Remember, the same wind that shook
The Swiss market is the perfect example of is using its strong focus on retail banking and the foundation (Lehman, Bear Sterns) can
the near term. The largest Swiss bank, UBS, legacy of trust to steal market share from also raise the sails. Indeed, a March 2009
has been one of the hardest hit during the competitors. Interbrand North American banking sector
hurricane. It is literally hemorrhaging assets, study not surprisingly shows that the
many of which are flowing into the state- • Reinvigorate - Dig deeper into customer role of brand in this sector has increased
backed Cantonal bank, and smaller, regional drivers of attachment and use the significantly. For brand owners in financial
banks like Credit Suisse and Raiffeisen. Like transformative nature of the market to services, this means the return on branding
the hotel operator outside town, regional affect broad and lasting business and brand innovation and investment has likely never
banks are profiting as customers flee the site strategy changes within your organization, as been greater. (Read about these brands and
of the storm in search of safety. But this is a one global financial services client is doing. more in the “Brands in The Hurricane” sidebar on
reaction among customers to businesses that the previous page.)
existed before but have now become more • Relocate - The simultaneous rise in Role
attractive because of these extraordinary of Brand and decline of trust and reputation
conditions. The larger, longer-term among incumbents leaves the door wide
02 Market scenario
The Depression
This is perhaps the most typical market of – although The Depression can be see across Managing a brand in such circumstances
these times. Demand once flowed with all categories, from cosmetics to electronics. means that you really need to have your
consistency but has since taken a downturn In the case of the auto industry, brands finger on the pulse of the marketplace.
that’s in tune with the economic conditions. like Honda and Ford have seen purchases
Demand has slowed as consumer spending postponed as consumers are in a “wait and Key questions brand owners should ask
has restrained. Whether this downturn is see” mindset about their spending on major include:
“U” shaped, bath shaped, or “L” shaped is purchases. They will eventually return, but
difficult to determine. What we do know is who knows precisely when or what it is that • What are the game-changing innovations?
that the trajectory of demand drivers will buyers will want. Brands need to stay in the
change according to the market. The auto game and ensure that they have the flexibility • What tactics can unlock demand?
industry is a typical example of this market to move with the market.
11 The Best Global Brands Interim Report 2009

11. inventory levels in the U.S., Europe, category to see a decline in demand.
and Japan. Although Nintendo’s Wii benefits
02 Sidebar And yet, despite a decline in demand,
from the trend for consumers to
Brands in Honda is doing some things right to
stay at home and spend time with
their family it may be affected in the
The Depression stay on top of the situation. While it
is dialing down some aspects of its
short-term by a number of factors.
First, a deepening recession in Japan
brand, it has aggressively focused
has slowed demand. As the country
on the new, innovative, hybrid car
Many leading brands that once had slides into a downturn, Nintendo has
“Insight,” which it just started selling
consistent demand for their products already reacted by cutting its sales
in Japan and which will be available
are now experiencing a depression. target by one million Wii consoles to
in Europe and the U.S. in April. The
Indeed, The Depression scenario is 26.5 million for the year. Likewise, a
small, stylish, compact eco car is
the most common result of the global soaring yen cuts profits on products
priced around $US 20,000 (20 percent
economic crisis. they sell overseas. The yen has been
cheaper than the price of a Prius)
hitting three-year highs against
This scenario is, of course, most and improves fuel efficiency with an
the dollar.
evident in the auto industry. Ford Eco Assist feature that gives drivers
and GM have seen stocks tumble, feedback and assigns scores on the Still, despite the worsening bottom
with bailouts imminent. While Ford efficiency of his or her acceleration line, the company claims to be
is combating layoffs and production and braking practices. Honda’s plan “recession proof,” citing the fun and
cuts by aggressively focusing on the was to introduce the car to capture innovation of its products. It still
launch of a new Ford Taurus to uplift the middle-class consumer that expects record, high revenue and
the brand’s reputation in the U.S. wants to be eco friendly and can’t operating profit due to its focus on
as well as focusing on the Chinese spend money in this consoles that appeal to people who
market, it is hard to tell if this will economic situation. do not usually play video games.
provide the real boost the brand So far, this strategy has proven
While it is hard to know if the car
needs. The question is: Given Ford’s successful. Whereas rival Sony, which
will be cheap enough to attract Gen
situation, is this game-changing catered to the overseas market and
Xers in the U.S. and Europe as well,
enough? real game player, is bracing for its
the current economy could very
biggest-ever loss this year, Nintendo
Meanwhile, Honda, which has well prove to be what ultimately
has performed relatively well.
proven to be a far more stable brand shifts the perception of hybrid cars
However, while sticking with what
over the last few years, is also in from an environmentally-conscious
works is a strong strategy that should
The Depression scenario. While we trinket to an intelligent, value-for-
prove Nintendo well in the long run,
predicted a revenue increase of eight money purchase. If so, Honda is well
unless Nintendo also focuses on
percent in 2008 and two percent in prepared to capture share, with even
maximizing customer relationships
2009 for Honda in Best Global Brands more hybrids in the work over the
and more game-changing
2008, given the current economic next five years.
innovations, it may see demand slow
situation, we now expect a decline of
While the auto industry may even more.
12 percent in 2008 and six percent in
have been the hardest hit by The
2009. Honda has also been forced to
Depression scenario, it is not the only
cut back on production to bring down
The Best Global Brands Interim Report 2009 12

12. • How do I maximize my customer
relationships?
• What’s the right portfolio to allow me
flexibility for the future I can’t see?
• What aspects of my brand do I need to dial
up and dial down? (Read about these brands
and more in the “Brands in The Depression”
sidebar on the previous page.)
03 Market scenario
The Fairer Winds
Someone has always got to win. In this The questions Fairer Winds brands should
market, the winners are the low-budget consider include:
brands that either by design or circumstance
have found themselves in the right place • How can I ensure that I hold on to my
at the right time. Low, cost, value retailers market share even after the crisis?
are typical examples here, as are fast food
outlets that steal share from eating out • How can I innovate and cater to a new
occasions that cater to sit down, family audience?
meals. Or, in McDonald’s case, directly
stealing share from Starbucks by presenting • How do I leverage my advantageous
itself as a more affordable coffee option. As position in a cost-effective way?
economic hardships become more apparent
to consumers they seek out value, and that’s • Where can I diversify? (Read about these
just what these brands offer. They currently brands and more in the “Brands in Fairer Winds”
benefit from the gravitational pull of value. sidebar on the next page.)
This is evident from fast fashion retailer Zara’s
successful profit despite the downturn,
particularly in markets like Japan where it has
gained share. The challenge for these brands
is to hold on to their new customers once the
economy recovers.
13 The Best Global Brands Interim Report 2009

13. 03 Sidebar
Brands in
Fairer Winds
The winds have knocked many brands
left and right. But for some, the winds
seem relatively fair. Low-budget
brands like McDonald’s, for instance,
have found themselves in the right
place at the right time. McDonald’s
had already strengthened its offering
over the past few years to update the
brand by focusing on more healthy
offerings. This update has helped
to give it a head start on capturing
a new, middle-class audience now
looking for a low-cost alternative to
dining out at more expensive eateries.
McDonald’s was also smart to seize
an additional opportunity by stealing
new audience share from Starbucks.
When consumers cited that Starbucks
coffee prices were now too high to
indulge daily, McDonald’s leveraged
its already, established coffee offering,
positioning it as a low-budget but
premium alternative. So far, its efforts
have paid off.
Similarly, while all retail has suffered,
fast fashion brand Zara has suffered
less due to its low-cost to quality
quotient. Zara, which has become
a truly global force over the last few
years, has a particularly rock-solid
business model, with a weekly rollout
of new stock and truly customer-
driven design that is based on input
from market specialists, buyers, and
designers. Zara has stayed committed
to its effort and has seen an increase
in sales, particularly in Japan, where
luxury brands once flourished. It
hasn’t taken a breather either, with
plans to extend into Zara Home and to
collaborate with MTV on a
clothing line.
The challenge for both, however, will
be ensuring that they hold on to their
new customers once the economy
recovers. This means that they need
to work harder than ever before on
their products and services, drawing
shoppers beyond just cost.
The Best Global Brands Interim Report 2009 14

14. 04 Market scenario
The Fog
Despite the market downturn putting a While in reality the business remains solid,
fog in front of certain brands, these brands brands in The Fog market scenario need to:
continue to benefit from a constancy of
demand. Still, it’s difficult to see through The • Stay vigilant and prepare for any oncoming
Fog, peering through to see what obstacles shifts.
are real and relevant and what obstacles may
be anticipated but proven untrue. This is a • Remain in tune with consumers’ attitudes
risky position because if you bet on hanging and demonstrate empathy with what they
on to the fundamentals (i.e., identifying and are going through.
reacting to more structural market changes),
then you may win. But if the downturn is • Stay on course while also remaining flexible
stronger than expected, the brand could fail. to adapt quickly to changes.
This position requires constant vigilance,
frequent insight refreshing, and the flexibility • Look to where you can streamline without
to quickly adapt to changes. These brands significant risk to your strategy. (Read about
need to continue on course with conviction these brands and more in the “Brands in the Fog”
but must constantly have all their sensors sidebar on the next page.)
on to see what dangers lurk around them.
Many of the FMCG companies and the
utility companies sit within this scenario.
Demand drivers for brands like Coca-Cola
are largely unchanged, and purchases can’t
be postponed. As such, Coca-Cola’s strategy
is to continue as usual, hoping to come
out stronger in the long-term. Meanwhile,
luxury brands like Louis Vuitton and Ferrari
are stable, but are cutting costs to plan for
obstacles ahead.
15 The Best Global Brands Interim Report 2009

15. audience still want to shop online? with a 10 percent decrease in profits,
Amazon needs to watch its market LVMH has already started strictly
04 Sidebar closely and continue to stay in tune controlling its costs, scrapping plans
Brands in The Fog with consumers’ attitudes. for a new 10-story Ginza flagship
store due to open in 2010. It has also
Similarly, Coca-Cola has maintained
lowered prices on all its products
While brands like Amazon, Ferrari, stability, with projections of growth
by seven percent to spur demand.
and Louis Vuitton continue to benefit of six percent from 2010 onwards.
Still, it continues to move forward
from a constancy of demand, the The results presented in the fourth
with creative line collaborations and
uncertainty of the future puts a cloud quarter 2008 are strong, with six
Neverfull, a lower-cost line. While
over their situation. percent growth in Latin America and
Neverfull has proved to be a best
double-digit growth in China and
Although Amazon’s better-than- seller, it – and price cuts – may well
India. Such results in a challenging
expected profits in the fourth prove to decrease the brand’s value
environment suggest that the brand
quarter could easily put it in “The in the long-term. Also, even when
was undervalued in Best Global
Fairer Winds” scenario, a few factors the market turns, it is unclear if
Brands 2008 as well. And yet, while
make its situation foggy. The site’s consumers will have the same interest
Coca-Cola is on track with the same
ability to search out the lowest price in luxury that they once did.
strategy that has served it well in the
offering for products and aggressive past, the potential fallout in emerging Ferrari is in a similar position.
promotion and discounts proved markets (its biggest growth area) may Although sales were up in 2008
attractive to long-time customers as impact the brand in the following (particularly in Eastern Europe),
well as customers new to Internet months. If that proves to be the case, and Ferrari has a track record of
shopping. The U.S. launch of its Coca-Cola needs to be ready to adapt profiting in even the worst of times
Kindle 2.0 in February 2009 also to a changing marketplace. (it continued to sell well even during
resulted in better-than-expected the 1970s fuel crisis), it has plans
returns. And yet, while it seems Some brands that are already
to shed 10 percent of its workforce.
clear that we may have undervalued beginning to prepare for an uncertain
Even though Ferrari President Luca
Amazon’s brand in our ranking, future include luxury brands Louis
di Montezemolo has been quoted as
Amazon still needs to stay on its toes. Vuitton and Ferrari. Despite a
saying “There will always be people
Without another Kindle launch to surprisingly higher than expected
crazy enough to buy a Ferrari,”
carry it through a tough year, will it sales in 2008, LVMH is likely to
because the future looks particularly
be able to perform as well? Also, after decrease in value. Japan’s economic
murky for luxury brands in particular,
the storm, will the newly attracted situation is likely to impact the brand
its taking measure to plan accordingly.
The Best Global Brands Interim Report 2009 16

16. Considering
the challenges
Brands that find themselves in The Hurricane first to understand how they will evolve, and
market scenario need to consider how their you’ll come out ahead.
brands should deliver in the future and create
appropriate strategies. Changing business If you’re benefiting from The Fairer Winds
models create the need for new brand scenario, you have no time to enjoy the
strategies and a clear understanding of the moment. As fast as this market came to you it
strengths and weaknesses of the existing can get carried away. Today’s consumers may
brand assets. At some point the market will be feeling the financial pinch, but they are just
recover, and so the challenge is to determine as demanding as they’ve always been. Low
what will constitute the right brand for that budget will not be a differentiator for long.
market of the future. We don’t know when
that market will rebound, and there will be And for brands lost in The Fog, your mantra
no grand announcement to signal it is time to should be to keep going with everything
start leading again. If you want to be a part you’ve got. Show confidence but keep moving
of it, you need to get to the front of the queue forward with all your sensors on. With so
and define your moment. much change occurring, you’re bound to hit
the odd bump in the road. Be smart about the
Brands within The Depression scenario need real trouble spots and do what you need to do
stamina and resilience. Keep your culture to avoid them. Find the level of adaptation to
buoyant. Make sure your people are focused maintain demand.
on customers. You’ll be fighting against the
depression for as long as it takes markets to Best Global Brands has shown time and time
turn around. Constantly take the pulse of the again that a brand can be an organization’s
market. Adapt and flex your offer to ensure most valuable asset. But such assets aren’t
that you remain in tune. Stop listening to just for good times. They also provide a great
your customers, and the depression you’re in source of confidence and opportunity as
could escalate into something truly nasty. You markets go through trials and tribulations. A
need all your wits about you to get through strong brand is a valuable asset that enables
this as quickly as possible without long-term you to tackle the future and the opportunities
damage to your business. You may well need it brings.
to redefine your business, so keep an open
and informed mind. Things will be in constant
flux. Consumers will adapt and evolve. Be the
17 The Best Global Brands Interim Report 2009

18. About Interbrand About Best Global Brands
Interbrand began in 1974, when the world Voted the third-most, influential industry
still thought of brands as just another word benchmark study by business leaders, Best
for logo. We have changed the dialogue, Global Brands is our annual report on the
defined the meaning of brand management, world’s most valuable brands and the insights
and continue to lead the debate on that can be drawn from how these global
understanding brands as valuable business organizations create and manage brand
assets. value.
We now have nearly 40 offices and are the We pioneered the technique for valuing
world’s largest brand consultancy. Our brands in 1984 and have continued to
practice brings together a diverse range improve upon the methodology and set the
of insightful right-and left-brain thinkers, pace for other approaches. Our valuation
making our business both rigorously techniques have long been recognized by
analytical and highly creative. Our work business, academics, and regulatory bodies
creates and manages brand value for clients as a uniquely valuable strategic tool. To date,
by making the brand central to the business’s we have conducted over 5,000 valuations for
strategic goals. clients to provide guidance in managing their
most valuable asset – their brand.
We’re not interested in simply being the
world’s biggest brand consultancy. We want
to be the most valued.
Contact us
General inquiries: Media inquiries:
Jez Frampton Lisa Marsala
Global Chief Executive Officer Global Communications Manager
Tel UK: +44 (0)20 7554 1000 Tel: +1 212 798 7646
Tel US: +1 212 798 7777 lisa.marsala@interbrand.com
jez.frampton@interbrand.com
Additional information on brands
www.interbrand.com
www.brandchannel.com
For reprint permission of this report or its
articles, please contact Lisa Marsala.
19 The Best Global Brands Interim Report 2009