Best brazilian brands 2011 A new path to corporate citizenship
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Brazilian brands: going behind the numbers
BY ALEJANDRO PINEDO
Managing Director of Interbrand Brasil
We are pleased to once again present Interbrand's ranking of the best Brazilian brands. Over the years, we have tried to make clear that what is learned with this analysis is more important than the values announced in this ranking. As in the previous rankings, most brands we have followed have increased their value, but we can state that this year the Brazilian ranking has achieved a different level. In 2010 the “qualification score” of our ranking was R$ 87 million, while this year Hering, occupying the twenty fifth position, is worth R$ 209 million. This certainly is a reflection of economic growth and the experience gained by the brands through the dedication and industry of their managers. With the consolidation of big mergers and acquisitions throughout the year, we have noticed that some categories have become stronger and that new players have joined the game, notably as the brands Pão de Açúcar, Extra and Casas Bahia. This activity ended up shifting the segments that still have a lot to do in terms of brand; and companies such as Gafisa and Lopes, for instance, are no longer among the top 25, although their brand value has increased.
Our 2011 ranking takes a knowledgable look at corporate citizenship, one of the essential elements to building the strength of a brand. The thinking here is to speak about the positions our clients take, about the practices that generate changes, and about the perception of what these changes are, and how they relate to both the B2C and the B2B markets. These rankings are supported by a thorough quantitative analysis, prepared along with Hall & Partners, which was presented at Harvard University in the end of 2010. With 5,527 consumers and 1,861 buyers interviewed in 6 countries [including Brazil], our study has observed that the behavior of consumers and purchasers is significantly impacted by the practice of corporate citizenship. The next study will be based on proving that the relation between corporate citizenship and purchasing decisions is actually very low [an average of 2%]. We still have to know how our managers will deal with this scenario when building the value of their brands.
As our brands become stronger, the discussion about when Brazilian brands will be among the hundred most valuable brands of the world still remains. But they still lack visibility, recognition and, most importantly, international presence.
Best brazilian brands 2011
Table of Contents
06 08 10
The Interbrand method for brand valuation
What makes a brand strong?
The 25 most valuable Brazilian brands of 2011
20
Analysis by Segment
22
A new path to corporate citizenship
24 37
Conclusion
How to apply theory to the practice of building brands
The Interbrand method for brand valuation
Interbrand has analysed over five thousand brands in the past 25 years in all business segments around the world and holds a clear position as leader and innovator in this subject. This wealth of practical knowledge provides the basis for our rankings, both globally and in specific markets, as global and local rankings observe criteria according to geographic or sectorial natures of the study. We have analyzed the brands under the financial performance criteria, measuring their ability to capture the preference of consumers and the probability to generate future revenues. Our method assesses brands as financial analysts assess any other asset: based on the forecasted revenues that assets are able to generate throughout time.
Our method assesses brands as financial analysts assess any other asset.
To be part of this ranking, the brand must observe the following criteria: 1. To originally be from Brazil This means that foreign brands operating in Brazil (e.g.: Santander) are excluded. Brands created in Brazil, even if currently controlled by foreign capital (e.g. Vivo), are eligible. 2. Publish financial information The company must be listed in the Stock Exchange or must have financial information available. 3. Identify the individual revenue of their brands The company must provide enough information to the market in
6.
order to allow determining the individual financial results of each of its brands. This means that companies with several brands, whose consolidated financial details cannot be listed by brand, are not eligible to the ranking (e.g.: BR Foods). 4. Generate positive EVA (economic value generated after the company remunerates all the capital invested) Companies with negative EVA due to operational reasons or because they have high cost for capital used are not eligible in the ranking.
5. To be well-known in its main markets About airlines As of this year we have excluded airline brands from the ranking in order to observe Interbrand’s global criteria. The reason is that the analysis of the capital employed by these companies might be imprecise due to the characteristics that specific operations of this segment, such as the leasing of aircrafts, impact their value.
Financial
Role of Brand
Brand Strength
Our assessment begins with the forecast
This is the measurement of how the
This is the measurement of the ability
of current and future revenues that can
brand influences\demand during the
a brand has to secure demand and
be assigned to the products or services
purchase process. Each measurement
generate profit over time. The strength
that use the brand. As a first step, we
is then applied to the earnings to
of a brand is measured in a scale from 0
subtract the operational costs and taxes
determine the profit generated only
to 100, with 100 being the high point,
of this revenue in order to calculate the
by the brand (brand profits).
based on the evaluation of 10 dimensions
revenue share that is directly associated
that are responsible for its activation.
with the brand. We then deduct the
The defined Role of brand for each
Capturing the preference of consumers
remuneration of the capital employed
industry segment is defined by
speaks to ensuring loyalty, repurchase
by the operation to identify the
Interbrand’s database, which counts on
and retention – therefore securing future
economical earnings of the business.
over 5 thousand valuations performed
profits. Our methods enabled us to find
throughout nearly three decades. We
a discount rate to adjust the forecasted
The whole financial analysis and forecasts
have defined individual brand criteria by
brand profits via their risks, based on the
are based on public information available
considering the benchmarks and their
demand this brand is able to guarantee.
and reports from well-known and
respective industries, which helps us
respected financial banks and analysts.
to determine the role a specific brand
In 2010, Interbrand updated the
plays within its category. For example,
Brand Strength analysis methodology
we know that the Role of brand is
to reflect important changes in
traditionally higher for luxury brands
the Market environment.
than it is for brands in the commodities industry. In this specific case, the
What has changed?
brand, and no other factor, is the main
Now there are 10 factors responsible
reason it is the choice of consumers.
for measuring Brand Strength: Authenticity, Clarity, Commitment, Protection, Responsiveness, Capacity, Consistency, Differentiation, Relevance, Presence, and Understanding. Why has it changed? The introduction of new factors to the Brand Strength reflects the need to update the brand valuation methodology hat had been previously used. Today, we also consider components associated with changes to the social and economic environments, such as corporate citizenship, product design, protection and social media, and other factors.
Operational Results Taxes Brand profits NOPAT
Economics earnings
(Capital employed X WACC)
Role of Brand
Brand Strength Discount rate
ECONOMICS EARNINGS
BRAND EARNINGS
BRAND VALUE
Brand Value The value of a brand is the financial representation of the business earnings resulting from the demand generated by its products and services. The parts of the calculation process finally complement each other when the profits forecasted by the financial performance are multiplied by the Role of Brand, resulting in the Brand Earnings. We have adjusted the Brand Earnings using their own risk rate (net present value). By doing so we get to the Brand Value, which becomes a key performance indicator for the strategy and is used as measurement to all brand activities and investments.
Note: The brand values of this ranking cannot be compared to the Best Global Brands, as the Brand Strength analysis is done by comparison to direct competitors of Brazilian brands.
$
What makes a brand strong? Much is said about building strong brands. This is what all big companies strive to achieve. But what are these brands and what do they do to obtain such strength? We can clearly state they are desired, recognized, recommended, sales leaders, responsible, long lasting, coherent. All that and more. With all the resources available in a world that is ruled by the digital domain, markets that are interconnected and aggressively offer products and services that are extremely similar, the task of building brands that stand out and conquer territory in the consumers’ choices becomes more complex – and more interesting. The work becomes even more challenging in a scenario ruled by “full accountability”, in which the word of the day is return on investment – in this case, ROBI (Return On Brand Investment). The demands made on brand managers are increasingly tougher and the time allowed to present results has diminished. To know exactly where and how to invest limited resources to provide strength to one or several brands becomes an obligation of all companies, regardless of their actuation segment. And knowing what exactly surrounds this perception of strength is extremely relevant when critically analyzing investments and, of course, the brand results. 8.
The strength of a brand is basically measured by its ability to generate return a future return. For that to happen, its performance must be above average and, preferably, above its competitors in ten dimensions. Individually, each of these dimensions is essential in the process that provides strength to a brand, even if the role played is small when analyzed in comparison to the whole process. Brands are valuable assets, and the responsibility of all the people and departments of an organization. Managing them is a permanent job, with challenges and achievements that must be periodically considered, assessed, adjusted or rebalanced. The Brand Strength is the result of the confluence of such efforts and of investments in all aspects. This will lead to a definite return.
There are 10 dimensions: Authenticity The brand is soundly based on an internal truth and capability. It has a defined heritage and a well grounded value set. It can deliver against the (high) expectations that customers have of it.
Clarity Clarity internally about what the brand stands for in terms of its values, positioning and proposition. Clarity too about target audiences, customer insights and drivers. Because so much hinges on this, it is vital that these are articulated internally and shared across the organization.
Commitment Internal commitment to brand, and a belief internally in the importance of brand. The extent to which the brand receives support in terms of time, influence, and investment.
Protection How secure the brand is across a number of dimensions: legal protection, proprietary ingredients or design, scale or geographical spread.
Differentiation The degree to which customers/consumers perceive the brand to have a differentiated positioning distinctive from the competition.
Relevance The fit with customer/consumer needs, desires, and decision criteria across all relevant demographics and geographies.
Presence The degree to which a brand feels omnipresent and is talked about positively by consumers, customers and opinion formers in both traditional and social media.ation.
Understanding The brand is not only recognized by customers, but there is also an in-depth knowledge and understanding of its distinctive qualities and characteristics. (Where relevant, this will extend to consumer understanding of the company that owns the brand).
Responsiveness The ability to respond to market changes, challenges and opportunities. The brand should have a sense of leadership internally and a desire and ability to constantly evolve and renew itself.
Consistency The degree to which a brand is experienced without fail across all touchpoints or formats.
Best brazilian brands 2011
The 25 most valuable Brazilian brands for 2011
Amounts in millions of R$
01 02 05
ItaĂş +18%
R$ 24,296 Segment: Financial Services
Bradesco +10%
R$ 13,633 Segment: Financial Services
Skol +10%
R$ 7,277 Segment:Food&drink
03 06
Petrobras +7%
R$ 11,608 Segment: Energy
Natura +22%
R$ 5,666 Segment: Cosmetics
Legenda Value increaseem in comparision to 2010 10.
Value decrease in comparison to 2010
Debut ranking 2011
04 07
Banco do Brasil +8%
R$ 11,309 Segment: Financial Services
Brahma +21%
R$ 4,351 Segment:Food&drink
08 11
Vale* R$ 2,656 Segment: Mining
Renner +7%
14 17
Cielo R$ 604 Segment: Services
Oi +9%
20 23
R$ 835 Segment: Retail
R$ 514 Segment: Telecommunication
Casas Bahia R$ 447 Segment: Retail
Net +10%
R$ 323 Segment: Telecommunication
09 12 15 18 21 24
Antarctica +15%
R$ 2,013 Segment:Food&drinks
Lojas Americanas +17%
R$ 703 Segment: Retail
Cyrela +8%
R$ 587 Segment: Real Estate
Banrisul -22%
R$ 501 Segment: Financial Services
Braskem -6%
R$ 422 Segment: Petrochemical
Ponto Frio R$ 232 Segment: Retail
10 13
Vivo +16%
Embratel -15%
16
R$ 619 Segment: Telecommunication
Caixa Econômica Federal R$ 563 Segment: Financial Services
19
Extra R$ 496 Segment: Retail
22 25
R$ 1,700 Segment: Telecommunication
Pão de Açúcar R$ 389 Segment: Retail
Hering +45%
R$ 209 Segment: Clothing
*not present in the 2010 ranking
Best brazilian brands 2011
01
02
Itaú +18%
R$ 24,296 Segment: Financial Services
Bradesco +10%
R$ 13,633 Segment: Financial Services
In 2010 the bank finally left the merger behind with the integration and remodeling of several branches was completed, creating a new architectonic model that introduces a trend in the segment; and it still had record profits. The gain in brand experience and revenue was significant, but set a series of challenges brought by scale. It was elected again by the Financial Times and the IFC as the most sustainable financial institution of Latin America and the emerging markets.
It is also at the top of the BACEN e PROCON complaint rankings and its efficiency rates are lower than those of its main competitors. Itaú is aware of that and ready to react, establishing complaint reduction targets, stating that the customer’s satisfaction is their main challenge. The slogan "The world changes. Itaú changes with you", highlights its restless posture and indicates the innovative look of a brand that prefers to continue challenging itself.
Like a hurricane, Bradesco had an 18% increase in the number of branches throughout Brazil. It has also delivered, in practical terms, the message of the "Presence" campaign to many other points of contact. The significant investment in the network is aligned with the strategy that supports banking inclusion and democratization of credit to all social classes.
The innovation was also due to the insurances area, which sells policies at newsagents and insures houses in slums. On the other hand, the non-aligned communications of the segment concerning the "Presence" campaign generates a loss of synergy in the construction of a consistent image under the institutional stem point.
Although it is surfing on the country’s consumer demand to maximize its credit portfolio, the bank maintains quality and has low delinquency rates. This position has helped the brand to become the preference of new bank customers. According to Datafolha, in 2010, Bradesco was the top brand in Internet cafes and among teenagers.
03
Petrobras +7%
R$ 11,608 Segment: Energy
Petrobras reached the end of 2010 recognized as the third largest energy company in the world based on its market value. Also, the "Brazil Moment" is creating momentum for the brand in international analysis. Its presence in the imagination and life history of most Brazilian’s serves as a source of national pride, and has become even more relevant for the brand. This imagery often acted as a shield for Petrobras against the risks it faced in the past.
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In 2010 the bank announced it will be the top sponsor of the 2016 Olympic Games in Rio. It will be interesting to see how the bank intends to realize this opportunity while it is aligned with "Presence".
Today, Petrobras invests in social, cultural, environmental and sports and is among the few Brazilian companies included in the Dow Jones sustainability. Export. The growth challenge for Petrobras is to maintain the strength of the brand in markets where they are unknown (and much less beloved). Petrobras will also be challenged by the international energy market, which could set a competitive pace that extends beyond the company's capabilities for responsiveness and innovation.
04
05
Banco do Brasil +8%
R$ 11,309 Segment: Financial Services
Skol +10%
06
R$ 7,277 Segment: Food&drink
Natura +22%
R$ 5,666 Segment: Cosmetics
Banco do Brasil went through the year of election and the integration of Nossa Caixa operations without turbulence. It was the leader in branches in the highly competitive state of São Paulo and it has extended its clients database, which includes a significant share coming from the state Government and Judiciary. It has broken records in the granting of credit and is number one in the consigned and rural credit agencies. If in capital and credit it has enhanced its business, Banco do Brasil has innovated by launching the "Saque Sem", which gives customers the ability to make banking transactions with their cell phone – without needing their bank card. The big surprise came when Banco do Brasil
announced it was resigning its sponsorship of the Água Brasil program, a confusing move by a brand that traditionally supports national sports and culture.In the wave of the internationalization of national companies, it took advantage of its good fortune to have Brazil as a last name and it moved into foreign markets. It has acquired a stake in the Bank of Patagônia and it has announced the expansion of its presence in countries in South America, Africa and Asia. Its international acceptance will be a good test to its brand strength, which is ingrained in the not always favorably perceived characteristics of the Brazil brand. Aware of the challenge, the bank has increased its marketing investments 70% this year.
The beer that is “desce redondo" or ‘fair and square’ in English, significantly increased brand value and focused its strategy on maintaining brand value. Ambev’s innovation department already represents over 15% of the company’s market share in Brazil, and Skol represents most of these innovations. In 2010 Skol executives decided to aim 15% of the marketing budget to Internet activity. This is the
biggest investment ever made by the brand in the digital environment. Furthermore, the launching of Skol Cincão, the first 5-liter beer barrel on the market, reinforces the alignment between brand and product. For 2011, the brand promises a beer that does not make you feel full. This distinction places Skol as the 4th most sold beer of the world, and the most sold in Brazil.
With a 23% growth in market share and an 18% growth in their total consultants database compared to the previous year, Natura remains as the leading brand in the Brazilian market of cosmetics, fragrances and personal care, as well as in the direct sales segment. In 2010 alone, 191 new products were launched, supported by a strong marketing investment [R$ 409 million], financed by its earnings profit. It is not a coincidence that Natura continues to be the benchmark when the subject is corporate citizenship.
One of the first companies to apply the concept in its business and brand practices, Natura continues achieving new and daring targets in the reduction of the environmental impact of its operations. In addition to its environmental awareness, it continues to run the project ‘Ver para Crer’ or ‘Seeing is Believing’, reaching up to 5,690 schools in 350 Brazilian cities, involving over 450 thousand people.
Best brazilian brands 2011
07
Brahma +21%
08 09
14.
R$ 4,351 Segment: Food&drink
Vale R$ 2,656 Segment: Mining
Antarctica +15%
R$ 2,013 Segment: Food&drink
Among the beer brands in the ranking, Brahma celebrates a 21% increase of its brand value. It is the second most sold beer brand in the country, with an 18% market share and massive marketing investments, guaranteeing its presence in most media channels. In 2010 Brahma launched a new project to capitalize on its image in the World Cup: an entertainment portal through which supporters can follow up on the latest World Cup news. Still
dedicated to soccer, it has recently signed off on a partnership with the Botafogo soccer team, investing in the club and leveraging its participation in this Brazil's national passion. Aligning its strategy to popular Brazilian events, aiming to secure the advertising of its brand to a significant number of people, it sponsors the Brahma Box in the Rio de Janeiro carnival and several actions in the Oktoberfest.
In 2010, as the result of the world crisis that directly impacted exports and commodities, Vale was not part of the most valuable Brazilian brands ranking. This year, Vale is back to the 6th position in the ranking, but still with a lower brand value than the 3.1 billion it had in 2009. Vale also believes in the strong association of its brand with pride and with the "Brazil moment" and since 2007, it has been consistently investing in the
strategy that has transformed it into one of the preferred companies of foreign investors. In the middle of an expansion process, exploring new regions such
Another strong member of the beer segment, Antarctica, the third most consumed brand in Brazil, grew 15% in brand value compared to 2010. It is a brand that searches for innovation and has launched the Antarctica Original, in the traditional 300-ml amber glass bottle, invigorating a classic product and maintaining the history of beer living in the memory of Brazilian consumers.
Another innovation was launching the Antarctica Sub Zero, a beer that is filtered twice at low temperature and introduces a concept of freshness to the brand’s DNA. It is the official brand of the Street Carnival of Rio de Janeiro state, where it is the market leader with over 30% market share. It is also strongly visible in the states of São Paulo and Minas Gerais.
as Chile, Peru and Mozambique, Vale returns to its position by right, showing that during a crisis, strong brands are responsible for insuring that companies have the capabilities to make a recovery.
10
Vivo +16%
11
12
R$ 1,700 Segment: Telecommunication
Renner +7%
R$ 835 Segment: Retail
Lojas Americanas +17%
R$ 703 Segment: Retail
For Vivo, 2010 was one more year of leadership. The top of mind brand according to Datafolha and the most reliable for mobile phone according to IBOPE, attracted 33% of the new customers in the post-paid segment. The clarity and consistency of the Vivo brand are important factors in the contribution to its strength, but its high point is the commitment demonstrated by its excellent services. The company has achieved 99.6% of the quality targets imposed by Anatel and had the least number of registered complaints: 0.2 for each 1000 clients. In 2010 Telefônica announced the acquisition of Portugal Telecom’s
participation in Vivo, becoming its main investor. Vivo was the brand chosen to replace the Telefônica brand commercially, making Brazil the only Latin American country that will not use the Movistar brand. Strong today, Vivo is preparing for a tough challenge by taking over the service of a company that has spent the past year apologizing to customers for its failures with broadband services and which also occupies the top position of all complaint rankings of the consumer protection agency. Being so genuine, will the brand be strong enough to support greatness in such a challenging environment?
Renner appeared in the ranking for the first time last year and it is still progressing by taking large steps, opening from 12 to 15 new stores every year, innovating in a smaller model consisting of stores outside shopping malls, which up to that point, represented 90% of their presence. It has strengthened its expansion in the North and North-East regions by supporting regional events and promoting fashion shows. Part of the strength of Renner comes from its clear, well-defined and well presented portfolio at points of sale. But its real skill is at the brand commitment level with clients. Once a year, executives from the headquarters in
the city of Porto Alegre spend one day performing essential functions and living the daily routine of the store, all equipped with an "enchantometer", where customers can manifest their level of satisfaction with the visit. The company annually publishes and distributes to employees a book with real enchantment stories told by the store salespeople. This year Renner showed another more aggressive side to the Market, more aggressive, which reveals its will to occupy other markets by acquiring the bedding, towels and table linen store Camicado.
Lojas Americanas are celebrating a 17% increase in its brand value compared to 2010. Physical presence and the increase of sales, reflected in financial performance, helped the brand to achieve greater importance and, therefore, value. In 2010 the chain of stores, present in all the regions of the country, opened 70 new stores, 21 in the Express format. Paying attention to the habits of consumers and because of their desire for practicality and convenience, Americanas has recently adjusted the focus of this approach, in order to offer closer contact to customers as well as a more relevant experience.
Today, the 541 stores are responsible for the consolidated net profit of R$ 309.6 million in 2010, compared to the R$ 176.1 million in 2009. It presents another piece of relevant information with the significant performance in e-commerce, which since 1999 has been built consistently, with consistently good results for the company. Through mergers and acquisitions, Americanas gained efficiency and logistics, being able to expedite its deliveries in several Brazilian regions.
Best brazilian brands 2011
13
Embratel -15%
14
15 16
16.
R$ 619 Segment: Telecommunication
Cielo R$ 604 Segment: Services
Cyrela +8%
R$ 587 Segment: Real Estate
Caixa Econômica Federal R$ 563 Segment: Financial Services
Technology pioneer and owner of the biggest telecommunications network in Brazil, Embratel is a 45-year old company and is one of the most well known brands in Brazil. Today, mainly in the land-line telephone segment, Embratel has been suffering with the aging of the segment. Although it has initiatives that indicate the company’s responsiveness (offering landline telephone and cable TV), innovation
is not moving fast enough to follow up on the consumers’ desire for agility, comfort and convergence. The consumer is looking for initiatives that are more appropriate for their life style in another type of service: mobile telephones. Established in a solid base of tradition and recognition, Embratel is still enjoying the results obtained from its glorious past, but it is already suffering from the new reality it faces.
Cielo is debuting in this year’s ranking as a new brand in the market, created in 2009, originating from the transition of the Visanet brand after the democratization of the use of card associations. Initially in a segment with little differentiation, Cielo increases the Role of Brand in purchasing decisions by associating its brand with innovative products like payment solutions via cell phone and loyalty programs. In 2010 it strongly invested in the consolidation of its brand in the market and in teaching its clients its new market role. This communication
focused on performance and agility, providing characteristics of the new brand personality combined with the expertise of its past. It is currently the leader in financial transactions volume, leader in the number of associated merchants, and it has the most capital and market penetration (1.8 million merchants), on top of being present in about 98.2% of Brazilian cities.
A symbol of of quality and reliability, Cyrela is considered one of the most solid and admired companies in its segment. Its legacy is the result of over 50 years of work in the construction segment, delivering products and services of the highest quality. Furthermore, it has benefited
from the bad reputation of many players in its segment to become even stronger. Now that the brand has already built its pillars, it is diving into the strength its brand has in the market and into the high growth of its segment.
Caixa Econômica Federal, a brand that will be 150 years old in 2011, makes its debut in the most valuable Brazilian brands ranking. It is the biggest public bank in Latin America, and its clients database currently counts over 51 million people between checking and saving account holders from all income ranges. The Caixa Econômica brand aligns with the history of the country because of the strong activity of the institution as a public policies agent. By offering house credit lines to companies associated with BNDES,
unemployment insurance, PIS, FGTS and the omnipresent casas lotéricas – today Caixa is an important outsourcer of services that were previously only offered by banks. Consistent in its drive to promote social inclusion and its positioning, the CEF brand supports several artistic, cultural, educational and sports projects and materializes its belief in people by making benefits and programs available to workers, besides being physically present in all Brazilian regions, with over 36 thousand units.
17
18 19
Oi +9%
R$ 514 Segment: Telecommunication
Banrisul -22%
R$ 501 Segment: Financial Services
Extra R$ 496 Segment: Retail
The most authentic telephone communication brand of the country and probably of the entire ranking raises the flag for freedom and makes speeches about providing options to customers, about showing what is behind the promotions and about offering plans that are easy to understand. Oi focuses on a single point of differentiation from its competitors: be simple when making an offer, but daring when communicating. But the brand still has to justify all its courage in the communication of the delivery, as it has suffered with coverage
failure in the beginning of its operations in São Paulo and in 2010 it was among the top three in Anatel’s land-line, mobile and long distance telephone communication complaints ranking. Can the brand’s popularity make up for the operational issues that impact its image? This does not seem to be a problem for the growth of the company, which in 2010 was consolidated into one of the main outsourcer of telecommunication services in Brazil, highlighting its leadership in fixed broadband, with 4.4 million users.
Considered one of the main economic developers in the state of Rio Grande do Sul, Banrisul is the third biggest company in Rio Grande do Sul and it is the best known in the region. Its work is significant in the South region, but it is not known much in the other Brazilian regions, and it invests very little in expansion. Very focused on personal development, it has been a public policies agent for
83 years and it is present in the daily routine of 98% of the state. Nevertheless, 2010 was a tough year for the Banrisul brand: the bank was investigated by the Federal Police because of institutional embezzlement, and the brand, extremely admired and recognized by the local population, had its image tarnished and its credibility questioned.
Present in the ranking for the first time, the brand Extra demonstrates synergy between its strategy and business objectives. Founded at the end of the 1990’s, the brand was created by the Pão de Açúcar Group to take over the leadership of superstores in Brazil. It was the first one to have 24-hour stores and its main value is the low price/cost strategy combined with a great variety of product offerings. Today Extra is present throughout the country, with over 400 stores, in the hypermarket,
supermarket, close stores (Extra Fácil), drugstores and gas stations formats, besides its website. Within the Pão de Açúcar Group, Extra is the business’ brand that has the most growth, with flexibility to fit grow and support the demands of consumers. The conversion of the CompreBem and Sendas flags has added strength to the Extra brand even more in the supermarket model, and given it the ability to adhere to the behavior of middle class consumers in most regions..
Best brazilian brands 2011
20
21 22
18.
Casas Bahia R$ 447 Segment: Retail
Braskem -6%
R$ 422 Segment: Petrochemical
Pão de Açúcar R$ 389 Segment: Retail
Debuting in the most valuable Brazilian brands ranking, Casas Bahia is among the 200 biggest retail companies in the world. It is the best known brand in the Brazilian market, with over 500 stores, an unmistakable flag, and 50 years of history. The brand has built its good image aligned with a solid business strategy, focusing on the lower classes with wide credit offers – concurrent with the growth of the purchasing power and of the buying needs of Brazilians. It was the pioneer in its business model
and became the benchmark in the segment, among other things because of its after sales support and logistics, which favorably and directly impacted the distribution and efficiency of the company’s virtual channel. Another point of interest is Casa Bahia's aggressive marketing, spending above the market average coupled with a massive presence in promotions and events, especially in festival dates. In 2010 the company joined the Pão de Açúcar Group, keeping its brand and positioning independent.
Having been in the market for only 9 years, Braskem is already the biggest petrochemical in Brazil, with a 50% market share in the domestic market and considered its standard bearer in the segment. It is one in its few companies of the segment that offers a value proposal in innovation, in trained people, and is very eco-friendly, which shows its concern with for future.
It currently has over 250 patents in Brazil, in the United States and in Europe, and it is represented in over 60 countries. Nevertheless, being in a sector of commodities, the brand struggles with strong competition and it is also affected by global political and economic instabilities.
One more example of the growth of retail in Brazil is the debut of Pão de Açúcar in the ranking. Traditionally in the supermarkets’ segment, Pão de Açúcar has established itself with a renewed and innovative posture, which has transitioned into the quality of its products as well as its buying experience. Founded in 1948, it worked on visibility and loyalty to strengthen its brand. The company culture – and, therefore, the brand – is supported by the image of the CEO, Abílio Diniz, who through investments in corporate citizenship and in direct benefits to consumers has contributed to the brands gain in value.
Pão de Açúcar talks about valuing the relationship with customers, supporting conscious consumption and a healthy life style. Its actions are totally aligned in the marketplace, from the brand's high quality services and products, to sponsorship actions, design of stores, loyalty programs, and advertising campaigns. The launching of new sales channels via iPhone and iPad, and the initiative to offer packaging options (eliminating the distribution of plastic bags) reinforces and renews the brands commitment to being a pioneer for sustainable practices.
23
Net 10%
24
R$ 323 Segment Telecommunication
Ponto Frio R$ 232 Segment: Retail
If the habits of Brazilian consumers changes, and if the purchasing power has actually increased, Net is a good example. Present in 14 states and in over 91 Brazilian cities, it is the segment company that offers the most products and services. It is the market leader in high definition content, with the highest number of subscribers using this service, and it has been celebrating its growth, also in brand value – from R$ 294 million in 2010 to R$ 323 million in 2011. Innovation and constant and consistent presence mark the
rise of the company and the brand – 2010 was the year of high-definition and of geographical expansion, which resulted in a 14% growth of its cable TV subscribers database. There is also the strategy that offers TV, broadband internet and voice (telephone) together, enabling digital access to all new homes, and the non-stop investment and efforts in communication – from traditional media to social networks –, that greatly contributes to the acquisition of new customers.
The Ponto Frio brand makes its debut in the ranking – one more retail brand whose growth and value reflects the red hot Brazilian economy and the easy access to credit. With an over 60 year history, Ponto Frio has reinvented itself – as well as its brand. It has grown to become one of the most traditional home appliances’ retailers in the country, always striving for a standard of high quality and focused on becoming the top of mind brand of consumers. How do they reach this target? Buy offering a variety of products, excellent presales and after sales, plus adding more and more services.
integration of operations with Casas Bahia. The strength of the Ponto Frio brand, based on its history, traditionally a strong presence all over Brazil – with over 450 stores – is leveraged by the opening of concept stores, and the renewal of existing spaces, strategies, and a focus on the shopping habits of consumers with quicker purchasing at smaller stores, which creates an easier and more rewarding experience for customers.
In 2010, its efforts were focused on the company's online sales platform and the
25
Hering 45%
R$ 209 Segment: Clothing
A revered, traditional brand, with 90% awareness and still growing, today Hering celebrates its gain in brand value, the result of a decade of investments, hard work, and successful repositioning. The brand has consolidated itself as a clothing solution with excellent value, accessible fashion, solid quality with many new features. Its inviting and casual positioning has remained consistent, sound and, above all, relevant to the consumer. The potential of the Hering brand has been explored based on the expansion of the Hering Store network, on distribution in the multibrand retail channel and also via
Results: for the 'same stores' concepts, gross sales have increased 31.8%. And it is important to note that e-commerce has increased 60%, compared to the fourth quarter of 2009 and the same period in 2010.
the online channel. In the Hering Store network, 2010 ended with 347 stores – 71 recently opened; 22 more than originally expected in the expansion plan. The company has always invested in corporate citizenship and today has 13 projects in its portfolio, from security to health, from kindergarten to college education. Its well known for its the campaign against breast cancer, which is heavily broadcasted, but the inconsistency of its marketing efforts, or the lack of a plan for future communications, might impact the stability that has been established by the Hering brand.
Best brazilian brands 2011
Analysis of segments The Pareto law in the distribution of values This year, the distribution of values between the top and the base of the ranking has become even more evident. The top five represent nearly 75% of the total value of the 25 most valuable Brazilian brands. This concentration indicates a maturity that is obtained by few brands. If put into context considering the size of our market, we are still a country with many valuable companies, but of few valuable brands. Few Brazilian brands have significant
values and consistency when compared to brands from other markets. Actually, none of the brands in the Brazilian ranking would be part of the Best Global Brands, although they present excellent results in their local operations. The challenge is to combine business excellence with international presence.
Vault Brands
Retail with full speed ahead
Once again the three biggest banks in the country are among the five most valuable brands in the ranking. This sector in Brazil is focused on a few players, which increases the significance of their results. Another point that makes the position of these brands even stronger at the top is the relevance of their actuation. Present throughout the value chain, the banks are the big drivers of our constantly growing economy. They are also among our bets in the exportation of brands.
The sector that has introduced big national entrepreneurs and that is recognized by its authenticity in its style of management is the hot spot of this year’s ranking. The consolidation of the retail segment has been through in the last two years and has moved the market with its events: the merger of Casas Bahia with the Pão de Açúcar group, which in the same period acquired Ponto Frio, the alliance of Ricardo Eletro and Insinuante, which created a strong block in Rio de Janeiro and in the North and North-East regions. Innovation in this market is also due to the investment in brand experience that has been done at points of purchase. Marisa reinforced the Distinction and Presence pillars with the two units that were opened on Av. Paulista, in São Paulo. Among all this integration there has also been the maturing of retail.com in Brazil. A bit delayed in relation to the market demand, the big players have decided to really invest in their virtual platforms, and the challenge that remains is how to transfer the knowhow of the regular purchase to the web, the brand experience oscillation is still very clear for online customers. But the brand does not depend on the environment. Still, there is huge reach, gain, and, combined with the increase in revenues, increase in the purchase power of the middle class and the bigger offer of credit in Brazil have resulted in a very positive combination to increase the brand value of the main players in this segment.
Expertise in volatile economic scenarios, above average performance during the world crisis and the moment of Brazil make a very favorable context for the players to strengthen their international participation, which makes the world think about a global bank from Brazil.
20.
Big exporters after the storm
The Real Estate Market is looking for a ssign in the category
The segments that were impacted the most by the global crisis were those in commodities, because they are so dependent on the international market. In 2010 we saw many brands, mainly from the mining and steel segments, disappear from the ranking, and although the world shows signs of recovery, demand is still unstable and the players that took longer to adapt their strategies are still suffering. The exception was Vale, which demonstrated great responsiveness and significantly increased its revenues between 2009 and 2010.
Last year some brands from the real estate market made their debut in the ranking, but the growth of their values was less significant than those of brands from other segments and most of them ended up staying out in a year when the qualification score was higher. Despite the boom in real estate credit and the positive results, brands still have low influence in the purchase power of the segment. Image and reputation are important rules when choosing a real estate company, but they are common to a list of big brands in the market and vary a lot from region to region. The challenge of big construction companies and developers is delivering quality. Some smaller players find in architecture, in sustainable construction and in the outsourcing of services the answers to create their own unique territory, but none of the big players defends any of these territories. There's blank page for the managers of these brands, who have in their hands a product that is so important to their customers and offers so many possibilities for customization.
Best brazilian brands 2011
22.
A new path to corporate citizenship
How to apply theory to build brands Interbrand has been living in the world of brands for over 30 years and is attentive to all the movements that influence them. Our brand evaluation jobs, quite well known because of the rankings we publish, help us map the factors that contribute to the brand strength and also how they evolve, become more important and even their configuration throughout time. One of the main pillars of brand strength comprehends corporate citizenship, a subject that is present in many meetings, workshops and courses in the corporate world. It is not new, but this has been calling our attention because of its fast evolution, motivated by expectation and by the demand of several stakeholders as well as by the factors that relate to the brands.
STAKEHOLDERS
Employees
Clients
Consumers
The millenials who are now arriving in the work market want to work for companies that have a clear goal.
Having their own corporate citizenship targets to meet, clients have been demanding more and more from their suppliers.
Consumers talk more to brands and are much more aware. What companies do is more important than what they say.
Credibility
Risk Mitigation
Environmental Risk
After an age where companies lost their consumer's trust, the effort to keep their reputation intact is essential.
Taking responsibility proactively is much more efficient than fixing problems after they occur.
The concern with environmental impact is in vogue. Corporate citizenship comes as a measure to help the business to reduce costs.
FATORES
24.
Corporate citizenship: a wider and more balanced approach intention here is to expand the discussion, and enrich the debate so the concept is incorporated into our everyday routine.
Entering the corporate world is already difficult because of the language. Many names the same thing and there are few direct explanations that properly differentiate such meanings. This was one of the motivations we had in choosing the term corporate citizenship rather than other similar terms such as corporate social responsibility and sustainability. The concept is not new and does not intend to destroy the territory that has already been built by corporate social responsibility and sustainability. The
After all, companies are made of people, and, like us, they may or may not be considered good citizens. Depends on how positive their coexistence with society is and on how they treat the main elements of their businesses: employees and suppliers, the communities where they operate, the governments that influence their work, and the planet that enables their existence.
Besides being more understanding of the social aspects of corporate social responsibility, and not being swayed by the mindset that has taken over sustainability, we believe it is easier to understand what we mean when we speak of corporate citizenship. This clarity helps us talk about the position of the companies, about the practices that create the perception of who they are. And that perception is their brand. That is where we make our contribution.
Companies are made of people and, like us, they may or may not be considered good citizens, depending on how positive their coexistence with the society is.
Going deeper into the investigation To start talking about corporate citizenship and explaining the change we noticed in our clients and in our brands, we needed fresh news, new content.
subject, and if this importance becomes a decision driver, whether it actually affects the way consumers shop.
Given our studies about this subject, it seemed appropriate to simply ask consumers if they considered corporate citizenship important. Interbrand wanted to achieve something greater. We wanted to understand what is behind the of each
5227 consumers between the ages of 18 and 65 who play an active role in
1861 buyers from small and medium companies and big corporations who play an active role in their purchasing decisions
the purchasing decisions of their homes CATEGORIES
CATEGORIES
computers
computer hardware
automotive
heavy machinery
retail beverages
B2B
B2C
To do so we have conducted a comprehensive quantitative survey to define the relevance of corporate citizenship in the choice of products/services and in the relationship with brands in both the B2C and the B2B markets.
financial services wireless
fast-food restaurants services stations chocolate
The new age of corporate citizenship
Studying the figures The greatest contribution of this study is that it was one of the first to isolate the corporate citizenship as a variable to really understand its role. Also, we didn’t want to obtain a local perspective, but rather a global view. In 2010 Interbrand established a partnership with the Hall&Partners Research Institute to listen to consumers, buyers, and clients. Brazil was one of the 6 offices that participated in the process along with China, Germany, Japan, England, and the United States, selected to ensure the diversity of cultures and economic relevance to the study. We decided to include buyers not only because of the very little information available on the influence of corporate citizenship in this market, but also because of the increasing number of B2B clients who come to us for branding projects. After the Walmart effect, which “greened” the supply chain of companies
and made buyers begin to worry about the type of suppliers they hired, we wanted to understand whether there was a relationship between corporate citizenship and the purchase behavior of companies.
DRIVERS of CORPORATE CITIZENSHIP
26.
The study has led us to many other hypotheses about the application of the study in Brazil, where much is said about corporate citizenship. These are ideas that have existed in the corporate universe for years, disseminating a sense of urgency in many meetings,
We enriched the study by interviewing clients leaders and companies in the surveyed categories. In Brazil , we talked to the people in charge of corporate citizenship, sustainability, and marketing of companies such as Petrobrás, Itaú, Embraer, Banco Real/Santander, Vivo, and Bunge. The first results were published in our paper "The New Age of Corporate Citizenship" and presented for debate at the event in partnership with Harvard University in December. It incorporated the participation of clients, experts and professors. Most importantly we actually observed that the behavior of consumers and buyers are significantly
Decision drivers (example in a service station)
impacted by corporate citizenship. That is, it proved that corporate citizenship affects the brand value. We determined this is an excellent starting point.
workshops and courses with specialized consultants, but it is rarely acted upon.
Regression coefficient
Convenient location
0,470
It has convenience stores I like
0,324
Offers technically advanced products
0,287
Offers competitive prices
0,249
Offers quality services
0,303
Facilities are clean and well kept
0,304
Develops alternative energy sources
0,213
I hear and see many things about the brand
0,187
Treats its employees, partners, and suppliers fairly
0,203
Supports the communities where it operates
0,192
Supports NGOs
0,176
Has partnerships with the government to positively impact the society
0,214
Offers products that are environmentally responsible
0,203
Makes an effort to minimize its environmental impact
0,201
Influences its supply chain to positively impact on the society
0,240
Behavior
Brand choice OR
Favorable impression of the brand OR
Brand Advocacy OR
Brand Commitment
Exploring the branding universe We realized that in the same way we defend that the brand strategy must be directly connected to the business strategy (and in some cases guide it), we now have to do the same with corporate citizenship. Either corporate citizenship actually surrounds all the business and brand levels, or it is set to be forgotten in annual reports, only present at the speech level.
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In our work, determining the strategy of a brand involves investigating its business and expression, identifying what is good and bad about it, penetrating its subtleties, and building distinction and relevance. We have to let it simmer, manage sensibilities, potential, and aspirations to reach what is legitimate, and real. In this process, we many times receive the “request” to include corporate citizenship in the values and promises of a brand. “This promise has to be part of our brand platform.” Unfortunately, many times this is what corporate citizenship ends up being in the everyday routine: a concept without much application to the values or to the business practices of the companies.
p
ENGAJAMENTO
tale n t o s
Inspired by this idea and using our daily practice as the base, we have gathered 12 insights to help Brazilian companies build corporate citizenship in their everyday routine, to drive the choice of consumers, and when they come full circle, to increase the value of their brands.
The new age of corporate citizenship
01. Simple, not simpleton. Corporate citizenship does not need to have a tone of voice that is difficult, boring or different from that of the brand. Many of our recommendations to clients include strategies for them to communicate more clearly and efficiently, avoiding jargons and speeches that are too technical and rhetorical. Many times corporate citizenship seems to be confined to a theoretical environment, practically academic, and difficult to penetrate. This goes from its definitions to explanations of initiatives, programs, and platforms. Who said that corporate citizenship has to be boring and difficult? Our Third Sector is populated by missions and definitions that not only empty their respective meanings and decrease their power of action, but also make anyone who does not have a Ph.D. in the subject run away.
Many times, corporate citizenship seems to be confined to a theoretical environment, practically academic, and difficult to penetrate.
28.
Some examples obtained from Brazilian NGOs websites: Definition of social responsibility: "Corporate social responsibility is the management method defined by the ethical and transparent relationship of the company with all the audiences with which it relates by defining corporate targets that leverage the sustainable development of the society, protecting environmental and cultural resources to the future generations, and observing the diversity and promoting the reduction in social inequality.” Mission of an institute: "Create a human community where male and female values are balanced, which sees itself as part of the Planet’s web of life and, as such, takes care of life for life itself and accepts mankind in all its diversity.” It’s entirely possible to use the brand’s speech style that is already established and recognized by the clients. A complicated and dense speech makes people uninterested and reinforces the “ecoboring” perception. Instead of showing a leaking tap and saying how many children in a distant continent could be saved from thirst with the water wasted here, it is possible to be direct and funny as in the "Pee in the Shower" campaign.
02. If I am this nice, why is it that no one buys my product? Choose the best moment and the appropriate target audience for your message. Before the study, we thought that in Brazil corporate citizenship was not yet a demand driver as it is in other more developed countries. In those markets the relationship of corporate citizenship with purchase definition would be more straightforward because consumers are familiar with it. We proved that here in our country the relationship of corporate citizenship to purchase decision is actually very low – but this is the result for all the countries that have been analyzed, around 2% in B2B and B2C. The figures in some B2B categories are slightly higher, which we believe is the result of regulations and also because the companies are more attentive to their supply chain.
citizenship already appears as a driver and an influence factor is a good start. And it is interesting to note where it causes the greatest impact: it is when people are forming their impression of the brand, and not really at the time of purchase. Understanding where corporate citizenship impacts the relationship stage of the client/ consumer with the brand makes it easier to delineate where the best opportunities for action are. As it has been identified that corporate citizenship has greater effect on the stage where a preference for a brand is created, it is more effective to concentrate investments in actions that impact on how clients and consumers engage with them rather than the purchase decision process itself.
We know these figures will not convert anybody, but the fact that corporate
B2C
B2B 13%
17%
Preference 9%
12%
Advocacy 6%
8%
Commitment 2%
3%
Choice
Source: Corporate citizenship study 2010
Corporate citizenship
Other factors
The new age of corporate citizenship
03. The halo effect. Focus, focus, focus. The study proved that people tend to credit companies which have successful corporate citizenship initiatives concentrated in a single area. This happens because the audience has a good general perception of companies that have a defined focus, instead of reading isolated efforts. The “halo effect” allows a company that does very well at owning a specific territory [supply chains, relationship with employees, partnerships with the government] to be noticed as a good citizen, to the contrary of those that choose to have initiatives in all areas.
There is a reason if, to date, in surveys with audiences in general, the two brands that always appear as the most sustainable in Brazil still are Banco Real [in memoriam] and Natura. The main implication for the brand strategy is that this concentrated effort can provide greater investment return. Find your niche and get hold of it. This is better than falling into the temptation of doing a little of everything and making it difficult for your audience to understand what you want.
The audience has a good general perception of companies that have a defined focus, instead of interpreting efforts as isolated actions.
04. The project has been approved, now we need to define the cause. Corporate citizenship has to speak to the brand management, which has to speak to the business strategy. Here in Brazil, the relevance of the causes chosen is not always in tune with the company’s core-business or values. Corporate citizenship still doesn’t speak to brand management; and associations that are not logical to the stakeholders make it difficult to add value. It has taken some time for brand consulting to convince the company managers that the management of their brands should
30.
Some statements we heard from our clients and partners:
be intimately connected to the business management. Today, in some cases, the branding even manages to guide the business.
“We decided it was important to invest in social responsibility and we have managed to approve the budget, now we have to choose which cause to support.”
In the same manner, it makes total sense for the corporate citizenship of the company to be also guided by the brand strategy.
x “We plan all our business based on what we believe, on the impact we want to have on the world, then we develop all the rest.”
05. A good education starts at home. Therefore, choose a cause that is close to your business or to your supply chain. In the same way we talk about legitimacy, we have to understand whether the causes chosen actually impact the environment or the business of the company. Companies want to reach the whole world and defend global causes that are in vogue, without really understanding whether they are relevant or whether they impact their corporate habitat. A company from the financial segment for instance, can benefit more by supporting microloans in developing countries than investing in AIDS research. The stories become much more coherent and clear. The brand has to pursue connection and legitimacy. When it is time to develop the corporate citizenship platform and its initiatives, it has to act where there is an actual possibility of obtaining results. If in doubt, start by giving back locally.
Some statements we heard from our clients and partners: “We realized that subjects associated with global warming get more attention of clients, so we try to act in this direction.”
x “We do not have actions in all areas because we understand that the contribution would be minimum. We try to identify both internal and external demands to understand where we could make the most possible difference, and we invest there.”
The new age of corporate citizenship
06. I don’t want your brand! The brand has to be legitimately interested, otherwise partners will be the first ones to reject the association. At this time when so many companies seek a good reputation by getting involved with NGOs and institutions, the latter can afford to refuse sponsorships and consider who their partners will be. The same is applicable to the talents the company wants to attract and keep. As stated by the Global CMO of Diageo, Andy Fennel, the millenials who are now arriving to the market are more interested in knowing what the main objective of the brand is rather than their initial salary. The choice of partners must also be guided by brand positioning, and not to cover reputation and programs’ gaps. When it is only about a commercial agreement, the audience recognizes it as advertisement and the transfer of equities is low. A real relationship is good for both sides and brings positive points to both.
Some statements we heard from our clients and partners: “There is tension. The sponsored party needs the resource and tends to waive many conditions at the same time it doesn’t want this same resource to interfere in the production, in the operation. The sponsor is a little arrogant because it makes the project feasible and wants to interfere, to influence it.' “To demonstrate genuine interest sponsorships must be consistent, continuous and coherent. The sponsored parties are learning to select based on these criteria in order not to become dependent, losing their voice and rights.” “We decided to end our relationship with one of our biggest sponsors because we did not agree with their practices, which would be bad for our reputation.”
32.
07. Managing the gap. Strike a balance between what is done and what is communicated. Today, what is done is known by everybody. Therefore, what is said, besides being less important, can also make a company be judged and rejected if the distance between what is said and what is done is too long. In the first big corporate citizenship wave, brands filled the prime time communicating their efforts and initiatives in the area, many times without much background. The big effect of the green washing was the green fatigue. All terms associated with the good nature of companies, such as corporate social responsibility, sustainability and green products were vulgarized. After so much criticism, monitoring and
demands, we have reached a moment where many companies do a lot, but are afraid of communicating. The brands still haven’t found the tone or the legitimate link to convey corporate citizenship. Although brand logic states what we have to do first and communicate later, being closed in total silence does not help. What is seen today is that even companies that do it well or have things to say avoid communicating, as they are afraid of creating a negative image. The notion of balance is still far away.
Some statements we heard from our clients and partners:
After so much criticism, monitoring and demands, we have reached a moment where many companies do a lot but are afraid of communicating. The brands still haven’t found the tone or the legitimate link to communicate corporate citizenship.
“We are careful for the advertisement not to be bigger than the project. We pay twice as much attention when the subject is corporate citizenship.” “The problem is to spend ten times the amount invested in the program in publicity. These distortions demonstrate lack of consistency.”
The new age of corporate citizenship
08. The face of the brand left the company, and supporters changed brands. Engagement is essential. Here in Brazil this still is a very personal subject, defended by the individual citizen and rarely by the brand, or the company as a whole. When these spokespeople and engaged people change companies, citizenship might take a ride and change brands too.
After several projects we realized that, at the same time people provide a human dimension to the companies’ missions and work as catalyzers, many times this "engine" which is the mission is not spread and becomes vulnerable and dependent on the physical presence of its creator. In these cases, the corporate citizenship becomes an island, isolated, and no longer engages or motivates anybody.
09. We will do well, but who will pay the bill?
This statement we heard during the study perfectly depicts this situation: “It is something we speak a lot about, and when I say we I mean the president.” With a good engagement process the brand can make its stakeholders also owners of these ideas, bringing them to life.
The total for these 14 companies is over US$ 11 billion Billion US$ 0.0
0.5
1.0
1.5 Coca-Cola IBM Microsoft
Do not transfer the responsibility to your consumer’s pocketbook. In the beginning, corporate citizenship was merely seen as a necessary cost and an activity that was separate from the brand’s identity. Or even, in a defensive position, “a launchpad” for the company to be one step ahead of government regulations. These positions are now quite dated. If before it was seen as a cost, today corporate citizenship can be used in the construction of the brand and in the generation of value. Billions of dollars in brand value are currently tied to corporate citizenship – Coca-Cola, IBM and Microsoft together total nearly US$ 4 billion invested. When corporate citizenship is done in a ‘cosmetic’ way, it creates specific products and services, separately from traditional ones, and generates a cost that is transferred to the consumer. When the corporate citizenship strategy is directly associated to the business and the brand, it adds up and it is noticed by the stakeholders as something that generates value, not cost.
HP GE Nokia Toyota Intel Google Mercedes Gillette Cisco BMW Samsung Source: Best Global Brands 2009 and Corporate citizenship Study 2010
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10.You are not doing more than your obligation. Do not turn your homework into altruism. Companies are willingly adopting holistic strategies that benefit both the world that surrounds them and their brands. There are those who sell their efforts towards compliance, towards observing laws and regulations as citizenship. In this hazy scenario, the study identified that the audience is more sensitive to actions that demonstrate the true
altruism of the company than those directly associated with risk mitigation and reduction of impact on their activities To summarize, becoming a citizen brand and being noticed as such demands much more than simply recycling your garbage and reducing your carbon footprint.
The importance given by consumers to corporate citizenship actions
Becoming a citizen brand and being noticed as such demands much more than simply recycling your garbage and reducing your carbon footprint.
Partnerships with the government to positively impact the society
45
Support to NGOs
45
Influence in the supply chain to positively impact the society
29
Support to the communities where it operates
26
Awareness of the importance to minimize its impact on the environment
20
Awareness of the need to manufacture products that are environmentally friendly
18
Fair treatment to employees, partners and suppliers
18 Total %
The new age of corporate citizenship
11. The harder it is to decide, the more it counts. The more rational a purchase is, the more important this factor is. This is an insight which seemed very obvious to us when we saw the charts, but we had never seen it anywhere else. It makes sense that in the categories where the decision process takes longer and is more rational, the impact of corporate citizenship is bigger. This discovery indicates that when people carefully think about a brand, they consider the corporate citizenship factor. Nevertheless, when they buy spontaneously they pay less attention to the behavior of brands.This does not mean that chocolate and drinks’ brands no longer have to worry about being good citizens. There is much more behind the
logic that makes consumers establish the universe of product, they consider. They might not be very interested in whether the milk chocolate is sustainable, but they can determine if the big brand (the company that manufactures their favorite sweets) is reliable and is not destroying our forests. The fact is that this connection more actively happens when the consumers are obligated to think about their purchase instead of simply acting by impulse. If your product is expensive, complex, and will last long, your company should do more than just think about corporate citizenship.
When people carefully think about a brand, they consider the corporate citizenship factor. Nevertheless, when they buy spontaneously, they pay less attention to the behavior of brands. Corporate citizenship contribution Percentage % 0
2
4
6
8
10 12 14 16 18 Cars Chocolate
Commitment
Advocacy
Source: Corporate citizenship study 2010
36.
Favorable impression
12. In the land of the blind the one eyed man is king. Corporate citizenship alone still is a distinguishing point here in Brazil, but soon it will be an obligation. By sorting data out by country we were able to identify a historical reference about the subject. Apparently, in countries with a greater corporate citizenship legacy, such as Japan, Germany and the UK – where social and environmental concerns have been part of company equations for a long time – the distinguishing role of corporate citizenship has decreased throughout time and it begins to be seen more like table stakes, a pre-requisite. At the same time, in countries where the corporate citizenship awareness is more recent and a subject with greater potential is to be treated like news – such as in China, Brazil and the USA – its impact on general opinion is greater.
Corporate citizenship contribution by country Percentage % 0
2
4
6
8
10 12 14 16 Brazil EUA China Germany UK Japan
Commitment
Advocacy
Favorable Impression
Source: Corporate citizenship Study 2010
Therefore, act quickly and get ahead, because here in our country, corporate citizenship still is a business opportunity, there is room to create a differential. When we achieve the sophistication of the Japanese, corporate citizenship will become an obligation, and those who are not up to seed will be left out.
Act quickly and get ahead, because in our country corporate citizenship still is a business opportunity, there is room to create a differential.
Conclusion This study, which was created to be the conclusion of many hypothesis and ideas, ended up becoming the beginning of a long conversation. We still have many subjects to be explored and more questions to answer. And, maybe, we have begun following the path in order to track the evolution of this subject and to watch a significant change from the best spot. We believe that these figures – which are so reserved in the charts, but already indicate their presence – allow us to think about our business differently, incrementing our tools, expanding our
measurement capabilities, focusing on the journeys of the stakeholders, instead of on punctual pictures. The moment is still vague as to what concerns corporate ideas associated with social engagement. There are still many companies that reinforce all the negative theories about the subject. We hope there will be increased competition in the world of corporate citizenship, which enables innovative brands to actually make a positive impact in their markets, the lives of their consumers, and their stakeholders.
The new age of corporate citizenship
Interbrand started in 1974 when the world still thought of brands as just another word for logo. There are currently 40 offices worldwide and a highly qualified team of professionals, who make our business rigorously detailed and creative. We create and manage brand value, putting it in the center of the strategic goals of the business. We combine pioneering and practice in the branding discipline with creativity and ability to innovate, in all the life cycles of a brand.
Areas Brand Strategy The brand strategy work requires intense partnership. Our team works with clients to identify market opportunities and help them to position their brands, thinking of short and long term strategies. To do so, we carry out data analysis that involves quantitative aspects as well as the identification and mapping of functional, inspirational and aspirational benefits of a brand. The brand strategy involves several subjects and expertise, from brands’ architecture and positioning to the engagement of collaborators.
Brand Identity A well-defined brand identity is a powerful communication tool, which goes beyond the identification of a business or organization. It is an endorsement of quality, value and trust. It promotes understanding and distinguishes companies from products for the consumers. We understand brand identity as the reflection of its strategy in aspects that are visible in the everyday routine, such as the name, the tone of voice used in communication, logo, stationery, packaging and the other points of contact where the brand is present.
Brand Valuation The valuation aims to understand the financial value of a brand and how to increase the role it plays to generate measurable impacts. It is through our valuation work that companies can have a more specific dimension of how much brands can positively impact their results, generating value for the business. Interbrand is the pioneer in this subject, which it has been developing since 1988. We annually prepare the Best Global Brands ranking, published by Business Week as well as specific rankings by country.
Credits Who is Interbrand in Brazil today: Alejandro Pinedo, Ana Puttini, André Matias, Beto Almeida, Cristiane Inoue, Daniella Bianchi, Danielly Tavares, Denise Abramovici, Eliane Rodrigues, Evandro Quintella, Fabiana Duarte, Fabio Palmer, Felipe Brandão, Felipe Valério, Fernanda Gonzalez, Fernanda Marinuzzi, Fernando Andreazi, Francisco Martins, Gabriela Mundim, Gil Bottari, Ilana Herzberg, Jenifer Almeida, João Marcopito, Juliana Del Chiaro, Juliana Lima, Laura Miloski, Leandro Strobel, Leopoldo Leal, Leticia Pettena, Lucas Machado, Luiz Rossin, Marcelo Ferrarini, Maria Claudia, Mariana Neves, Maristela Raucci, Neide Fidelis, Pedro Mattos, Priscila Navarini, Rafael Cipolla, Rodrigo Souza, Shingo Sato, Sintia Leal, Susana Liu, Tiago Rodrigues and Victoria Murat.
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Contact us Interbrand Brazil Phone +55 11 3707 8500 interbrand.sp@interbrand.com For further information on brands www.interbrand.com www.brandchannel.com
Best brazilian brands 2011
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www.interbrand.com www.interbrand.com
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