Interbrand announces the 2008 Best Global Brands

Best Global Brands 2008click to enlarge

Coca-Cola (No. 1) remains the best global brand for the eighth year in a row. Yet, a notable shift in this year's rankings was made by IBM, which took over the No. 2 position from Microsoft (No. 3). Google also moved into the top 10 brands, at No. 10, after ranking at No. 20 in 2007.

“The Best Global Brands 2008 ranking is a reflection of the global economy - the current credit crisis in the US, the growth of emerging markets and the increased emphasis on sustainability are all key trends that resulted in brands rising or failing on the list,” said Jez Frampton, Global CEO of Interbrand. “The increasing complexities of the global economy reinforce the importance of protecting and growing a brand. It is a company's most valuable asset - and a far less volatile asset than others during a time of economic uncertainty.”

Movement in the Best Global Brands 2008 ranking confirms that the tumultuous credit markets are affecting leading financial services brands, including Merrill Lynch (No. 34) and Citi (No. 19). However, some strong industry leaders have survived such as HSBC (No. 27) and credit card companies Visa (a new entrant to the list at No. 100) and American Express (No. 15), which have all been able to transcend the credit crisis due to their trusted brands.

Other brands that fell significantly on the 2008 list include Ford (No. 49) and Gap (No. 77). While notable newcomers include H&M (No. 22), Thomson Reuters (No. 44), BlackBerry (No. 77), Giorgio Armani (No. 94), Marriott (No. 96), FedEx (No. 99) and Visa (No. 100).

Emerging market growth has had a significant impact on this year's ranking. As customers in these markets accumulate wealth and seek to demonstrate it, luxury brands are seen as a clear indication that one belongs to the new elite. Companies like Porsche (No. 75), Ferrari (No. 93) and Prada (No. 91), have experienced great success in the world's emerging markets.

Not surprisingly, sustainability is driving brand value across all sectors - from automotive, to consumer products, to financial services. Auto-makers like Honda (No. 20) and Mercedes (No. 11) are creating new, more fuel efficient car models. Honda was the only car manufacturer to report better U.S. sales this year, in June 2008, than it did last year. Companies like GE (No. 4) and BP (No. 84) increased their brand valuation by investing a substantial amount in sustainable business practices. BP also rose among the ranks as a result of its leadership position in working towards greener energy investing in sustainable energy sources.

“In troubled economies business doesn't cease. Companies may struggle, but the practice of buying and selling continues no matter what,” says Frampton. “Many of the Best Global Brands know this and come through these difficult times stronger and better poised to compete. The key to success, in good times and bad is understanding how your brand creates value.”

Comments Jeremy Sampson, Chairman of Interbrand Sampson in Johannesburg: “The continent of Africa and to a lesser extent South Africa, are currently largely underbranded and immature markets for many major global brands. But as personal wealth increases and the area becomes more stable it will become a war zone for the major brand owners. Many major groups are structured with an AME's (Africa Middle East) section, and we are already seeing a marked increase in activity and investment.”

Interbrand's The Best Global Brands 2008 report will be available, online at www.interbrand.com and a special report in conjunction with BusinessWeek can be found at www.businessweek.com at 6:00pm (EDT) on Thursday, September 18 and on newsstands on Monday, September 22nd. The results will also be discussed at Advertising Week 2008 during the BusinessWeek Best Global Brands Summit on Monday, September 22nd at the Times Center (242 W. 41st Street) in New York City.


BEST GLOBAL BRANDS 2008
TOPLINE FINDINGS

IBM IN THE #2 SPOT
Big Blue moves in as Bill Gates moves out. Microsoft has lost its visionary leader and the #2 spot on the Best Global Brands table. IBM, with an increase of 3% climbs up the ranking as it shows the world it's delivering against its strategy to be the premier, integrated solutions provider.

NEW ADDITIONS TO TOP 100
BlackBerry addicts prevail. For the first time, BlackBerry makes its way onto the global brand stage. Ranked #73, and valued at US$4.8bn, it still remains to be seen if it can outperform Apple's iPhone.

Ferrari zooms onto the league table. Fueled by the growth of the luxury brand segment, this Italian automaker is moving successfully towards attainability. 30% of its sales are even coming from the US, despite its struggling economy, proving that even in a downturn luxury brands can thrive.
*new wealth market and consumer behavior in a downturn

Visa cashes in despite the US credit crunch. Ironically, considering its position as the world's number one credit card, Visa has barely been affected since it carries no actual consumer debt. Its global nature made it the perfect sponsor for the 2008 Beijing Olympic Games, beaming its name into the homes of millions who may be taking their first steps with credit.
*new wealth markets and consumer behavior in a downturn

H&M sets the trend for retail brands. Posting strong sales in difficult conditions, the trend-conscious, cost-effective retailer is aggressively expanding into new markets and is using celebrity designers to grow the fan base.
*good example of understanding consumer demands

All things are hospitable for Marriott this year. Its classic approach focuses on the availability and assurance of service - qualities harried travelers are insisting upon.
*good example of understanding consumer demands

Thomson Reuters is one to watch. Its highly-publicized merger created the strongest player in the industry, and a big presence in high growth markets is going to take it far. As the brand reaches its full potential and restructures to become more efficient as a whole, TR is one to watch.


RISERS
Google (43%) - it is no longer an internet brand, it is the internet. It is the number one search engine and its projects like Google Earth, Google Mobile and the acquisition of YouTube are making the brand more and more powerful.

Apple (24%) - it seems nothing can slow the ascent of Apple as it continues to identify new or unmet customer needs and deliver beautiful products. Did you ever think you'd need an iPhone and an iPod???

Amazon (19%) - ironically moving away from books has helped this brand become the supermall of the internet. Recent innovations (like the Kindle and Checkout) are extending goodwill and bringing about repeat customers.

Zara (15%) - Zara is a global force in bringing ‘of the moment' fashion to more and more people through its continued expansion in new territories. It is applauded for the efficiency of its supply chain, and its customer-driven fast fashion bucks the downturn trend by giving its shoppers exactly what they want.

Nintendo (13%) - Nintendo has done with the gaming industry has been trying to do for years - widen the market. The Wii and DS consoles have brought new consumers to the market and now all ages and genders are fans.


FALLERS
Ford (-12%) - Again this year Ford continues to struggle. They are victims of momentum, having invested heavily in big trucks and now that market is rapidly shrinking. It's taking Ford a long time to shift its image and the company's financial performance doesn't help restore consumer confidence for the brand.

Citi (-14%) - the credit crunch hit Citi hard and has left a big dent in its brand value. Negative news continues as it is forced to announce eye-watering losses and job cuts.

Morgan Stanley (-16%) - like the rest of the industry, its decline is largely due to the credit crisis, but MS was also hit by a class action lawsuit with its shareholders outraged by its delay in disclosing its level of exposure. With shareholders in doubt, MS will have to focus on rebuilding its heritage.

Gap (-20%) - the slump continues for Gap as its consumers are being lured away by more appealing, low-cost fashions. In fashion retailing, the middle ground has always been a battlefield and Gap is on the losing side.

Merrill Lynch (-21%) - Without a retail side to support the business, Merrill Lynch was the worst hit of financial services brands. Ironically the brand that has not been seen as a risk-taker is seeing its packaging of sub-prime mortgages backfire.


THEMES OR TRENDS FROM 2008 LEAGUE TABLE
Strong brands grow in weak economies. Look at the top 20 brands on this year's league table, all but one (Citi is affected by the credit crunch) has grown in value. As you go down the league table, where brands are presumably less strong, you see a greater portion having negative growth. Best Global Brands prove to us time and time again that brand is a less volatile asset than other business assets.

NEW WEALTH AND EMERGING MARKETS
Luxury brands continue to do well in new wealth markets, and more surprisingly at home. Louis Vuitton is up 6% and has aggressive expansion plans abroad. Tiffany & Co., up 5%, continues to focus on the customer shopping experience and is proving that regardless of the economic conditions. Cartier is boosting revenues from China where strong demand helps the brand grow 10%. With the Chinese market expected to account for 10% of global sales by 2010, Prada has invested heavily in marketing and advertising and has seen a 9% growth this year.

HEALTHIER LIVING
Health concerns continue to plague the food, beverage and restaurant sectors, some brands more than others. Never one to sit still, McDonald's was early to react and with trans-fat free fries and healthy menu options it climbs 6%. Pizza Hut, however is falling flat with sales in core markets and is looking abroad to recover from a -4% decline in brand value.

SUSTAINABILITY
The value of green continues shade brand performance. Being seen as green is important in multiple sectors but at what price? Beyond being a popular media buzz word, companies are starting to evaluate the “triple bottom line” of their sustainability initiatives -the environmental, social and financial impacts. A sustainability effort should be consistent with the brand's positioning, and create value for the business, while also doing the right thing for our world. GE, Toyota and others prove there's a right way to do this.