Online Extra: Global Brands: The Breakdown
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While the big stories from this year's Best Global Brands list invariably come from those brands moving up at high speed (see BusinessWeek, 8/6/07, "Biggest Winners") or from those plummeting like stones (see BusinessWeek, 8/6/07, "Biggest Losers"), there are also interesting lessons to be learned from a trio of brand types that hover closer to the bottom of the top 100: brands that are new to the list, brands that didn't make it this year, and brands that are waiting in the wings to seize their moment.
This year, insurance giants had their turn in the spotlight. While not previously rated, AIG (AIG ) (No. 47), AXA (AXA ) (No. 49), and Allianz (ALVG ) (No. 80) are all spending more to bring customer awareness to their brand. "Consumers now have more say about insurance—we're seeing it especially with health care," says Kevin Keller, a marketing professor at Dartmouth's Tuck School of Business. "Being able to market to them directly becomes more important."
Thus we've seen brands such as Munich, Germany's Allianz reaching out to a global consumer market. Last year, it attached its name to the starchitect-designed (Herzog and de Meuron) soccer stadium in its hometown, while this year it's an official sponsor of Formula 1 auto racing. It also plans to join the International Paralympic Committee at the Beijing 2008 Games.
THE FICKLENESS OF FASHION.
The other insurance companies also have been working to put themselves in the public eye. AIG is sponsoring player shirts for the Manchester United soccer club (in a deal that's good for the next four years), and AXA became a first-time Super Bowl advertiser with a giant gorilla campaign. It all echoes a wider trend that's notable across this year's list: the continued and accelerating diversification from the traditional marketing mix. Not that any of these huge brands are rejecting mass elements, such as broadcast, outright, but all are alert and open to alternatives (see BusinessWeek, 8/6/07, "McDonald's Supersized Gains").
It's telling that three of the brands that fell off the 2007 ratings altogether were fashion or retail related, reflecting the phrase: What goes around comes around. Style is cyclical, so these dips may not prove long-lasting, but also notable is that the three that fell are brands with a strong heritage that have struggled to retain relevance in the contemporary climate. Levi's in particular has wrestled with upstart, high-end denim competitors. And upscale Italian jeweler Bulgari fell off the list from its No. 95 spot last year.
"Whenever you're in the luxury category it's always tricky to keep it alive and growing," says Keller. "Bulgari should determine where it wants to play: ultra-rich, rich, or aspirational rich." Both Bulgari and another of this year's decliners, Armani , which fell from No. 97, have started hotel initiatives in recent years (Bulgari with boutique hotels in Milan and Bali; Armani set to open in the Burj Dubai after the skyscraper's scheduled completion in 2009). Both companies are looking to capitalize on the luxury associations consumers already have with their brands. Brave, forward-thinking strategies—that are fraught with risk.
"There's a huge market there and boutique luxury hotels are certainly the wave of the future," says David Vinjamuri, president of marketing training company ThirdWay Brand Trainers and adjunct marketing professor at New York University. "But if you don't do it right, it can hurt the underlying brand. Consumers cue off really small things—if the rooms aren't made up properly, if the pillow favors don't fit the hotel." Bad service could be enormously damaging for the brand as a whole. On the flip side, of course, a great, truly luxurious experience is a memory—and a brand association—a consumer can cherish forever.
WATCHING FOR BRAND OUTREACH.
Then, of course, there are the up-and-comers. Interbrand doesn't officially tally beyond 100 brands, but hinted that names such as Puma (PUMG ) and BlackBerry might feature in the top 100 next year. Heineken (HEIN ) also garnered attention with the successful launch of its Premium Light beer, its first major brand extension in 133 years. "It's not a premium beer over in Holland—it's an ordinary kind of beer there," says Keller of the beer brand. "The funny thing is most Americans don't know exactly where Heineken is from, but they know it's European and that Europe stands for beer. The company has taken advantage of that."
BlackBerry, meanwhile, is currently expanding its global reach to countries like Kenya and Jordan, with plans to launch in China in 2008. It will face a global tech market that is not familiar with its brand name. And with the arrival of the Apple (AAPL ) iPhone, parent company Research In Motion (RIM ) has to step up its brand game in every market. "There are so many strong global competitors involved," says Keller. "That will force them to be better marketers." To see if RIM pulled it off, check back next year.
By Alina Dizik