2013 brand z_latam_top50_report

BrandZ™ Top 50 Most Valuable Latin American Brands 2013 BrandZ™ Top 50 Most Valuable Latin American Brands 20132 3

overview

Latin AmericaIn recent years, a slowdown in Latin American economic growth has been seen in countries such as Brazil, Mexico and Argentina; Chile, Colombia and Peru have enjoyed relatively stable growth, yet still experienced a slight decrease. Although personal consumption has risen in most countries – as a result of increased credit and employment rates – several other factors have contributed to this slowdown.

The global crisis is one of these factors; a combination of the European recession, decrease in demand (mainly from China), a slow recovery by the United States and lower export prices – all of which have contributed to the instability of financial markets. And there are other important issues, like the region’s increasing current account deficit, the difficulty of accessing formal employment and the differences among the peoples’ civil and political rights. This last issue is illustrated by the Social Inclusion index developed by Americas Quarterly Organization, where social inclusion consists of an institutional, social-political and attitudinal environment that goes beyond economy, poverty and inequality reduction. The index analyzes 15 indicators, such as GDP growth, investment in social programs, political and civil rights, and financial inclusion and ranks each of the 11 countries relative to each other (1 -11); these scores are then converted into a scale of 1 -100. For the countries that feature in this report, the Social Inclusion Index scores

are: Chile 68.4, Brazil 53.5, Colombia 48.4, Mexico 45.2 and Peru 27.9. Just to compare, the United States score is 64.6. (The index doesn’t include Argentina.)

However, there were gains and growth in some Latin American countries, both in macroeconomic policy and in civil and political rights. In Brazil and Chile, high levels of social mobilization put a lot of pressure on the government to pay more attention to social issues.

The best example of this social mobilization came in this summer’s protests in Brazil, seen all over the world. The first big demonstration, held simultaneously in various Brazilian cities, was a response to an increase of R$0.20 in bus fares. Widespread, organized and spread via the Internet, these demonstrations forced Governors and Mayors to give a swift response to the Brazilian people. A week later, all fares were returned to the previous prices. Other demands followed this first challenge, namely improvements to health, education, security and the fight against corruption. The giant had awakened.

Yet, despite such bold changes, some Latin American countries are still experiencing very strong political interventionism – Venezuela, Argentina, Ecuador and Bolivia, for example. A sharp reminder of just how complex and diverse Latin America’s development is and will continue to be.

The heAdLine newsDespite the global crisis and other factors that have negatively impacted upon the Latin American economy (such as inflation, exchange rates, and a fall in commodity prices), in 2013 the total value of brands in the BrandZTM Top 50 Most Valuable Latin American Brand Ranking 2013 added up to US$ 135.3 billion, not far off 2012’s value of US$ 135.7 billion. This relatively sustained value shows the strength and resilience of leading Latin American brands.

ChAnge AT The TopThe most important change seen in the BrandZTM Latam Top 50 ranking was the segment shift in the number one spot. Last year, the oil sector headed the list; this year we see a beer brand at the top, Corona. Its success is not isolated, several beer, bakery, food & personal care brands have increased their value and in fact, there are three brands from the category in the Top 10, all of them beers – significantly changing the face of the ranking.

In 2012, Petrobras, the Brazilian oil company owned by the government, held the number one spot. This suffered a big drop in brand value (from US$ 10.6 billion in 2012 to US$ 5.8 billion in 2013, a decrease of 45%) mainly due to devaluation of the commodity in the international markets – which also affected other companies in the oil & mining sectors.

The top 5 positions in 2012 comprised the B2B, services and financial segments; in 2013, the top positions are dominated by beer, bakery, food & personal care, services and B2B, followed closely by retail.

A good yeAr for BeerThe most valuable brand this year is the above-mentioned Mexican beer Corona (US$ 6.6 billion) with a 29% growth – a brand that enjoys a solid positioning and is highly regarded by consumers, not only in Mexico, but also overseas.

The runner-up in the BrandZTM Latam Top 50 2013 ranking is another Mexican brand: Telcel. Its brand value adds up to US$ 6.6 billion, a 22% decrease when compared to 2012. Like Telcel, quite a few brands have lost value this year but other brands in the alcoholic beverages segments compensate for that loss: Skol, Brahma, Antarctica and Bohemia (Brazilian beers) have all significantly increased their brand value. Modelo, another Mexican beer brand, has also improved considerably.

newCoMers And growing segMenTs In the beer sub-segment Águila and Poker (Colombia), and Crystal (Peru) make their debut in the BrandZTM Latam Top 50. Financial is another segment which saw three new entrants: BCP, Interbank (both Peru), and Banorte (Mexico). Retail also welcomed a newcomer, Soriana (Mexico).

Other segments such as bakery, cement, food, retail and cosmetics also performed positively, growing by 49%, 36%, 35%, 13% and 12%, respectively.

BrandZ™ Top 50 Most Valuable Latin American Brands 2013

Eduardo Tomiya Managing Director, South America

andré Galiano Director, South America - BrandAnalytics

Eduardo Tomiya Managing Director, South America

andré Galiano Director, South America - BrandAnalytics


# Brand

Brand Value (US$ Mil.) Brand

Contribution Index

Brand Value

Change 2012-20132012 2013

1 5,114 6,620 4 29%

Beer

2 8,449 6,577 3 -22%

Communication Provider

3 4,698 6,520 4 39%

Beer

4 10,560 5,762 1 -45%

Energy

5 5,263 5,611 4 7%

Retail

6 6,690 5,492 2 -18%

Financial Institution

7 4,240 5,137 1 21%

Energy

8 4,336 4,454 1 3%


9 6,606 4,006 2 -39%


10 - 3,903 5 N/A

Beer

11 2,359 3,803 4 61%

Beer

12 3,307 3,707 4 12%

Cosmetics

13 3,109 3,632 3 17%


# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

27 1,156 2,066 3 79%

Retail

28 1,494 2,034 1 36%

Cement

29 1,496 1,993 2 33%

Food

30 1,980 1,932 4 -2%

Retail

31 - 1,636 2 N/A


32 1,398 1,578 2 13%

Retail

33 - 1,567 2 N/A


34 1,699 1,558 4 -8%

Retail

35 1,834 1,465 2 -20%

Retail

36 4,574 1,427 2 -69%


37 - 1,401 5 N/A

Beer

38 1,168 1,286 3 10%

Retail

39 851 1,284 3 51%

Beer

# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

14 3,318 3,537 5 7%

Retail

15 2,585 3,281 2 27%

Communication Providers

16 3,964 3,274 4 -17%

Airline

17 2,815 3,204 4 14%

Energy

18 3,465 3,009 4 -13%


19 2,511 2,992 2 19%

Retail

20 1,995 2,976 3 49%

Bakery

21 2,656 2,768 2 4%


22 - 2,487 4 N/A

Beer

23 2,842 2,466 3 -13%


24 1,244 2,301 4 85%

Beer

25 2,414 2,094 3 -13%


26 1,352 2,091 1 55%


# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

40 1,251 1,281 4 2%


41 3,074 1,272 2 -59%

Energy

42 1,361 1,248 4 -8%

Retail

43 1,116 1,190 3 7%

Retail

44 - 1,187 2 N/A

Retail

45 - 1,095 2 N/A


46 762 1,046 2 37%

Retail

47 778 1,036 2 33%

Food

48 697 1,010 5 45%

Beer

49 1,708 1,009 1 -41%

Mining

50 1,143 992 3 -13%


Brazil MexicoColombiaChileArgentina Peru

*Claro is based in Mexico but has no operations there.

*


Source: BrandAnalytics and


LATiN AMeriCA

Petrobras’ dramatic devaluation in the capital markets and resulting drop in brand value (by 45%) was a significant factor in Brazil’s lower ranking in the BrandZTM Latam Top 50, but so too was the crisis in the country’s financial segment. In order to stimulate consumption and companies’ investments, the government lowered the basic interest rate and pressured public and private banks to reduce the cost of loans and consequently their spread (the difference between what financial institutions receive in interest compared to what is given back to investors). All banks had to adhere to this policy in order to maintain competitiveness, and the scenario led to lower incomes.

Mexican brands grew from 24% to 29% in their overall contribution to the value of the BrandZTM Latam Top 50. Despite the decline of Telcel the increase in value was led by the beer brands, and banking and retail sectors also performed positively. The decrease in the brand values in the communications segment can predominantly be explained by a drop in some companies’ market value, leaving investors insecure.

Argentina still shows signs of uncertainty. The combined value of its brands dropped considerably and now the country makes up only 1% of the value of the BrandZTM Latam Top 50 (from a more representative 3% the previous year). The poor performance in the oil industry (the Argentinean main driver of value) is responsible for most of this decline.

Chile and Colombia in effect maintained their contributions to the total BrandZTM Latam Top 50. It’s worth noting that, despite having a much smaller economy compared to Colombia and Argentina, Chile holds third place in total contribution, which clearly shows the power of some of its well-positioned brands (such as Falabella), helped by the fact that Chile is now considered the most globalized country in the region, having established visa agreements with the United States and trade agreements with over 50 other countries.

The BrandZTM Top 50 Most Valuable Latin American Brand Ranking 2013 reveals an interesting shift as far as each country contribution is concerned: Mexico overtakes Brazil in value terms with a 29% share, and is now the main contributor. Brazil fell to second position, dropping from 34% to 28% of the total contribution.

Value distribution by Country

Brazil 28%

Argentina 1%

Latam 3%Peru 3%

Mexico 29%Chile 19%

Colombia 17%

Brazil 34%

Argentina 3%

Latam 3%

Mexico 24%Chile 20%

Colombia 16%

CouNTry CoNTribuTioN % ChANge 2012-2013

Brazil -17%

Mexico 22%

Chile -8%

Colombia 3%

Latam 3%

Peru N/A

- +Argentina -66%

2012

2012 2013

LATin AMeriCAn BrAnd VALue % ConTriBuTion By CounTry

Source: BrandAnalytics


Beer, BAkery, Food & PerSoNAl CAreThis is the leading segment in value contribution in the BrandZTM Top 50 Most Valuable Latin American Brand Ranking 2013, with a strong increase of 73%. Within this category, beer is the main sub-segment, representing 76%, with growth driven by Mexican and Brazilian beer (the Brazilian beer brand Brahma had the strongest growth in the region, 61%).

The success of the beer sub-segment is driven by the capital markets’ financial performance of the organizations that own the brands, such as Anheuser Busch, SABMiller, Grupo Modelo and CCU, which has been sustained by the beer brands’ positioning and equities. However, the strong performance is a direct result not only of proper management, but also an increase in consumption and of brand contribution.

B2B (eNergy/oIl, MININg & CeMeNt)This category showed a decrease of 25%. The drop was predominantly seen across Petrobras, YPF and Vale, due to falls in the commodity’s value and exchange rate.

retAIlThis category saw an increase of 5%. Falabella and Sodimac (Chile) represent 39% of the category and saw 7% growth. Liverpool (Mexico), the fourth in the category, had the highest growth (79%).

SerVICeS (CoMMUNICAtIoN ProVIderS & AIrlINeS) The biggest category fall, at 31%. Dominated by communication providers, Telcel (Mexico), this – the first brand in the ranking for this sector – saw a decrease of 22%.

FINANCIAl INStItUtIoNS (BANkS & INSUrANCeS) A fall of 8%, the biggest drop being seen in Brazilian and Colombian banks. Despite this decrease, financial institutions still account for 23% of the total value.

B2B 18%Retail 19%

Services 22%

Financial Institutions 24%

Beer, Bakery, Food & Personal Care 17%

Retail 20%


Beer, Bakery, Food & Personal Care 29%

B2B 13%

Services 15%

CoMpArisoN wiTh oTher brANdZTM brANd rANkiNgs

performance by industry sector

LATiN AMeriCA

39,04073% Beer, Bakery, Food & Personal Care

5% Retail

-8% Financial Institutions

-25% B2B

-31% Services

30,788

18,418

20,354

26,696

iNdusTry seCTor brANd vALue % ChANgeBrand Value ($M)

- +

Category Latam Brazil Mexico Chile Colombia peru Argentina China* global**

Technology 0% 0% 0% 0% 0% 0% 0% 15% 25%B2B 13% 14% 5% 13% 22% 48% 48% 8% 12%Beer, Bakery, Food & Personal Care 29% 39% 30% 3% 28% 22% 22% 10% 20%

Financial Institutions 23% 24% 9% 16% 42% 5% 5% 42% 16%

Retail 20% 10% 25% 57% 6% 0% 0% 2% 7%Services 15% 13% 31% 11% 2% 25% 25% 23% 13%Others 0% 0% 0% 0% 0% 0% 0% 0% 7%

In the BrandZTM Top 100 Most Valuable Brands Global Ranking, technology is the leading category, whereas in the BrandZTM Top 50 Most Valuable Chinese Brands, the service category leads.

2012 2013

BrAnd VALue By indusTry seCTor

*BrandZTM Top 50 Most Valuable Chinese Brands 2013 **BrandZTM Top 100 Most Valuable Global Brands 2013 Source: BrandAnalytics and


BrandZ™ Top 50 Most Valuable Latin American Brands 2013 11

Argentina’s economy is trying to catch its breath and regain the growth that was in part lost by a drop in agricultural production, low global demand for its manufactured exports, and by an energy deficit. Latin America’s third economy, Argentina grew 8.9% in 2011, with a positive CAGR of 5.1% over the past four years. But it had a significant downturn in 2012, with a growth rate of only 1.9% - a reflection of high inflation and the negative impact that exchange and trade controls had on investments. In 2013, the government has promised to regain growth through a policy of expansion, announcing a 4.9% growth for the August forecast (a record automobile production and a harvest increase will help this recovery).

Over the past thirty years, the country has suffered from several attempts to recover its economy: nationalization of industries and social reforms, followed by a privatization program, the linking of its peso to the dollar, and freezing of personal property. The country regained growth after 2003 by fighting corruption, and through debt repayment and development sustainability. Currently, there are positive points in Argentina’s economy, such as growth in the industry sections and the creation

of a social development fund. However, the adoption of some policies has led to serious consequences (including inflation, disparity in exchange rates, restrictions on dollar purchase, energy import increase and restrictions on manufactured import) and this has generated market tension.

The country still faces social dissatisfaction and some persistent structural challenges such as high levels of corruption, a high rate of unemployment, and the need for better health services and education. The current trajectory encompasses some important considerations, such as the reduction of transactions with partnering countries (e.g. Brazil), prohibition of outward remittance, inflationary pressures, demands for more investments in energy, concerns over bad management of public finances, and the return to protectionism in order to strengthen local industries. Last year, the government declared YPF as being of ‘national public interest’ and expropriated 51% of the shares of the Spanish oil company Repsol. While the partnership between YPF and Chevron remains in a letter of intent, changes are still required to the country’s energy policy.

The economic rollercoaster ride continues

Total at current prices (millions) US$477,028 (2012)GDP per capita (annual) US$11,614 (2012)Growth rate 1.9% (2012)Country’s share in regional GDP 8.4 % (2012)CAGR (last four years) 5.1%Foreign direct investment (millions) US$7,183 (2011) US$6,401 (2012)

Capital City Buenos AiresCurrency Argentine New PesoArea 2.78 million km2

Population (thousands) 41,072 (2012)Population growth rate (annual) 0.8% (2010-2015)Life expectancy 76.01 years (2012)Literacy rate of 15-24 year olds 99.2% (2010)Unemployment rate 7.2% (2011) 7.3% (2012)

AnnuAL gdp AT CurrenT priCes

ARGENTINA

ArgeNTiNA key fACTsArgeNTiNA key fACTs

isa TEllEs BrandAnalytics Associate

Carlos dadoorian, BrandAnalytics Consultant

ArgeNTiNeAN brANd vALue % ChANge by seCTor

overALL brANd vALue ChANge 2012-2013

-28% Energy

9% Communication Providers

206% Beer

34% Financial Institutions

- +

Argentinean brands have experienced a very big drop in the BrandZ™ Top 50 Most Valuable Latin American Brand Ranking 2013, losing almost half of their value (43%) with a fall from US$4.7 billion to a mere US$2.7 billion.

Communication Providers 23%

Energy 66%

Beer 7%Financial Institutions 4%


Energy 48%

Beer 22%Financial Institutions 5%

2012 2013

-43%


Compared to the global context of economic stagnation in the United States and in several European countries, Argentina has managed to maintain employment rates and the social development funds designed to improve them, including the ‘Plan Trabajar’, ‘Jefes y Jefas de Hogar’ and the ‘Universal Child Allowance’. An important feature of the Argentinean economy and approach to employment in various sectors remains collective bargaining (for example over workers’ pay and conditions). In many cases, this has created agreements at – or even higher than – the inflation rate, which has exceeded 20% annually over the past five years. (Note that the gap between this figure and INDEC

officiala figures of 10% annual inflation is very pronounced). The government has tried to address the sustained increase in the cost of living by controlling prices, with varying results depending on the type of goods.

Higher consumption levels have forced Argentina to import more and more energy and gas to meet the growing demand. This has generated strong growth in imports and in order to strike a positive trade balance, the government has restricted imports of many products. Earlier this year it also announced that the tax on credit and debit card purchases made abroad would rise from 15% to 20%.

Another issue the government has been tackling is the capital leakage caused by the flight to the dollar (a common Argentine response to economic uncertainty). Since 2011, the purchasing of dollars has been restricted to certain commercial activities, leading to a 50% increase of the parallel dollar rate (also know as the ‘blue dollar’) this year. This has severely damaged the construction industry in particular, since properties are quoted in dollars and currency disparity between the official and parallel market creates tension, as some sellers want to reap dollars from the sale and buyers face difficulty in obtaining them.

rising tides: consumption and inflation

ArgeNTiNA

In recent years, Argentina has managed to sustain the growth of its economic activity. Characterized by strong consumption there are certain industries, such as the automotive and technological (LED TVs, mobile phones and other appliances) that have performed particularly well.

mr. marTín sChijvarG Millward Brown, Argentina

robErTo dE napoli BrandAnalytics Associate

ArgenTineAn BrAnd VALue



For marketing and advertising, this shift presents a challenge. Consumers can now broadcast their reaction and responses across a wide forum – and do so in real time. And just as Argentinean politics are revealed and examined through political tweets, so too are brands finding themselves on the receiving end of customer comment and opinions through the use of social networks. On the other hand, these new methods of interactive communication are so far largely unregulated. This means that digital communications offer political parties – and indeed advertisers – a way round restrictions and legal obligations.

Argentineans have proved to be avid adopters of social networks and the country is also beginning to see an explosion in the use of online video. The development and impact of multi-platform content is therefore becoming of acute interest. It represents a huge challenge for research, not only because of the myriad of new possibilities, but also in terms of the speed of response that is needed. We are talking about research applied in real time.

The world – and in particular Argentina – cannot afford to ignore how the cultural revolution is affecting at least three different generations. Each of these generations has a different approach to the adoption of new communication technologies, and varying degrees of engagement with them. This new economic, technological, communication and cultural order impacts upon all socio-demographic sectors. For this reason, we can no longer just talk about socio-demographic structures, but must consider cultural socio-demographic segmentation.

At Mindshare, we are intent on developing new research methods that enable us to measure and manage the effect of digital communications across this generational and cultural divide. We are creating new R.O.I. and data handling tools, new forms of communication, synergy and interaction – in the certain knowledge that the true power of digital communications lies in the hands of those who best understand them.

Argentina is immersed in an economic, technological and social

evolution. Globalization is increasingly influencing its citizens’ perceptions

and digital communications are impacting upon almost every aspect of daily life. The nation’s embrace of

this paradigm shift is reflected in high penetration levels of broadband and mobile phones and in particular the increasing use of smartphones.

Argentina and the digital

r/evolution

ArgeNTiNA

pablo lEsulauro CEO, Mindshare Argentina

BrandZ™ Top 50 Most Valuable Latin American Brands 2013 15

YPF (Yacimientos Petrolíferos Fiscales) is still the most valuable Argentinean brand, driven by its tradition, strong presence (key in a country with extensive geography) and the emotional attachment derived from the fact that the brand represents Argentina’s largest company – there is a sense of national pride associated with its name. Its brand value has, however, decreased dramatically to US$ 1.3 billion (a 59% drop) but this is not related as much to brand performance as it is to financial matters and, despite this fall, YPF maintains its place at the top of the Argentinean brand ranking.

Part of the reason for the fall in value can be seen as a reaction to the nationalization of the company: 51% of its shares belonged to the Spanish company Repsol until its expropriation by the government in April 2012. With a work model based on the principles of ethics and transparency, quality and security and caring for the environment, the company seeks to lead the way in generating energy for the entire country and is driving growth in a bid to see the nation achieve self-sufficiency. Recently, the company agreed a deal with Chevron to explore 20km2 of the geological site of the ´Vaca Muerta ,́ the third largest reservoir of its type in the world. According to the government, YPF will be the only company given the rights to lead the project, its administrative investments, and its future commercial exploits for the next 35 years.

Argentina’s most valuable brand

BrandZTM Top 5 Most Valuable Argentine Brands 2013

# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

1 3,074 1,272 2 -59%

Energy

2 334 583 5 75%

Beer

3 681 423 3 -38%


4 390 242 3 -38%


5 188 143 3 -24%



BRAZIL

BrandZ™ Top 50 Most Valuable Latin American Brands 2013 19BrandZ™ Top 50 Most Valuable Latin American Brands 201318

Brazil is in a period of transition. With a CAGR of 2.5% over the past four years, the country had a great 6.9% growth in 2010, but has clearly been in deceleration since, having just a 0.9% growth rate in 2012. In 2013, the US dollar hit the highest rate for the last 4 four years, reaching R$2.14. To control this high, the Central Bank sold at least US$ 876 million in the futures market. Investors became increasingly suspicious and there was a downturn of foreign investments, due partly to government state and economic interventions, and also to high inflation.

Seeking better public policies, Brazilians took to the streets to demand more from the government in terms of services (such as transportation, health and education), as well as a stronger stance on the punishment of crimes of corruption. Focusing on short-term policies, with frequent rule changes and low investment in infrastructure, the fiscal incentives promoted had little effect on the country’s productivity.

Other factors contributing to the reduction in growth include the decline in market value of companies dependent on exports (as a result of commodity drops around the world), and the decrease of banking spreads (as a reaction to the interest rate reduction imposed by the government on private banks). This second factor increases access to personal loans, boosting consumption and leveraging the value of brands in the retail sector, but notably reduces the value of brands in the banking sector. Personal loan costs dropped from 9% to around 6% per month, but even at this figure remains very high.

In contrast, companies like Ambev (America’s Beverage Company) and Natura have seen their values strengthened, and companies such as BR Foods, Pão de Açúcar Group and ItaúUnibanco have started to benefit from mergers and consolidations that occurred between 2010 and 2012.

Brazilian consumers stand up for their rights

brAZiL

Total at current prices (millions) US$2,252,926 (2012)GDP per capita (annual) US$11,354 (2012)Growth rate 0.9% (2012)Country’s share in regional GDP 39.5% (2012)CAGR (last four years) 2.5%Foreign direct investment (millions) US$67,690 (2011) US$66,137 (2012)

Capital City BrasíliaCurrency RealArea 8.51 million km2



brAZiL key fACTsbrAZiL key fACTsisa TEllEs BrandAnalytics Associate



brAZiL

The ALTered Age pyrAMidImproved quality of life has increased the average life expectancy of the Brazilian population. This, combined with the fact that the large contingent born between 1950 and 1960 – ‘the baby boomer generation’ – has now reached maturity and has now begun to change the age structure of the population.

The over 65s population represents the highest growth, and may well exceed 4% year-on-year between 2025 and 2030. Meanwhile, the growth rate of the 0 to 14-year-old population has been declining in absolute value from 1990 to 2000. This is due to families having fewer children, even among lower classes (and despite the fact that the infant mortality rate has also shown a downward trend).

In 2008, 0 to 14-year-olds represented 26% of the total population and the over 65s accounted for 6%. The projection for 2050 shows a reversal: children will represent 13% while the over-65s are expected to exceed 22% of the population. The value of ‘pester power’ will perhaps be sidelined for brands by the growing importance of the more considered approach of the older consumer.

A CoLLision BeTween ConsuMerisM And indeBTednessWith economic stability and a steadier employment rate, Brazil experienced a phase of increased consumption, giving many of the population access to consumer goods that they once believed to be beyond their reach. However, the perils of easy credit and high interest rates led to an indebted population that was unable to make ends meet, generating a very high default rate. The indebtedness rate has more than doubled in eight years according to Central Bank – from 18% in 2005 to about 43% now.

This indebtedness is already affecting the decision-making process for the purchasing of staples; it may well result in a trade-off where the strongest brands earn the loyalty of consumers by offering the best value combined with an emotional reward.

The forMALiZATion of doMesTiC work inCreAses househoLd CosTsFor a long time, the employment circumstances of many domestic workers were characterized by high informality with limited access to social rights. However, starting this year, this segment formalized its working relationship with access to labor rights from other categories. Thus, the cost for maintaining maids, nannies, elderly caregivers, drivers, caretakers and so on has substantially increased, forcing families into new agreements and arrangements. The impact of this on disposable income – for both employee and employer – may yet to be fully felt.

AdopTion of gLoBAL ConsuMpTion pATTerns, driVen By TeChnoLogyAs elsewhere across the globe, Brazil has seen the growth of e-commerce and online shopping; the penetration rates of tablets, smartphones and social networking are also rapidly increasing. This window on the world has strengthened the presence of global brands, but it is the brands that fulfill the mantra of ‘glocalization’ that are at an advantage. Consumers engage easily with brands that reflect or are part of the local culture.

In the face of these major and ongoing changes, brands have greater challenges and responsibilities. Brazil remains a market of great opportunities but to capitalize upon them, brands must consistently deliver something beyond the product or service itself. That ‘something’ must be differentiated enough to attract the consumer’s interest, and meaningful enough to merit their engagement and loyalty.

ChAnges in The MAke-up of The fAMiLy uniTIn a more open society with greater tolerance and acceptance of separation and divorce, new family compositions and household profiles arise and significantly affect consumption patterns:

Single-parent families (households with one adult, usually mothers living with their children).

Large families where the children return to their parents’ home with their own children and receive help from grandparents to raise them.

Blended families – couples in their second or third marriage where their children from previous marriages all live together with them.

what Brazilian macro-economics mean for brands

Any plans for strategic development of local or global brands within Brazil must recognize the major demographic, social, economic, cultural and political trends that affect consumption patterns, and the changes that are occurring within them. Here we consider some of the key factors that are shaping the Brazilian consumer profile today.

aurora yasuda Millward Brown Brazil


Brazilian brands have reduced their contribution to the BrandZ™ Top 50 Most Valuable Latin American Brand Ranking 2013 by 9%, reaching a total value of US$ 53.5 billion.


Energy 18%

Healthcare 1%

Retail 7%

Cosmetics 6%

Mining 3%Outros 10%

Beer 15%

Communication Providers 4%Fashion 1%

Food 4% 2012


Energy 11%

Beer 22%

Retail 10%

Cosmetics 7%

Food 6%

Communication Providers 3%Fashion 2%

Healthcare 2%Mining 2%

Outros 12%

2013

brAZiLiAN brANd vALue % ChANge by seCTor +62% Beer

-29% Financial Institutions-40% Energy+44% Retail+24% Cosmetics+52% Food-9% Communication Providers+46% Fashion+77% Healthcare-35% Mining+2% Outros

- +


This year, Skol has increased its value by 39%, reaching US$ 6.5 billion. The brand benefited from the extremely positive financial performance of its parent company, Anheuser Busch.

During 2013, Skol continued investing in brand communication to enhance its appeal to young people, for example through platforms such as Rock Skol, Skol Beats, and more recently, Skol Sensation. According to Britain’s ‘The Drinks Business Magazine’, Skol is the fifth most popular beer in the world (across all licensed beers worldwide). In becoming the most valuable Brazilian brand, Skol has surpassed Petrobras, the Brazilian oil company.

A note on Petrobras Petrobras was Brazil’s most valuable brand for three consecutive years and in 2012 came top of the BrandZTM Latam Top 50, but it has now dropped to second place. This is due to a combination of factors: currency devaluation (which in a commodities industry is sharply felt), prices controlled by the government (given that Petrobras is a state-owned company, it is used as a means to keep inflation rates low) and uncertainty surrounding future projects.

Brazil’s most valuable brand

2012

2013

-9%


BrAZiLiAn BrAnd VALue



BrandZ™ Top 50 Most Valuable Brazilian Brands 2013# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

1 4,698 6,520 5 39%

Beer

2 10,560 5,762 1 -45%

Energy

3 6,690 5,492 3 -18%


4 6,606 4,006 2 -39%


5 2,359 3,803 4 61%

Beer

6 3,307 3,707 5 12%

Cosmetics

7 1,496 1,993 2 33%

Food

8 4,574 1,427 2 -69%


9 851 1,284 4 51%

Beer

10 762 1,046 2 37%

Retail

11 778 1,036 2 33%

Food

12 697 1,010 5 45%

Beer

13 1,708 1,009 1 -41%

Mining

# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

27 436 455 1 4%


28 318 444 1 39%


29 216 422 4 95%

Fashion

30 450 396 1 -12%

Airline

31 342 390 1 14%

Healthcare

32 479 382 3 -20%

Retail

33 386 361 1 -7%

Stock Exchange

34 351 345 2 -2%

Fashion

35 318 306 2 -4%

Education

36 236 295 3 25%

Fashion

37 292 287 1 -2%

Retail

38 219 280 2 28%

Drugstores

39 600 260 1 -57%


# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

14 670 972 3 45%

Retail

15 589 916 3 56%

Retail

16 - 810 1 N/A


17 500 748 5 50%

Insurance

18 519 680 2 31%

Loyalty Programs

19 555 656 1 18%

Credit Cards

20 817 641 1 -21%


21 412 634 2 54%

Retail

22 569 569 3 0%

Information Technology

23 332 513 3 55%

Retail

24 295 474 1 60%

Healthcare

25 349 473 3 35%

Retail

26 187 458 2 144%

Car Rental

# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

40 560 250 3 -55%

Airline

41 - 241 1 N/A

Aviation

42 258 232 1 -10%

Retail

43 - 216 2 N/A

Drugstores

44 - 208 3 N/A

Food

45 - 207 1 N/A

Utilities

46 - 196 3 N/A

Food

47 - 195 2 N/A

Education

48 - 183 1 N/A

Real State

49 185 178 1 -4%

Retail

50 - 161 2 N/A

Healthcare


26 BrandZ™ Top 50 Most Valuable Latin American Brands 2013 #BrandZ™ Top 50 Most Valuable Latin American Brands 2013

brAZiL

Brazil has entered the era of technology in almost a single generational leap. Already, it is the third most connected country in the world, and its citizens are gradually becoming more well-informed, more demanding, more participatory, more aware of their nation’s problems, but also of its assets and advantages.

Well-informed people make more empowered citizens. Let’s take, for example, the recent protests in the streets of Brazil. The protests did not occur only in major urban centers, but also in small towns nationwide. Without digital media, the people would not necessarily have been aware of the level of mobilization throughout the country, and the government could easily have underestimated (or concealed) the magnitude and determination of public opinion. While the government is only now taking the first steps in its use of technology to listen to the population and provide better quality services, it’s clear that

the people have made extensive use of digital media for mobilization on important issues in everyday life.

And another phenomenon has occurred. For the first time, Brazil has seen its major media outlets altering their opinions and messaging in response to the influence of popular movements – apparently acknowledging the need to align with the people and their expectations in relation to the press.

Digital media creates a marvelous paradox: far-reaching and able to deliver a world view, at the same time it helps people look more closely at what’s happening in their own communities and empowers them to get involved in local issues. Previously, when only mainstream forms of communication media were available, this would not have been possible. All of this changes a society, changes a country.

Brazilians harness the power of

digital discourseGal barradas Partner and CEO F.biz, Brazil

chILE


ChiLe

economic forecast remains sunny, with some clouds

One of the most globalized countries in the region (in terms of international trade agreements), of the 6 nations covered in, the BrandZTM Top 50 Most Valuable Latin American Brand Ranking 2013, Chile currently ranks third for forecast growth, at around 4.4% for 2013. It also had the second largest growth in 2012 . With a CAGR of 4.0% over the past four years, the country’s rates of growth from 2010 to 2012 have ranged between 5.9% and 5.6%. Despite a recent deceleration due to a fall in copper prices and a consequent increase in the balance deficit (impacted by the economic slowdown in China), and a drop in investment and domestic demand (according to IMF), there is still a sense of optimism in the country. The financial and economic sectors show a period of stability due to low inflation rates, and subsequent falls in unemployment rates since 2009.

Motivated by the recent agreement with the United States visa waiver program (whose parameters are considered key requirements for developing countries) the country is regarded as the most open economy in the region. It has signed numerous trade agreements and is doing business with more than 50 countries, including the United States, European Union, China and Japan. These treaties are the result of an economic liberalization that began three decades ago with the aim of opening Chile’s economy to other markets in the world. It has great competitiveness and a strong retail sector composed of banking institutions and large companies with renowned brands such as Falabella, Lan and Sodimac. The country has a growing labor force and one of the lowest poverty rates in the region; however, protests have arisen throughout the country, demanding better quality in services provided by the government, and greater access to education.


Total at current prices (millions) US$268,310 (2012)GDP per capita (annual) US$15,372 (2012)Growth rate 5.6% (2012)Country’s share in regional GDP 4.7% (2012)CAGR (last four years) 4.0%Foreign direct investment (millions) US$5,477 (2011) US$4,864 (2012)

Capital City SantiagoCurrency Chilean PesoArea 756 thousand km2



ChiLe key fACTsChiLe key fACTs Carlos dadoorian, BrandAnalytics Consultant


ChiLe

Topics of complaint have changed. Whereas previously, criticism tended to centre on retail, and later banking, now there is a return to issues of mass consumption and especially food.

This phenomenon has found resonance in the media, generating a proliferation of TV programs dedicated to denouncing breaches, not of civil or human rights, but of consumer rights. The media itself has given rise to a need for new regulations of consumer issues in Chile. As a result, in the second part of this year, a new law will be enacted to regulate nutritional labeling.

A clear sign of the strength and impact of consumers’ increased organizational capacity is the government’s recent creation of agencies like SERNAC (Servicio Nacional del Consumidor - National Consumers Service, a Government institution) on finance which protects consumers’ rights.

How are brands reacting to this new context of consumer participation? Insufficiently, it seems. Brands haven’t redefined their relationship with consumers, who are now clearly social actors – as seen especially clearly in online social networks. In Chile, social networks still represent the fastest growing platform for participation and organization, it’s where consumers express themselves most clearly and fully. But, brands have not yet grasped the fact that the demand coming from these ‘new consumers’ is for a more horizontal and candid

relationship. Instead, brands limit their use of social networks to two areas: promotional advertising and complaint departments.

Similarly, brands apparently have misunderstood or ignored the demand for more transparency. Brand managers seem to believe that the more horizontal, candid approach will leave them vulnerable. However, the transparency consumers want doesn’t imply a larger quantity of information, but rather more sincerity and honesty, a relationship built around dialogue, not monologue. Consumers seem to be saying, “Don’t leave me in the dark. And when you do provide information, don’t insult my intelligence.” Today’s consumers demand two things: plain talk, and to be informed about how problems will be resolved.

This demand for transparency doesn’t necessarily mean a desire for more data or more detail about aspects that don’t interest consumers. They just want to be leveled with. Two recent cases exemplify the fact. One study revealed that packaged bread labeled ‘light’ provides more calories than the regular, unlabelled marraqueta (a traditional Chilean type of baguette). Another study showed that olive oil is not always as beneficial to health as people have been led to believe.

So, consumer mistrust is on the rise. Brands make and break promises or are vague and insincere in their communications. Consumers themselves are

questioning regulations – not just product quality itself, but the actual norms regulating that quality. They are focusing on the distinction between what’s legal and what’s legitimate. This is especially evident in the case of health insurance and retirement funds, where consumer organizations currently have over eighty thousand petitions for legal recourse pending.

In the light of this trend, the telecommunications industry has moved a step ahead by establishing self-regulation; something other industries have failed to do. They changed their language and stopped talking about volume in terms of number of megabytes (which by the way, they were not really providing) and responded to consumers’ new status, proactively heading off potential problems before they could arise. The most recent example regards call centers: the day after a news item appeared denouncing irregularities, SUBTEL simply stopped all sales by phone. The company didn’t wait for an investigation, but ended the problem almost instantly.

Another example that speaks of sincerity is H&M’s arrival in Chile with a very publicized promise of fair price for fashion; a promise the company has apparently been successful in keeping. H&M is an international brand that probably has experience in these issues, and knows how to relate to consumers on their new terms. It has recognized that in a socially networked economy, every individual is empowered to be either an advocate or ‘badvocate’ (critic) of a brand. It’s clear that Chilean consumers are determined to exercise this power, so brands must hasten to develop strategies to mitigate against its effects and capitalize on its potential for good.

Chilean consumers make their voices heard

In Chile, the growing participation and empowerment of consumers is a hot topic. In fact, consumer complaints are becoming more frequent and have evolved from simple criticism to organized actions. Consumers have become more clear and direct in demanding their rights in general, as well as their rights to information.

ChiLeAN brANd vALue % ChANge by seCTor


-4% Retail

- +

Chile slightly raises its level of contribution to the BrandZ™ Top 50 Most Valuable Latin American Brand Ranking 2013 increasing the value of its brands by 3%, to a total of US$29.8 billion.

+3%


Retail 59%

Beer 2%2012 Paper 2%

Energy 10%

Airlines 14%


Retail 57%

Beer 2%2013 Paper 3%

Energy 11%

Airlines 11%

+27% Financial Institutions

+11% Energy

-20% Airlines

+11% Paper

+29% Beer

marCEla pérEz dE arCE Client Service Director, Millward Brown Chile


ChiLeAn BrAnd VALue


# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

1 5,263 5,611 5 7%

Retail

2 3,109 3,632 3 17%


3 3,318 3,537 5 7%

Retail

4 3,964 3,274 4 -17%

Airline

5 2,815 3,204 5 14%

Energy

6 1,980 1,932 5 -2%

Retail

7 1,699 1,558 5 -8%

Retail

8 1,361 1,248 5 -8%

Retail

9 1,116 1,190 3 7%

Retail

10 987 987 4 0%

Retail


ChiLe

On a cautionary note, Chile’s economy is still dependent on the mining of minerals. Copper provides 20% of the GDP and 60% of the exports, of which 40% goes to China, making Chile heavily dependent on demand from China being maintained. At present however, the strong economic performance is creating a sense of optimism; people save money for a rainy day and invest in education, one of the pillars of the country’s development.

Salaries are growing (+5.9%) – way above inflation (1.7%), and above GDP growth (5%) – while unemployment (6.2%) is rapidly decreasing, especially in the greater Santiago area (1%). These factors are generating a strong increase in private spending (+9%). Chileans are traveling abroad for tourism (+11%), buying more cars (+12%) and spending a lot more on clothing (+30%), according to the National Institute for Statistics.

The growth has boosted consumption. On the FMCG front, there is little room for markets to expand since the population growth rate is below 1% and consumption is already high. Growth is due mostly to a new range of more sophisticated products, for example, the health and wellbeing product sector has been one of the main drivers of the economy, with many new products focusing on a healthier lifestyle. Consumption of premium products is also on the rise, with lower income households that had previously only aspired to them, now actually able to afford them.

Strong economic growth and investment in the retail industry has had a big impact on the way in which Chileans shop. Proximity to hypermarkets, more disposable income and less time to spend on FMCG shopping trips have changed the way Chilean women conduct their shopping missions. They are significantly increasing the amount of products they purchase on each trip, reducing the frequency of purchase (-16%), while buying bigger pack sizes across more categories in the same trip (+11%).

The retail structure is also in continuous development. Chile already has the biggest concentration of modern trade in Latin America (around 87%) with discounters and wholesalers bringing a new dynamic to this market, and also helping to boost private labels alongside the big players such as Walmart and Falabella. Cencosud, Chile’s biggest retailer, is increasing its presence in other countries in Latin America too (Peru, Colombia) and gaining the confidence of consumers there due to its high levels of service delivery.

As Chile’s economy continues to expand, the future looks bright: unemployment and inflation rates are low, so is poverty, and there is a lot of investment in education. With these strengths and others – such as the increase in tourism – people are now able to invest in consumption of high-end manufactured products and services. They are dedicating more time to themselves by traveling more and buying more clothes, while optimizing their FMCG shopping trips in order to save time.

A thriving economy creates an atmosphere of optimism

Today, Chile is one of the most developed countries in Latin America and is expected to continue to grow in terms of quality of life, education, and health, to become a developed country by 2015. The economy is booming. GDP growth has averaged 5% in the last five years due to efficient exchange and interest rate management, focused on attracting foreign investment and on infrastructure.

BrandZ™ Top 15 Most Valuable Chilean Brands 2013 “The biggest selection of products and the lowest

prices”. This is Falabella’s offering – a retail brand that sells a wide range of products including domestic appliances, technology, furnishings and clothing. Its scope and scale help explain why it remains the most valuable brand in Chile. With an increase in value of 7% to US$5.6 billion, the company retains its huge power. Its biggest advantages are its integrated retail and financial services, such as insurance, credit and cards, and the consistency of its delivery.

Playing a major role in Chileans’ everyday life, Falabella is also leading Chile’s retail expansion to other countries in Latin America such as Argentina, Columbia and Peru, and has become the largest department store in South America.

Chile’s most valuable brandviniCius da silva Managing Director of Kantar Worldpanel responsible for Chile, Colombia, Ecuador and Venezuela.

# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

11 948 869 4 -8%

Retail

12 690 786 1 14%

Paper

13564 748 4 33%

Beer

14600 607 1 1%


15 - 600 3 N/A




35

Colombia is considered to be a stable developing country, showing a CAGR of 4.1% over the past four years and with a forecast growth of 4% for this year. Nevertheless, some of its production sectors have been affected by factors such as decreased oil and coal activities and by the global crisis, which caused a fall in export volume and value of these commodities. With unemployment rates dropping since 2009, the country has been of great interest to investors, as seen in a recorded rise in foreign net investment since 2010.

There are a number of reasons for this appeal to foreign investors. The strengthening of national companies (Nutresa, Ecopetrol among others) is one of them, and this has also helped trigger the country’s entry to the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa – countries that have been identified as rising economic forces). This empowerment prompted the possibility of investment diversification in other sections of the economy besides oil and mining, such

as manufactured products, food, and retail. A second reason is the free trade agreements signed with the United States, Europe, South Korea and Costa Rica, and a third reason is the country’s investment program and the reorganization of its tax structure.

Added to these factors is the increase of consumer credit, encouraging the nation’s growth. A country once only recognized for its problems (such as conflicts and trafficking), is today attracting attention for its consumption, which is being boosted by the development of the middle class. Although a mild retraction of the industry is expected, sectors such as mining, construction, agriculture and commerce should show improvement. It is a significant change for a country that was until recently dependent mostly on commodities. In this scenario retail, banking and communication brands – like Claro (which replaced the Comcel brand), and SABMiller (Águila and Poker) – are growing in value.

A destination of increasing interest to investors


Capital City Bogotá Distrito FederalCurrency Colombian PesoArea 1.14 million km2



cOLOMBIA

CoLoMbiA key fACTsCoLoMbiA key fACTs




CoLoMbiA

This is why, according to experts, Colombia is part of the CIVETS group (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) – countries that have been identified as the next generation of economic tigers.

Both the BRIC and the CIVETS have demonstrated their influence and economic strength in an unfavorable global environment. However, last year the impact of the world crisis also affected their economies, evidenced by negative results in different macroeconomic indicators.

Despite the external context, characterized by weak global demand, falling prices of commodities and weaker exchange terms, the Colombian economy had only a moderate

deceleration, registering a growth of 2.8% in the first quarter of 2013 compared to the 3.1% observed last year.

This fall in growth is mainly explained by fewer exports, a halt in activities of the mining sector (oil and coal) and weaker international commodities’ prices.

In terms of consumption (demand), Colombia demonstrated moderate growth of 3.5% annually, a reflection of lower consumer confidence. Colombians also reduced their debt levels, an indicator that had been increasing in a significant way up until the first half of 2012; households are now allocating a larger portion of their income to paying debts, thus moderating the consumption of goods and services.

This in turn had a negative impact on industrial activity, which was the only sector of the economy that experienced a contraction (-4.1%) in 2012. However, consumer confidence in the last period was higher than for the first quarter of 2013, and retail figures suggest better consumption performance.

Foreign investment represents a great opportunity for Colombia, since the concentration of investment (oil and mining, with 70% of total flows) has changed its composition towards a greater variety of economic activities, such as the manufacturing sector, restaurants and hotels, storage and retail, communications and financial institutions.

Likewise, foreign investors have seen that Colombia presents an opportunity to promote big luxury brands, a market that according to entrepreneurs has a potential of one million customers, and 50 million dollars a year. Brands such as Dolce & Gabbana, Mabe, Montblanc and Hublot, have decided to set foot in the country or increase their expansion in different Colombian cities.

Alongside growth through foreign investment, the country is facing new free trade agreements: United States (2012) and Europe (2013), South Korea and Costa Rica. These agreements signify a challenge for all actors of the economy (and have prompted displays of public protest) as local products face the entrance of highly competitive global products, backed with financial muscle.

Colombia’s capacity to focus the flow of foreign investment and take advantage of the free trade agreements depends on the increase in consumer confidence. This will see its repercussions in an increase in internal demand and therefore a more productive and strengthened sector able to compete in the global market.

Colombia: A country of opportunities

In the last decade, Colombia has been considered one of the most interesting countries for foreign

investors. The country has had a sustained growth of 4% on average, and this has seen the strengthening of national companies such as Grupo Nutresa, Ecopetrol,

Grupo Aval and Cementos Argos, amongst others. These companies’ latest investments have turned them into

multi-Latin companies with a direct presence in Central and South American countries and the United States.


- +

Colombian brands are worth US$ 23.1 billion in the BrandZ™ Top 50 Most Valuable Latin American Brand Ranking 2013, (the same value as 2012). The main difference in this year’s ranking is the inclusion of two brands from the beer industry: Águila and Poker.

Energy 18%

Beer 28%




2012

2013

0%

Retail 5%

Energy 22%

Beer N/A

+29% Beer


mr. GabriEl CasTEllanos Managing Director, Millward Brown Andean Region Communication Providers 29%

Retail 6%

Financial Institutions -12%

Energy +21%

Retail +10%

Communication Providers -93%


CoLoMbiAN brANd vALue % ChANge by seCTor

CoLoMBiAn BrAnd VALue


37

# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

1 4,240 5,137 1 21%

Energy

2 - 3,903 5 N/A

Beer

3 3,465 3,009 5 -13%


4 - 2,487 4 N/A

Beer

5 2,842 2,466 4 -13%

Bakery

6 2,414 2,094 3 -13%


7 1,168 1,286 4 10%

Retail

8 1,251 1,281 4 2%


9 1,143 992 3 -13%


10 517 479 3 -7%



CoLoMbiA

BrandZ™ Top 10 Most Valuable Colombian Brands 2013

Ecopetrol’s brand value (US$ 5.1 billion), shows no major change when compared to 2012. A Colombian joint venture (mainly led by the government but with participation from investors), the brand was second in the 2012 ranking, taking the place of Comcel, a telecommunications company. Positioning itself as a company of energy for the future, Ecopetrol promises to find and convert energy sources into value for customers and shareholders (the company does not distribute oil, just implements exploration and refinement). Set up in 1951 as the Colombian Oil Company, today it is the biggest company in the country, one of the four main oil companies in Latin America, and in the top 40 across the world. Promoting its principles of responsibility, integrity and respect, the brand looks to act upon these values in line with its strategic vision to be a competitive international company, whilst respecting the environment.

Colombia’s most valuable brand

It is only 20 years since the Colombian market underwent its first economic ‘opening’, bringing new brands and companies to compete in the local market. However, at that time, high duties and taxes continued to favor the local products. That early experience taught local brands how to compete and how to prepare for the seductive avalanche of highly desirable global brands. Today, the scenario is different: following the signing of the FTAs with the European Community, Asian countries and the United States, the competitive arena has become more aggressive. On the one hand, the taxes will no longer serve as a protective shield, on the other, the competitive conditions have evolved.

The first and most important change is that the image of Colombia abroad has improved and today it is perceived as a better destination for investors. It is certainly the most attractive market in the region, given the unpredictable nature of surrounding neighbors like Ecuador and Venezuela. Furthermore, Colombia has 44 million inhabitants (consumers), making it the third most populous country in Latin America, after Brazil and Mexico.

From a branding perspective, the battle between local and global brands has begun. However, today the mere promise of international or global will not be enough to compete in a market that is increasingly demanding and sophisticated. The Colombian consumer is more mature and aware of the value for money proposition of the brands he buys; he is also very active digitally and has a broader view of the world. According to “Digilats” (a study by JWT about the digital habits of Latin-Americans, made in 2013), 60% of Colombians have Internet access and of that group, 93% surf the web every day. Additionally, Colombia has one of the highest mobile Internet penetration rates in Latin America with an average usage time of over seven hours per week. The Colombian consumer has become more demanding and is already a high tech shopper.

To complete the picture, local industry is prepared: the quality of local products and services has improved to global standards and now are second to none. It will be interesting to see how this brand battle develops; the big winner is likely to be the consumer who every day has more power, and more choice.

Colombia: Between the local and the globalAt the time of writing, thousands of Colombians are protesting on the streets and joining a strike organized by Colombian farmers. Their concerns are that the conditions signed and agreed in the Free Trade Agreement (FTA) with the United States will significantly affect their income and way of working. The belief is that the agreements, which have recently come into force, will flood the market with products at prices that small-scale Colombian farmers cannot compete with. The unrest is just one of the effects of the many FTAs recently signed by Colombia.

juan pablo roCha CEO, JWT Colombia



39


41

Mexico has recently seen a slowdown in growth, impacted by a sharp decline in external demand. Showing a 1.7% CAGR over the past four years (among the lowest in the region) and a 2013 forecast of 3.1%, the country has nonetheless managed to maintain some stability in its growth rate – ranging between 3.5% and 3.9% - since its recovery in 2010, This is a result of the increasing domestic demand that continues to stimulate the country’s economic growth, especially in investment, as well as having a strong correlation with the performance of the Mexican economy. The new government faces the challenge of further stimulating this growth; prioritizing structural, fiscal, governmental and energy reforms; and exploring the possibility of spending cuts to make up for the reduction of tax revenues. There are signs that the weak external demand is starting to affect domestic demand as well, where growth is still insufficient to create more jobs (with a slight drop in unemployment rates since 2009), to sustainably increase wages and to improve the

country’s welfare. The rate of foreign investment in the country has been falling since 2008, with 2012 being the lowest rate in 12 years. However, a return to growth in the second half is predicted, propelled by an apparent improvement in the economy of its main trading partner, the United States.

Even with positive macroeconomic tendencies and a growing consumer market, a large part of the population continues to live below the poverty line. Having a political history marked with violent confrontations, the government is working to join forces and raise the country’s competitiveness. With its large population, good geographical location and numerous international agreements, the country is seen as an interesting consumer market by several global brands. In this context, Mexican brands have been struggling to make the most of this growing market, with the biggest brands concentrated in the hands of very few companies.

The paradox of increased purchasing power and pronounced poverty

Total at current prices (millions) US$1,173,600 (2012)GDP per capita (annual) US$9,946 (2012)Growth rate 3.9% (2012)Country’s share in regional GDP 20.6% (2012)CAGR (last four years) 1.7%Foreign direct investment (millions) US$8,685 (2011) -US$4,730 (2012)

Capital City Ciudad de MexicoCurrency Mexican PesoArea 1.96 million km2



MExIcOMexiCo key fACTsMexiCo key fACTs



43BrandZ™ Top 50 Most Valuable Latin American Brands 201342

MexiCo

The Mexican economy has shown a positive trend on macroeconomic variables, yet most of the country’s population has failed to enjoy the benefits of this growth and stabilization. The number of those living under the poverty line had risen from 52.8 million in 2010 to 53.3 million by the end of 2012, according to data from the country’s National Council of Social Development Policy Evaluation (Coneval). Coneval’s data, however, shows another interesting trend: despite this growth in poverty, extreme poverty decreased from 2.6% to 2.4% in the same period. The dynamics of these figures illustrate a part of Mexican reality, a country in which a huge part of the population still lives under poverty lines but has increased its overall purchasing power. Mexico’s GDP per capita, with a value of $9,741 (current US$) and having grown 2.6% per annum from 2008 to 2012 according to the World Bank, places the country as fifty-seventh; not far behind other major Latam economies such as Argentina (51) and Brazil (53).

As with other Latin American nations, during the second half of the twentieth century Mexico followed an economic model that aimed to industrialize the country through the substitution of imports. This meant the development of models based upon

heavy subsidization, increased taxation, and highly protectionist trade policies, leaving the country dependent upon a handful of industries. In 1982, the system cracked, and Mexican authorities had to look outward for the first time as a way to achieve development.

Nowadays, Mexico is open to international trade, even having once held the position as the country with the most Free Trade Agreements in the world. With a privileged geographic location, Mexico has proven to be a true ‘hinge state’, holding strong commercial relations with both cultural and geographical continuums to which it belongs: North America (namely under NAFTA) and Latin America (under various FTAs and multilateral agreements such as the ones held under the umbrella of the Latin American Integration Association, ALADI). But Mexico has also gone far beyond its continent; it holds 14 FTAs across the globe encompassing partners such as Japan, the European Union and the European Free Trade Association.

With a huge population (surpassed in the region only by Brazil), its geographic location (which has granted access to the US market and has influenced

consumption habits), as well as its numerous international agreements (which have eased access to the country), Mexico has become an interesting consumption market for brands from across the globe. Despite this openness, the US remains the country’s biggest trading partner by far, holding more than 50% of its imports and almost 80% of its exports.

swinging BACk To The pAsT, Looking up for The fuTureIn 2012, Mexico held general elections, which included the ballot for a new President of the Republic. The elections resulted in the return of the PRI (Revolutionary Institutional Party) who had ruled the country without interruption from 1929 to 2000 putting an end to the right wing PAN’s (National Action Party) 12-year rule.

Incumbent Enrique Peña Nieto’s government inherited a country filled with challenges: an economy which, because of its interdependence with the American market, was hit following the 2009 World Financial Crisis, as well as a society heavily

struck by violence after the previous government’s attempts to fight drug cartels, which resulted in more than 50,000 deaths across the country.

Peña Nieto’s campaign platform focused heavily on economic matters and structural challenges in the energy sector, the tax system and labor markets; everything wrapped-up under what he called the ‘new-PRI’. The nature of such platforms, as well as the proposed change in the way drug cartels were being confronted, has had an effect on the way Mexico is perceived internationally and has, somehow, renewed a sense of opportunity in the country. Peña Nieto has aimed to unite political forces under what is called the Pacto por México (Pact for Mexico) with varying degrees of success: violence is no longer the central axis of the political discourse, even though it is still an everyday issue, instead the discussion for structural reforms in key sectors have taken the country’s political stage. Peña Nieto’s government has sketched some changes that could potentially boost the country’s competitiveness, though there is still a long way to go before any real effect of such measures is felt, especially since they depend heavily on political will and fragile alliances that still have yet to be fully forged.

Mexico: A country of increasing contrasts

According to data from every single international entity available, Latin America is the most unequal region in the world in terms of income. Mexico, as a key player, proves to be far from an exception to the rule.


mr. FErnando alvarEz Kuri Director of Millward Brown Optimor Mexico


MexiCo

From beer to bakery, passing through financial institutions and cement, Mexico’s BrandZTM Top 15 ranking illustrates the brand richness in the country, showing also another crucial characteristic of the Mexican market, which is that power is concentrated in a very few hands. Tycoon Carlos Slim’s empire owns at least four brands on the ranking (Telcel, Telmex, Inbursa and Sanborns); Walmart’s Mexican branch, the largest Walmart operation of the world after that of the US, owns two brands, including the most valuable retailer in the country (Bodega Aurrerá and Superama); and Grupo Modelo, the largest brewer in Mexico, appears in the ranking with two, including the one occupying the spot as the most valuable brand (Corona).

Of all the categories included, one of the most dynamic has been retailing. Historically, Mexico has developed a strong retail culture yet it has been dominated by just a handful of local powerhouses such as Bodega

Aurrerá, Liverpool and Sanborns, and complemented by international retailers (namely Inditex and its whole brand portfolio). But things have changed lately. China’s entry into the World Trade Organization in 2001 has forced Mexico to lower its tariffs for imports of said country, meaning that international players whose production depends heavily on China and Southeast Asia are now considering Mexico as an attractive market to enter. Some of these players include heavyweights such as Gap, H&M and Forever 21 and their entry is forecasted to have an important impact on the country’s retailing outlook, since local brands have grown isolated, protected by the government’s past international trade policies.

But apparel is far from being the only category that is suffering the effects of past protectionist practices. Take for instance the Mexican furniture industry which, by the end of the nineties, occupied third place by sales volume in the world after the US and Italy,

and which has been facing a hard scenario when confronting imports from Brazil and China. Competitiveness in the country is still an issue but, more and more, Mexican brands have started searching for ways to overcome an increasingly attractive and thus challenging market, taking advantage of their brand heritage as well as their position as locals.

The TiMes They Are A-ChAngin’ Mexico may be traditional, but it is also open to the new: the country is one of the region’s largest Internet markets and it is set to grow. Mexican consumers spend more time online and doing more activities than they did in the past (internauts in the country spending over four hours a day doing more than three simultaneous activities). Nine out of ten Internet users in the country use social media, thinking of it as the second most relevant media to obtain information from (the first place being search engines); in fact, between internauts, Internet is the most used and trusted media, surpassing public and paid television, radio and print. In this scenario, mobile is key. 70% of the 46,600,000 users in the country navigate through mobile devices. Alongside Mexico’s competition laws on telecoms, this has pushed the importance of a few brands in the sector, namely gigantic Telcel, the second most valuable brand in the country.

But telecoms are not the only category in Mexico in which competition is an issue. Media is also an industry concentrated on a very few: only two broadcasters, Televisa (third most

valuable brand in Mexico) and TV Azteca, hold most power in the market. Yet, competition laws in the country are set to change. Aiming to increase Mexico’s competitiveness, the government is progressively planning to open more and more sectors and industries. In the case of media, the renewal of legislation is set to change the panorama swiftly, opening up possibilities for new competitors – foreign satellite and cable operators and maybe even one new broadcaster led by Carlos Slim – to try and shape Mexican opinion.

With high penetration, TV is still seen as the key media to start marketing activities with, but more and more, brands are changing their approach towards it. The perceived ‘safety’ offered by this media has led to an important stage of saturation: in 2012, there were 595 ads a month aired in primetime, a huge change compared to 2005’s 462. Saturation has impacted ad effectiveness, lowering scores on communication and increasing a sense of glut and passiveness towards the message, according to Millward Brown’s DynamicTrackingTM Database.

In this new context, to boost their marketing communication efforts, brands in the country must take into consideration the consumer’s new relationship with media, which goes far beyond just saturation. Mixed media consumption, the search for more active participation as well as interesting shifts in preferences will not only be the most basic challenges advertisers will have to face in Mexico; they will have to create new ways of seeing, narrating and generating experiences in an increasingly competitive market.

A rich brand environment, but concentrated in a very few hands

With the country’s openness to international markets, its geographical location, and the plethora of local options available, Mexican consumers have historically been in touch with a wide array of brands. Furthermore, this pool keeps growing as big international players realize consumers in the country are brand oriented, savvy and willing to spend if the right buttons are pushed.


mr. FErnando alvarEz Kuri Director of Millward Brown Optimor Mexico

“There are some moments when only a Corona will do.” With a communication strategy aimed at interaction with the younger market, the brand grew in value by 29% to US$6.6 billion, ousting Mexico’s big wireless service provider, Telcel (which faced a considerable decline from US$8.5 billion to US$6.58 billion).

Created in 1925, Corona beer quickly became the lead brand of the Modelo Group. Through clear communications, the company promotes the brand’s values of transparency and quality, in addition to the more traditional and fun attributes that appeal to Mexicans. This has led to it becoming the highest-selling brand in Mexico and to being distributed in more than 180 countries.

Mexico’s most valuable brand

# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

1 5,114 6,620 5 29%

Beer

2 8,449 6,577 3 -22%


3 2,585 3,281 3 27%


4 2,511 2,992 2 19%

Retail

5 1,995 2,976 5 49%

Bakery

6 2,656 2,768 2 4%


7 1,244 2,301 5 85%

Beer

8 1,352 2,091 3 55%


9 1,156 2,066 4 79%

Retail

10 1,494 2,034 2 36%

Cement

# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

11 1,398 1,578 3 13%

Retail

12 - 1,567 3 N/A


13 1,834 1,465 3 -20%

Retail

14 - 1,187 3 N/A

Retail

15 514 743 4 45%

Retail


MexiCo


Mexico holds the first spot for the first time in the BrandZ™ Top 50 Most Valuable Latin American Brand Ranking 2013. The value of its brands added together is US$ 40.2 billion; this represents a 20% increase compared to 2012.


2012 2013

+20%


Cement 4%

Bakery 6%


Retail 22%

Beer 21%

Retail 25%


Bakery 8%

Cement 5%


Beer 22%

+12% Retail

-27% Communication Providers

+8% Beer

+25% Bakery

+14% Cement

- +

+126% Financial Institutions

BrandZ™ Top 15 Most Valuable Mexican Brands 2013


MexiCAN brANd vALue % ChANge by seCTor

MexiCAn BrAnd VALue




MexiCo


MexiCo

Automotive Market has become more competitive than ever. Furthermore, the newer players in the market such as Honda (1996), Toyota (2001) and Mazda (2005), have established important practices and standards, such as a customer experience designed to exceed expectations, uniform vehicle prices among dealers, and affordable maintenance costs.

The luxury automotive segment has experienced very high growth in recent years, with most global players represented in the Mexican market and dominated locally by German manufacturers such as BMW, Mercedes Benz and Audi. The establishment of these luxury brands has created additional challenges for the non-luxury segments that sometimes find themselves competing for the same consumer at similar price points.

Although Mexican automotive consumers may have had an emotional connection to the five brands that won their hearts over the course of the years, from a pragmatic perspective, the offering of these new alternatives has attracted their attention and challenged the long established brands.

Other important changes have also affected the industry, such as the transformation of the purchase decision-making process, which is heavily influenced by the digital world. Best practices now include differentiated facilities designed with the customer in mind, specially created sales and service processes that deliver an added value experience, and the deployment of ever-more original marketing and PR efforts.

Automotive brands have recognized that it is not enough to merely offer a vehicle; they must also deliver an ongoing customer experience that exceeds all previous expectations. Only by doing so can they compete in the battle to win – and retain – the hearts and minds of the Mexican consumer.

Capturing the hearts and minds of the

Mexican consumerImportant global players from all continents are increasingly attracted by Mexico’s market potential. Every day new brands are introduced; this gives consumers plenty of choice, but also makes it harder for each brand to establish an emotional bond with their potential consumer.

rony jErusalmi Managing Director, Goldfarb Consultants

The cultural and socio-economic variations across the population have resulted in a market with a variety of targeted brands. But this choice, added to the impact of the global economic crisis, has made the Mexican consumer more demanding and more deliberate in their thinking than ever. As a result, brands have to exceed customer expectations in all aspects, from customer service to value for money.

One of the most illuminating examples of these changes in the current Mexican Market is seen in the Automotive Industry. There is a great potential for growth in this sector since car ownership penetration is still lower than in other similar markets. Twenty years ago, there were only five brands on offer in the local market (Ford, GM, Chrysler, VW and Nissan), but with the change of manufacturing regulations and several free trade agreements with other nations, today almost all global automotive brands are available, providing consumers with more than 35 brand options and over 300 model alternatives. As a consequence, the Mexican


51

The outlook for Peru in 2013 points to maintenance of economic growth, with a 5.7% CAGR over the past four years (the highest in the region); forecasts of about the same rate are triggered by increased investments in sectors such as mining and construction and by the growth of private consumption. The country has been growing steadily since 2003, and despite a sudden drop in 2009, managed to regain growth in 2010, with a slight decline since then. The current economic model aims to make the country attractive for investors. The government declared 2013 as the year of investment in rural development, seeking to expand its agricultural frontiers, develop technologies and strengthen productive capacities, adding value to rural production. The signing of a free trade agreement between the European Union, Colombia and Peru in August 2013 was aimed at improving conditions and stability to ensure trade and investments between the European Union and the Andean region.

The growth of the country and its middle class presents some particular issues. These include the efforts of local brands to gain strength against multinationals and to expand their presence internationally; the diversified consumer profiles among the cities; the growth of the provinces; and the importance of public opinion in consumer habits. Brands in both the retail and banking segments have gained strength and relevance.

The risks involved in this investment portfolio are related to current social conflicts and delays in exploration licenses, particularly in the mining and energy areas. Despite the fact that unemployment rates have shown stability with just slight drops, not all of the population has benefited from the economic growth. The government has declared its intention to correct errors and to combat corruption and crime in the country, as well as its desire to establish a healthy relationship for business, attracting foreign investment – the rate of which has been growing annually since 2003.

A diverse population offers great potential for development


Capital City LimaCurrency New SolArea 1.29 million km2



peru key fACTsperu key fACTs

pERu




peru

inTerCiTy diVersiTyBesides the three strips, (the Coast, the Andes and the Jungle) huge differences are to be seen in the consumption habits among the various cities of this country (together with a certain homogeneity within each of them). Thus, you could conclude that for many categories, the leading actor in one city could be simply irrelevant in a nearby city.

The conducting of continual brand surveys in nearly 20 different cities may be a key to success for companies which do not think of Latin America as a country (with Buenos Aires or Mexico City as its capital) or of Peru as an ‘extension’ of Lima.

The speed of ChAnges in BehAVior And The iMporTAnCe of ‘word of MouTh’Even in the past, you would see sudden changes in the market share of some categories where the main driver was a word-of-mouth rumor: “It’s not good anymore” or “It seems they changed its flavor” are phrases that could generate significant behaviorial changes that were very hard to reverse. This, in a market that is adapting rapidly to digital processes and virtual social networks, is an increasingly important factor.

The MiLLenniALs in peruBecause the economic resurgence happened when today’s youngsters were just babies, the generation gap appears to be even greater. For the first time, Peru faces a transversal generational phenomenon. Young people with a ‘millennial’ attitude have grown up in a society that, despite still being poor, has grown continuously – and this has happened in a context where parents raise their kids trying to forget the past. The effects of this social revolution are just beginning to be seen.

The new sourCe of eConoMiC growTh in peruAlthough the local economy is not growing as quickly as in the previous decade, it remains healthy. A couple of years ago, this growth started to be noticeable in the provinces. Now it is the turn of Arequipa, Huancayo, Trujillo and Piura (among others) and it is clear that consumers in these cities are quite different in regard to their behaviors, values and, a lot of the time, their choice of brands.

What should brands do to engage with such a diverse consumer? What should they do in this era of evolution, as we face the challenge of the digitalization of brand communications? These perhaps are the key questions marketing will have to answer in order to keep brands growing in this society.

A particular Multiverse (The expression of the peruvian identity)Nowadays, the huge economic growth that Peru has experienced during the last 15 years is not really the subject of debate. Nor is the re-appearance of a middle class, (which almost disappeared during the last part of the twentieth century), much of a talking point these days. However, here we examine a number of other, more recent developments – economic, behavioral and sociological – that are currently impacting upon brands in Peru.

mr. Claudio orTiz Managing Director of Millward Brown Peru

The suCCessfuL ‘defense’ of soMe LoCAL CoMpAniesThere are many examples of local companies that have managed to maintain a strong position in the local market (despite the presence of some global giants), and are also becoming global themselves.

This raises the question of why the ‘giants’ themselves have not been as successful in this market as in the rest of the countries of this region. The answer is that the Peruvian product breaks through by being supported by local consumers (loyal to the local product) and by globalization; it has its own models, which are now becoming successful abroad.


peru

Peruvian brands make their debut in the BrandZ™ Top 50 Most Valuable Latin American Brand Ranking 2013, adding up to US$ 6.4 billion. The financial institution BCP is the most valuable brand in Peru, with US$ 1.6 billion, followed by Cristal, a beer brand, which accounts for US$ 1.4 billion.


Insurance 5%

Soft Drinks 9%

Beer 44%

# Brand


Contribution Index

Brand Value

Change 2012-20132012 2013

1 - 1,636 2 NeW


2 - 1,401 5 NeW

Beer

3- 1,095 2 NeW


4 - 899 5 NeW

Beer

5 - 571 5 NeW

Soft Drinks

6 - 528 5 NeW

Beer

7 - 301 4 NeW

Insurance

The first and oldest bank in the country, as well as the largest, it was established in 1889 under the name Banco Italiano, changing its title to the current one in 1942. The organization has grown and diversified its operations and today has branches in Nassau and New York. The expansion resulted in the creation of other subsidiaries, such as Credifondo (mutual funds) and Credileasing (financial leases). It offers a full portfolio of bank services to individuals, small businesses and companies, including credit services, insurance, finance and investment.

Peru’s most valuable brand

BrandZ™ Top 7 Most Valuable peruvian Brands 2013

®



The new peruvian consumers: changing habits in an emerging economyFidel a. la riva Cruz Country Manager, Kantar Worldpanel Perú

In recent years, the Peruvian economy has experienced a period of prosperity, the like of which its citizens have not enjoyed for at least sixty years. The main factors underpinning this boomtime are: increased value of minerals such as copper, zinc and tin – all key commodities exported by Peru; the development of more (and huge) mining projects especially in the interior of the country; and the export of non-traditional agricultural products, mainly to markets such as Europe and America. These developments have seen the Peruvian GDP double in the last 12 years, and extreme poverty reduced by 50%, according to the Peruvian Ministry of Economy and Finance.

The improvement in the economic situation has also brought about changes in shopping habits and how the average Peruvian consumes. Households now purchase categories that a few years ago it would have been unthinkable to find in the Peruvian’s basket, such as fabric softeners, light or diet products, and packaged foods. Year by year, consumption of these goods accounts for an increasing market share; nowadays it is about 20% of the Peruvians household expenditure. (It is worth noting that Peruvian housewives have always bought ‘little and often’ and principally through traditional channels – market stalls and local little shops call ‘bodegas’. This is due to the informality that exists in the Peruvian labor market, which means that many families receive their wages daily or weekly, which directly influences buying patterns.

It’s not only the consumer goods market that has been boosted in the last 10 years; the market for new cars has risen from around 40,000 sales in 2003 to over 190,000 in 2012, with young and middle-class Peruvians fueling the dynamism of this sector. The construction sector has also performed robustly, growing at an average rate of 12% in the last ten years, with over 100,000 mortgage loans arranged for the purchase of private homes. Peruvians have traveled more during the last decade too; but whereas in the 80’s and 90 ‘s most of their travel abroad was to seek work and development opportunities, now they travel for pleasure. As a result, the outbound tourism sector of Peru has grown by about 30 % in the past ten years.

However, the population is aware that these boom years have failed to solve some of the structural problems of the Peruvian economy. These include an insufficiency of formal job creation, and the heavy reliance on the mining sector making the economy vulnerable to changes in international prices for minerals. So, there remains a lot to be done, but Peruvians perceive that their economy is still in gestation and anticipate many more years of prosperity, both culturally and economically. They consider Peru to be very much a developing nation, not a third world country.

peruViAn BrAnd VALue



BrandZ™ Top 50 Most Valuable Latin American Brands 2013 BrandZ™ Top 50 Most Valuable Latin American Brands 201356

MeThodoLogy

Brand Valuation

The BrandAnalytics approach to brand valuation is based on a brand’s economic impact—for example, its ability to generate long-term earnings for shareholders and sustained demand among customers.

This approach is consistent with the methodology used by Millward Brown Optimor for its BrandZTM Top 100 Most Valuable Global Brands and related studies. BrandZTM is the only valuation that peels away all of the financial and other component factors of brand value and gets to the core—how much brand alone contributes.

BrandZTM valuation starts with the corporation. In some cases, a corporation only owns one brand. Therefore, all corporate earnings come from the brand. In other cases, a corporation owns many brands. Therefore, we need to apportion the earnings of the corporation across a wide portfolio of brands.

In collaboration with Millward Brown Optimor, BrandAnalytics, Brazil’s leading brand valuation and strategy consultancy, provided brand analysis and valuation for this BrandZTM Top 50 Most Valuable Latin American Brands report.

sTep 1: CALCuLATing BrAnded eArningsTo make sure we apply the relevant portion of Corporate Earnings to the brand we first obtain financial information from annual reports and other sources, such as Kantar Worldpanel.

Then, by multiplying Corporate Earnings by a metric called the Attribution Rate we arrive at Branded Earnings. Branded Earnings refers to the amount of earnings attributed to a particular brand. If the Attribution Rate of a brand is 50 percent, for example, then half the Corporate Earnings are identified as coming from that brand.

sTep 1: CALCuLATing BrAnded eArningsTo make sure we apply the relevant portion of Corporate Earnings to the brand we first obtain financial information from annual reports and other sources, such as Kantar Worldpanel.

Then, by multiplying Corporate Earnings by a metric called the Attribution Rate we arrive at Branded Earnings. Branded Earnings refers to the amount of earnings attributed to a particular brand. If the Attribution Rate of a brand is 50 percent, for example, then half the Corporate Earnings are identified as coming from that brand.

sTep 3: deTerMining BrAnd ConTriBuTionWe now have the value of the branded business. But this value is still not quite the core that we are after. To arrive at Brand Value, we need to peel away a few more layers, such as the rational factors that influence the value of the branded business, for example price, convenience, availability and distribution.

Because a brand exists in the mind of the consumer, we have to assess the brand’s uniqueness and its ability to stand out from the crowd, generate desire and cultivate loyalty. We call this unique role played by brand, Brand Contribution.

We have the only brand valuation methodology that obtains this customer viewpoint by conducting worldwide on-going, in-depth quantitative research, online and face-to-face, building up a global picture of brand on a category-by-category and a country-by-country basis. Our research now covers over two million consumers and more than 50,000 brands in over 30 countries.

sTep 4: CALCuLATing BrAnd VALue Now we take the Financial Value and multiply it by Brand Contribution, which is expressed as a percentage of Financial Value. The result is Brand Value, a figure that’s expressed in dollars.

57


rony jerusalmi Managing Director Goldfarb Consultants Mexico

pablo oscar lesulauro CEO Mindshare Argentina

vinicius da silva MD Kantar WorldPanel for Chile, Colombia, Ecuador and Venezuela

Fidel a. la riva Cruz Country Manager Kantar Worldpanel Perú

Gal barradas Partner and CEO F.biz

juan pablo rocha President JWT Colombia

[email protected]

www.mindshareworld.com [email protected]

www.kantarworldpanel.com [email protected]

www.kantarworldpanel.com [email protected]

www.fbiz.com.br [email protected]

www.jwt.com [email protected]

CrediTs

Contributors

Rony has a degree in Industrial Engineering from Universidad Iberoamericana in Mexico City and Marketing and Consumer Intelligence graduate studies from the University of Miami in Coral Gables, FL. He is the Managing Director of Goldfarb Consultants Mexico, a market research based consultancy that provides strategies and solutions to global companies in Mexico and Latin America, in sectors such as Automotive, Technology and Consumer Products.

With more than 18 years of experience in brand research, Rony has helped many Fortune 500 companies to understand the relationship of their brand with its consumers, and to identify effective strategies that can be translated into practical actions.

Pablo has a degree in Administration at Buenos Aires University and originally joined JWTA’s Financial and Administrative Department. In 1992, he created the Research and Media Planning Department, of which he was Director. In 2003, he became Vice President, COO and Managing Partner of Mindshare in Argentina, as well as Regional Director for the Samsung and Gillette accounts. In 2011, Pablo became CEO at Mindshare Argentina. In recent years, he has been Vice President for the Argentine Chamber of Media Agencies (CAAM) and a regular participant on industry judging panels and at global conferences.

After finishing high school in the USA, Vinicius returned to Brazil to study Business at Superior School of Marketing and Advertising in Sao Paulo. His first job was with Nielsen and he opened their Chile office, before moving to Argentina as Commercial and Marketing Director. Vinicius returned to Brazil to be the Commercial Director, leaving in 2002 to start his own commercial, marketing and advertising consultancy. In 2005, he joined LatinPanel (which became Kantar Worldpanel) as General Manager, in Venezuela. In 2008, he moved to Colombia as Managing Director of Kantar Worldpanel for the North Andean Region (Colombia, Ecuador and Venezuela). In 2013, he added Chile to his remit.

Fidel is a Peruvian economist with more than 17 years of professional experience in market research, marketing and business consultancy. He studied and lived in Guadalajara, México for five years. He has a Post Graduated degree in Strategic Marketing in Palermo University of Buenos Aires, Argentina. Fidel has worked as a Business Planning & Analytics Director in Mindshare Perú and Mindshare Argentina, and has taught in many Universities and Educational institutes in Latin America

Gal Barradas majored in business administration, with a postgraduate degree in Semiotics of Advertising Text from the University of Paris 8. Gal is a partner at F.biz and serves as CEO; she is a member of the Executive Committee of the Brazilian Advertising Congress and also a Board member of WPP Latin America.

Gal started her career at DM9 before becoming involved in the first wave of interactive agencies in Brazil, going on to become Director of W/Brasil, AgenciaClick and F/Nazca; she was also Vice President of MPM (ABC’s agency). Gal is a member group of business leaders working to develop the agenda of women leaders.

Juan Pablo holds a BA in Advertising from the Universidad de Bogota, and an MBA from ESMA in Barcelona, Spain. He has been the CEO of JWT Colombia for the past 10 years, with a career of 25 + years working in Colombia, Venezuela, Spain, Mexico and The Dominican Republic. Juan is also involved in the academy at the Sergio Arboleda University in Bogota.


Eduardo Tomiya Managing Director BrandAnalytics South America

andré Galiano Director BrandAnalytics South America

isa Telles Associate BrandAnalytics South America

roberto de napoli Associate BrandAnalytics South America

Carlos dadoorian Consultant BrandAnalytics South America

brandanalytics.com.br [email protected]

www.brandanalytics.com.br [email protected]




CrediTs

Contributors

Eduardo holds a Production Engineer, MA and PHD (ABD) from Poli/USP. The Founder and Managing Director of BrandAnalytics, he runs projects of brand valuation and brand strategy for companies such as Bradesco, Petrobras, Vale, Santander, Fiat, Serasa Experian, O Boticário, and Cosan. Earlier in his career, he was Director of Brand Valuation at Interbrand (2000-2006, Iberia and Latin America) and Managing Partner of Corporate Finance at Trevisan (1995-2000). Eduardo also teaches branding on post-graduate courses.

André is a graduate in Social Communication from USP; a post-graduate in Administration from FGV/SP, and specialized in Finances at University of California. A Director at BrandAnalytics, André runs projects in Brazil and Latin America for clients including Petrobras, Bradesco, Vale, Fiat, Serasa Experian, Boticário, UNE, Repsol YPF, Nextel. Prior to joining BrandAnalytics he was Senior Consultant at Interbrand (2002-2006) and Consultant at TMP Worldwide and Amcham. He also teaches post-graduate branding courses.

Isa graduated in Design at Mackenzie, did a post-graduate in Communication Processes at ECA/USP, and specialized in Marketing and Branding at ESPM and School of Visual Arts, NY. She has more than 15 years of experience in projects of brand strategy projects (branding). Earlier in her career she worked in branding companies Cauduro and CollectiveMind ( J.W.Thompson), and on projects in partnership with Lippincott, such as Banco Real, Vale and Petrobras. Isa teaches branding courses in Brazil.

Roberto studied Economics at Mackenzie, and has a post-graduate in Financial Administration from FAAP. He has more than 28 years of professional experience in controlling and planning for companies such as Inbrac, Ibrame, Trevisan Consultants and Interbrand. With BrandAnalytics since the beginning, Roberto is responsible for the brand valuation projects and for the ranking of Brazilian Most Valuable Brands: 2006-2013.

Carlos’ qualifications include Statistics by ENCE and a Masters in Statistics from Unicamp. Prior to joining BrandAnalytics, he was Account Director at Enfoque Pesquisas, working with clients in the financial sector (Amex, Santander, Itaú), and as Quality Control and Statistics Director for Latin America at IMS Health. At Cambuhy Citrus, he was an ISO 9002 system auditor.


martín schijvarg Account Director Millward Brown Argentina

aurora yasuda Knowledge Management Millward Brown Brazil

Gabriel Castellanos CEO Millward Brown Andean Region

Claudio ortiz Caruti Managing Director MillwardBrown Perú

Fernando alvarez Kuri Director Millward Brown Optimor

marcela pérez de arce Client Service Director Millward Brown Chile

www.millwardbrown.com [email protected]

millwardbrown.com [email protected]





CrediTs

Contributors

A Bachelor of Business Administration, and postgraduate in Marketing, University of Buenos Aires, Martín has 10-years experience in market research in Millward Brown. His area of expertise is the analysis of the influence marketing actions can have on brand’s health. Martin provides analysis for markets such as Argentina, Uruguay, Paraguay, Peru, Chile, Brazil, Bolivia, Colombia and Mexico. Within Millward Brown, he has worked on a variety of sectors and was in charge of the BrandZTM Top 50 Latin America Brands 2012 event.

A graduate in Social Sciences from FFCL/USP, Aurora has been working in market research for more than 40 years and was responsible for starting the Millward Brown business in Brazil. A co-ordinator and teacher of market intelligence post -graduate courses at ESPM until 2011, she also published Marketing Research – um guia para a prática da pesquisa de mercado” Editora Cengage, co-authored with Diva Maria Tammaro de Oliveira.

Gabriel has more than 17 years of experience of the challenges facing both global and local brands. Throughout his career, he has worked extensively both in qualitative and quantitative research specializing in brand building, trade research and communications strategy. Prior to joining Millward Brown, Gabriel held various positions in areas such as research, brand management, trade management and corporate affairs.

Claudio studied as a Psychologist at Universidad de Chile and did a Business Management Degree at UAI. He has over 20 years experience in market research, both as a client and consultant, in Chile and Peru. He helped establish the first Millward Brown office in Chile and, after some years working at Nestlé Chile, returned to the company. He is now managing the Peruvian office.

Fernando has a MSc in Consumer Studies from the University of Guelph, Canada and a BA with Honors in Management from ITAM, Mexico. He has specific expertise in brand and marketing strategy, consumer psychology and brand communications. With more than 20 years of experience in the consumer and service industries, he has been involved with multiple regional and global clients within the Millward Brown family of companies for nine years. He is head lecturer in consumer behavior, brand strategy, market research and communication strategy at different graduate programs within top business schools in Mexico, and is a guest speaker at numerous conferences and forums (IAB, ITESM) on consumer related topics.

Having graduated in sociology from Universidad de Chile, Marcela has worked in social research in gender and education at FLACSO Chile, participating in several projects and publications. Since 1997, she has been dedicated to market research, working in Time Research (now TNS Chile) and Feedback, a consulting agency. She joined Millward Brown Chile in 2001, assuming the direction of the Quantitative Area in 2009.



CrediTs

with Thanks

BrandAnalytics BrandZTM

BrandAnalytics, a leading brand strategy consultancy in Brazil, produced the brand valuations and analysis for this BrandZTM Top 50 Most Valuable Latin American Brands report, in collaboration with Millward Brown Optimor.

BrandAnalytics is a Division of Millward Brown Optimor in South America. BrandAnalytics provides expert analytical and quantitative support for branding programs. It focuses on brand valuation/scorecards, brand strategy and ROI. By combining thorough analytics with an understanding of financial, marketing and strategic issues of the business, BrandAnalytics produces evidence-based branding recommendations that are linked to shareholder value generation.

BrandZTM is the world’s largest brand equity database. Created in 1998 and continually updated, BrandZTM is an invaluable resource, containing data on brands gathered from interviews with over two million consumers in 41 countries and covering more than 200 different categories. Calculations use financial data from sources including Kantar Worldpanel and Bloomberg.

For further information, please contact:

Eduardo TomiyaManaging Directorwww.brandanalytics.com.br

For further information about BrandZTM, please contact:

Graham sTaplEhursTGlobal BrandZTM [email protected]

robin hEadlEEVice President Millward Brown [email protected]

david roth CEO, The Store WPP

Tamsin Grant Wordscout

mónica Gojman WPP Fellow, WPP

Carolyn Cummings-osmond MA Coordinator & Senior Lecturer Southampton Solent University

projeCT MAnAgeMenT amanda harrison The Store WPP

produCTion Kay blewett Bauernhaus Creative

iLLusTrATions ninhol www.ninhol.com

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