Best Canadian Brands A Ranking by Brand Value July

Best Canadian Brands 2006 A Ranking by Brand Value July 2006 Best Canadian Brands 2006 In co-operation with the Globe and Mail’s Report on Business, Interbrand is pleased to present our first annual ranking of the Best Canadian Brands by brand value. We firmly believe that brands are economic assets and must be managed as such. That is what makes our approach valuable and an informative business and brand management tool. For six consecutive years, Interbrand has ranked the Best Global Brands in partnership with BusinessWeek magazine. Our proprietary brand valuation methodology is employed to arrive at the top 100 global brands and, in this study, the top 25 Canadian brands. In fact, PRWeek magazine produced a study that showed the BusinessWeek/ Interbrand Best Global Brands ranking was the third-most soughtafter benchmark report by CEOs. This is recognition of the power of brands and the growing focus on the contribution brands make to bottom-line performance. This country-specific study for Canada uses the same methodologies as the Best Global Brands ranking. Our process allows us to establish the brand as a financial asset that creates significant shareholder value. As branding experts, we commend the companies that have managed to create and sustain strong brands in today’s competitive market. It should be noted that this is not a ranking of Canada’s most popular brands but, rather, of those brands that have generated the greatest economic return for their owners. As well, our criteria for selection (see p. 10) have excluded some obvious local brands that are conspicuous by their absence (e.g., Roots could not be considered since, as a private company, it does not publicly disclose financial data). While there are always lessons to be learned for Canadian businesses on investing in and managing their brands for value creation, we congratulate the companies on the list for their effective stewardship of this important corporate asset. Sincerely, Bev W. Tudhope Chief Executive Interbrand Canada Inc. Interbrand’s Best Canadian Brands 20 06 2 Table of Contents PAGE 1. 2. . 4. 5. 6. 7. The State of Branding in Canada Why the Ranking is Important The Interbrand Method for Valuing Brands Best Canadian Brands 2006 Brand Commentary Insights and Trends Contacts and Additional Information 4 9 10 12 13 18 19 Appendices 8. 9. Frequently Asked Questions Interbrand 20 24 Interbrand’s Best Canadian Brands 20 06  1. The State of Branding in Canada In Interbrand’s annual ranking of the Best Global Brands, there has never been a Canadian brand. This absence is revealing. In the latest global ranking, just over half of the brands are from the US, with the rest from other countries and none from Canada. The US may dominate the global brand ranking but that does not mean they will continue to – no one has a monopoly on the practices that contribute to a great brand. Canadian brands can be successful at home and abroad. They can provide superior economic returns and significant advantage. CANADIAN CHAR AC TER AND PR AC TICE Canada suffers from a branch-plant economy (and mindset) where brand decisions are often made somewhere else. This has had an impact on brand skill development and led to a migration of marketing and branding talent out of Canada. These and other reasons have resulted in a drought of recognizable Canadian brands globally. And it has nothing to do with size or sophistication. South Koreans take pride in the performance of Samsung, LG, and Hyundai as they move nation to nation. Chinese brands are making significant entrées into the western world, simultaneously introducing their low-price/high-quality offerings while buying up long-established brands like IBM’s personal computers. Yet, Canadian brands remain largely unknown. It is an incredibly fast-paced and fluid set of factors that are rapidly making Canadian brands irrelevant due to size, penetration, perception and, arguably, aggressiveness. Canadian companies appear altogether complacent, almost indifferent to the risk and the opportunity of branding. PR AC TICES OF THE BES T GLOBAL BR ANDS Canadians are known to be polite. It is inherent in our culture: we are not chest-thumpers like our directly southern neighbours. This may be to the detriment of how we brand our corporations, products, and services. Successful brands are impassioned; they aspire and inspire. So, if humility is one of our strengths in national personality, it is a weakness in branding. Everything you do defines your brand, from the way your receptionist answers the phone, to how your product is packaged, to the service guarantees you offer, to how you reward employee behaviour. However, we find that many Canadian companies equate branding almost solely with advertising. This is a missed opportunity to create a total brand experience that builds loyalty and secures future earnings. Branding is not a logo, not a brochure, it is a company’s unique way of doing business. Interbrand has identified a consistent set of attributes shared by successful global brands that should be considered by Canadian brands: Recognition Well-performing brands enjoy strong awareness among consumers and opinion leaders. These brands lead their industry or industries. Think BMW. Car aficionados, reviewers, and loyal customers laud it with equal enthusiasm. Recognition represents the nexus of perception and reality, enabling brands to rapidly establish credibility in new markets. Interbrand’s Best Canadian Brands 20 06 4 1. The State of Branding in Canada Consistency Best brands achieve a high degree of consistency in visual, verbal, auditory, and tactile identity across geographies. They deliver a consistent customer experience worldwide, often supported by an integrated, global marketing effort. McDonald’s is a tremendous example of a brand that has returned to its roots by shedding distracting acquisitions, simplifying the core offer, and adhering to a shared message globally. At the same time, McDonald’s appropriately fine-tunes its approaches for greater regional relevance. Emotion A brand is not a brand unless it competes along emotional dimensions. It must symbolize a promise that people believe it can deliver and one they desire to be part of. This allows brands to achieve the loyalty of consumers by tapping into human values and aspirations that cut across cultural differences. Nike has appealed to the athlete in all, regardless of true physical ability, allowing for a focused, yet mass-market offer. Uniqueness Great brands represent great ideas. These brands express the uniqueness of position to all internal and external audiences. They effectively utilize all elements in the communications mix to position within and across international markets. Apple has creatively addressed its marketing mix while ensuring its people embody its most ownable and beneficial brand attribute, innovation. Adaptability A global brand must respect local needs, wants, and tastes. These brands adapt to the local marketplace while fulfilling a global mission. HSBC has invested in that very message by conveying its excellence in financial services with its deep knowledge of local custom and practice. In essence, it is communicating a “glocal” advantage. Management The organization’s senior leadership must champion the brand, ideally with the CEO leading the initiative. A leader’s continual articulation of the brand philosophy and the brand’s view of the world is meant to give the business strategy a recognizable face. The commitment is crucial, allowing for a unique positioning that transcends local idiosyncrasies and that appeals to a universal aspect of human nature and experience. This is a major step in ensuring that the corporate culture will put the brand at the heart of everything it does. Measurement In order to sustain a global brand, there must be a consistent measurement. This helps apply best practice and allows for monitoring appropriate global consistency. Measures should include awareness, overall opinion (preference, satisfaction, loyalty, recommendation), brand image attributes, perceptions of product/service performance, and brand valuation to determine financial contribution. The above attributes are important management considerations for all Canadian brand owners. POSITIVE CANADIAN BR ANDING PR AC TICES It is instructive to explore a hypothetical situation: a Canadian consumer happens upon an intersection with each of the four corners occupied by one of the following coffee shops: Tim Hortons, Starbucks, Second Cup and Timothy’s. Assuming that the desired beverage is the same price at each, what brand would the consumer visit and why? This is exactly where Canadian business leadership, brand owners, and brand managers must spend their time. Interbrand has observed that well-performing Canadian brands share home-grown practices that have served them well. These include: • A deep understanding of the consumer and an investment in segmentation. This ensures the brand experience is tailored to individual wants and needs. • Communication of the importance and commitment to community support. The Bay and Zellers missed an opportunity that Wal-Mart capitalized on through its telling of Canadian stories. In communicating Canada’s role in history, introducing real Canadian shoppers in advertising, and by funding grassroots programs, Wal-Mart more rapidly entrenched itself in the country. Interbrand’s Best Canadian Brands 20 06 5 1. The State of Branding in Canada • Making honest efforts to communicate “Canada.” Canadian Tire communicates Canada through nostalgia messaging highlighting its deep ties and contribution. Roots has mastered this in a visual sense through their casual clothing and personality. Tim Hortons has picked up on this as well, having featured the Canadian Forces and students abroad in their national advertising. • A lack of pretentiousness that mirrors the Canadian personality. These brands are not in-your-face: they operate under the radar and yet are everywhere. Polite, almost deferential brands do well in Canada but do not translate well to other countries. • Making due with less. The more companies spend on communications, the less they seem to communicate. Communications are frequently uncoordinated and fragmented, lacking clarity and often delivering conflicting messages. This is not the case for the majority of Canadian brands that have the additional challenge of having relatively small marketing and communications budgets. Canadian companies that understand the power of branding have become masters at making the most of little. The foregoing attributes are less relevant for Canadian brands hoping to compete globally. THE CANADIAN BR AND CHALLENGE • “Branch-plant” marketing is in evidence whereby Canadian marketers are primarily adjusting foreign brands for regional relevance. • There has been a failure to capitalize on a clear track record of product and service innovation. • The post-secondary education system has not developed uniquely Canadian curricula that prepare future business leaders to focus on intangible value and brand development and management. • An overall lack of investment in branding practice causes Canada to be reactive rather than a leader in effective marketing communications. There is a definite need to change this situation and to place Canadian brands in the appropriate competitive context. T H E C A N A D I A N B R A N D A G E N DA What follows is the Canadian Brand Agenda, a six-step plan for the country to be competitive and sophisticated in branding. Step 1 – Bold Goals from Government There is a great need for firmer business goal setting at the federal and provincial levels of government. Discussion on innovation and research and development are sounding hollow without very clear goals, supporting policies, and meaningful investment. TD Economics’ October, 2005, report on the Canadian economy stated, “Canada’s underachievement, relative to other industrialized economies, has been remarkable.” What is required is aggressive goal-setting. Consider the policy objective set by the Chinese government as an example. They’re executing a “go global” initiative with US$15 billion set aside for the acquisition of leading companies and brands. This is enlightened policy and extremely progressive for any nation. Economist David Wall of Chatham House believes that by 2025, Chinese investors could own two-dozen of the Fortune 500 companies. Of course, Canada operates under an entirely different political and economic system. However, imagine the results of the federal government stating that by 2015, Canada will have the leading businesses/ brands in three to five key industries! Canadian brands face significant challenges domestically and globally. Interbrand has recognized many troubling facts regarding brand building in Canada: • Brand management complacency is making Canadian brands irrelevant due to size, penetration, perception and, arguably, aggressiveness. • Canadian brands have not articulated what it means to be Canadian, so they have not created a universal appeal for those attributes and values. • A lack of investment in branding education and practice has meant that Canada suffers from a follower mentality, leaving brand leadership to companies from other nations. • Canada’s image – what it is and what it could be – is widely debated but remains largely unarticulated. • The Canadian character does not lend itself to bold communications. • The country’s resource economy has impaired Canadian marketers from competing on intangibles. Interbrand’s Best Canadian Brands 20 06 6 1. The State of Branding in Canada Samsung surpassed Sony for the first time in Interbrand’s 2005 annual Best Global Brand study. Samsung is ranked 20, with a brand value of US$14.9 billion, while Sony is ranked 28, with a brand value of US$10.8 billion. Step  – More RIMs and Tims Look at a successful company and there will once have been a stubborn, gifted, visionary entrepreneur. Marketing visionary David Ogilvy has said, “The best leaders are apt to be found among those who have a strong component of unorthodoxy in their characters. Instead of resisting innovation, they symbolize it.” Simply stated, Canada needs many more entrepreneurs who personify innovation and risk. Our neighbours to the south are extremely entrepreneurial. This requires taking chances, falling down, getting back up again, not giving in and not giving up. Canadian character and opinion do not always embrace the bold. We are proud of our accomplishments as a people. We are less inclined to support the maverick. We appear to have a culture that believes if one is successful, it comes at the expense of everyone else. Mavericks tend to find out Canadians are interested in their endeavors only when they suffer setbacks. Canada has a decent track record of success stories. But we need more RIMs and Tims. We need those unorthodox characters who see the world differently, who doggedly pursue new opportunities and unmet needs. We need them to stay in Canada and accomplish their goals here. And we need to rally behind them, as their success is success for us all. This will help ensure that more businesses and brands are born, so that a fair proportion will stand the chance of sustained success. Step 4 – Teach and Train There is no such thing as a purely Canadian curriculum in business. Entrepreneurialism, innovation, and sound business practices must be taught and encouraged throughout a Canadian’s education. Postsecondary institutions in Canada must construct uniquely Canadian curricula in business and branding. They are well-positioned to help define what differentiates Canada and Canadian business, what makes them relevant, and what ensures their credibility. Currently, business schools in Canada use the case-study method, with the majority of cases originating from somewhere else in the world (largely the US). This has resulted in talented people receiving the message that Canada is not the place to be challenged, excel and prosper. Universities must not only teach process but must also guide the talent to areas of opportunity unique to Canadians. Success in business, and branding, is not an overnight proposition and this type of horizon is appropriate. Yet, it would take long-term tangible support from government to focus on key industries and to support Canadian contenders. This does not assume a safety net of grants and subsidies but, rather, investment based on business cases that are rational, aggressive, yet achievable. It also requires strategic alignment with leaders in Canadian business. Step 2 – Bold Goals from Business The Canadian economy is largely resource-based, with some very interesting pockets of innovation in technology, sciences, and service industries. Our resources will always be a source of wealth and economic strength, but they must be balanced with building better – or new – mousetraps. In this century, India and China will dominate the productivity dimension of business, due to sheer manpower. Canada is at risk of being harvested for its natural wealth and then laid fallow. Canadian business leaders must recognize the need to move fast and far in innovation, research and development, and brand building. A lesson can be learned from South Korea’s Samsung. It has become a global brand leader by making some courageous decisions in the last decade. The company found themselves caught in a difficult market position: they had a wide-ranging product portfolio that was priced too high to compete with “no names” and they lacked the product quality and brand reputation to compete in the high-end segment. Their response was to increase margins by moving into premium brand positioning in all markets, while rationalizing their product portfolio through dropping undifferentiated and unprofitable brands. The most important decision was re-investing in research and development, design, and brand. Jong Yong Yun, Vice Chairman and CEO of Samsung, says, “Competing successfully in the 21st century will require more than just outstanding product and quality functions. Intangibles such as corporate image and brand image will be crucial factors for achieving a competitive edge.” Interbrand’s Best Canadian Brands 20 06 7 1. The State of Branding in Canada Canadian companies must continuously invest in the education of their people, reinforcing the principles of business and brand management that will help them compete domestically and globally. Step 5 – A Canadian Brand of Branding Branding in Canada remains somewhat unsophisticated. Rudimentary principles are in place but, too often, it is still equated with advertising or similar short-term communication initiatives. Top branding and marketing talent in the country is scarce and many in these functions are largely serving as “communication branch-plants” for multi-nationals who have a presence in Canada. One client has complained, “The lion’s share of our time is spent fitting French onto the packaging and advertising that has been decided elsewhere. We could be offering incredible value in segmentation, positioning and strategy, but the perception is that Canada is a secondary market, and that all people make purchase decisions in the same way.” Canadian business leadership needs to understand the value found in intangibles. The past 30 years have seen a reversal in the primary source of enterprise value. Throughout most of the 20th century, commercial enterprises knew that tangible assets were the prime repository of value and that guided investment decisions. With the coming of the 21st century, intangible assets became the dominant source of value. Fortune Magazine reported that, in 1978, the Dow Jones Industrial Market Capitalization had 95% of the value attributed to tangibles. By 2001, 72% of the value was attributable to intangibles, with roughly 30% of that being brand value. Business leaders must recognize the sources of wealth within their own companies. Jim Stengel, Chief Marketing Officer of Procter & Gamble, says, “Marketing is a $450 billion industry, but we are making decisions with less data and discipline than we apply to $100,000 decisions in other aspects of our business.” To be clear, executives are close to flying blind in brand decision-making. Canadian business leaders must grasp the value equation and develop and implement branding practices that create and manage intangible value. Step 6 – Brand Canada There is robust evidence that successfully branded companies are identified with their country of origin. If a consumer in another part of the world was weighing the pros and cons of a purchase decision and most of the factors resulted in parity (quality, cost, convenience) – they may consider the nationality of the brand. Perhaps there are three contenders – one Canadian, one American, and one Swiss. How would the perception of Canada stack up against these two other nations? Canada has historically invested in branding but from a tourism perspective. Less has been spent holistically defining Canada as a brand: who we are and what we stand for. Having this “umbrella,” or master brand, would provide greater context to the goods and services Canadian businesses produce. “Brand Canada” would act as a sorting device in the purchase decision, allowing Canadian goods and services a greater chance of success. It’s time Canada articulated its beneficial differences to a world that largely has a kind disposition towards us but not a consistent and shared understanding. SUMMING UP The Canadian Brand Agenda is no small task because it is no small opportunity. Canada is yet to define how it will compete in this century. With the evidence clearly demonstrating that business value is largely attributable to intangibles and that brand is a significant intangible asset, Canadian enterprise must transition its resourcebased roots into knowledge and innovation. It must embrace branding as a strategic imperative that requires investment, because a brand represents a relationship that creates and secures future earnings by ensuring choice, preference and loyalty. This is a call to action for government, business, entrepreneurs, academics, students, and consumers. Innovation and brand-building must be on the agenda of all. Canada and Canadian enterprise are brands whether deliberately created or by default. The only decision is: will we choose to manage them proactively and strategically, or will we let the market define who and what we are as a nation and what our brands represent? Interbrand’s Best Canadian Brands 20 06 8 2. Why the Ranking is Important SIGNIFICANCE OF THE R ANKING As explored, the state of branding in Canada needs to change. Part of that call to action is this first annual ranking of the Best Canadian Brands, which will put a spotlight on brand performance and its contribution to business performance. The Best Canadian Brands ranking provides a brand value that is a top-line measure of economic performance driven by the brand, stating what the brand is worth overall and among competitors. Brand value brings to marketing what “revenue goals” or “financial hurdle rates” bring to other aspects of business. The payoff comes when one looks behind the number – a single number only tells you so much. It’s important to understand what drives brand value: intangible earnings (the cash flow of a business not associated with such tangible assets as equipment or materials), the role of brand (a measure of how much brand influences purchasing decisions), and brand strength (a benchmark of a brand’s relative risk compared to competitors). Understanding the drivers of brand value can inform management action, from overall business strategy to specific marketing tactics. It’s an easy-to-understand metric to help brand owners determine where they are, where they are going, and how to get there. It will help make branding a more important aspect of Canadian business management. It tells you whether you are investing adequately in your brand. Putting an economic value on a brand (overall and by segment) can help make a strong business case for marketing investments, overall and across the portfolio. It tells you whether you have a marketing strategy that positions your brand around the right messages. Your customers make decisions every day between you and your competitors. Analyzing the role of brand in those decisions helps you to focus your strategy on the attributes that differentiate your brand from others and to strengthen your relationship with your best customers, ensuring future earnings. It tells you whether you have the right short-term tactics to drive value. By analyzing the strength of your brand, you can target marketing campaigns to the most valuable customers, and against your most formidable competitors, to drive short-term sales. There will be many “take-aways” from this ranking, but there is one primary message: brands are important assets requiring proactive and consistent investment, management, and measurement. Interbrand’s Best Canadian Brands 20 06 9 3. The Interbrand Method for Valuing Brands C R I T E R I A F O R C O N S I D E R AT I O N ME THODOLOGY Using the 2005 edition of the Report on Business Top 1000 list of the largest publicly traded Canadian corporations, Interbrand formed a consideration set of brands owned and operating in the country. All were subject to the following criteria: • Must be a publicly traded company • Must have at least 65% of revenues within Canada • Must be a market-facing brand (holding companies were excluded) • Economic Value Added (EVA) must be positive Wholly owned or local subsidiaries of global brands, for example, Shell Canada or Pepsi Canada, were excluded on the basis that their value is not truly rooted in Canada. The Interbrand method for valuing brands is a proven, straightforward and meaningful formula that examines brands through the lens of financial strength, importance in driving consumer selection, and the likelihood of ongoing branded revenue. Our method evaluates brands much like analysts would value any other asset: on the basis of how much they’re likely to earn in the future. There are three core components to our proprietary method: Financial Analysis Our approach to valuation starts by forecasting the current and future revenue specifically attributable to the branded products. The cost of doing business (operating costs, taxes) and intangibles, such as patents and management strength, are subtracted to assess what portion of those earnings is directly attributable to the brand. All financial analysis for the Best Canadian Brands 2006 is based on publicly available company information. Interbrand culls from a range of analyst reports to build a consensus estimate for financial reporting. Interbrand’s Best Canadian Brands 20 06 10 . The Interbrand Method for Valuing Brands Role of Brand Analysis A measure of how the brand influences customer demand at the point of purchase is applied to the intangible earnings to arrive at Branded Earnings. For this ranking, industry benchmark analysis for the role brand plays in driving customer demand is derived from Interbrand’s database of more than 4,000 prior valuations conducted over the course of 30 years. In-market research is used to establish individual brand scores against our industry benchmarks. Brand Strength Score This is a benchmark of the brand’s ability to secure ongoing customer demand (loyalty, repurchase and retention) and thus sustain future earnings, translating branded earnings into net present value. This assessment is a structured way of determining the specific risk to the strength of the brand. We compare the brand against common factors of brand strength, such as market position, customer franchise, image, and support. Financial Analysis Forecasted current and future revenue specifically attributable to the brand. Brand Value Calculations Role of Brand Analysis A measure of how the brand influences customer demand at the point of purchase. Branded Revenues Intangible Earnings Brand Earnings Year 1 Year 2 Year 3 Year 4 Year 5 Role of Brand Analysis Brand Strength Analysis A benchmark of the brand’s ability to secure ongoing customer demand (loyalty, repurchase, retention). Brand Strength Analysis = Discount rate Brand Value Illustrative Interbrand’s Best Canadian Brands 20 06 11 4. Best Canadian Brands 2006 R ANK BR AND SEC TOR 20 06 BR AND VA L U E CAD $ M % O F PA R E N T C O M PA N Y MARKET CAP 1 2  4 5 6 7 8 9 1 0 11 2 1 1 4 1 15 16 17 18 19 20 21 22 2 24 25 RBC Financial Group TD Canada Trust Petro-Canada Bell Shoppers Drug Mart Tim Hortons BMO Financial Group Canadian Tire Scotiabank Telus Molson Husky CIBC Rona Investors Group National Bank of Canada CI Investments Rogers Mackenzie Investments Jean Coutu Mac’s / Couche-Tard Labatt Loblaws Sobeys Suncor Banks/Financial Services Banks/Financial Services Energy Telecom Retail Restaurant Banks/Financial Services Retail Banks/Financial Services Telecom Beverages Energy Banks/Financial Services Retail Banks/Financial Services Banks/Financial Services Banks/Financial Services Telecom Banks/Financial Services Retail Retail Beverages Retail Retail Energy 3,989.6 3,167.9 3,064.0 2,914.9 2,830.6 1,878.2 1,854.6 1,634.2 1,378.7 1,079.3 860.9 831.0 727.8 668.9 313.2 298.5 289.0 288.4 199.7 131.6 128.4 107.4 107.0 79.6 51.3 Interbrand’s Best Canadian Brands 20 06 7% 7% 13% 12% 31% 32% 6% 33% 3% 13% N/A 3% 3% 25% 3% 3% 3% 3% 2% 8% 3% N/A 1% 3% 0% 12 5. Brand Commentary RBC FINANCIAL GROUP ( R O YA L B A N K O F C A N A D A ) P E T R O - C A N A DA Canada’s largest financial institution tops the ranking. RBC’s broad, but aligned, product and service set is presented through a clientcentric message. This supports their stated vision of “always earning the right to be our clients’ first choice.” The consistent presentation of their First for You positioning, with the client integrated into the word First, has put a face on RBC’s commitment to innovation and service. Like any large organization, RBC’s challenge is to consistently deliver in line with this positioning – no small feat, given the tens of thousands of transactions and interactions they conduct daily. RBC’s investment in staff training and the reinforcement of their brand values is giving the brand greater traction, and is contributing to enhanced performance across all lines of business. No other business in Canada has done as good a job as PetroCanada in communicating its “Canadian-ness” through its physical locations. Even if you removed their logo and signage, there is no doubt that this is a Canadian brand. In a highly commoditized business, Petro-Canada has focused on solid, reliable service in clean and well-merchandised service stations. Evidence suggests the brand is a big believer in employee training and that has produced a better customer experience. BELL ( B E L L C A N A DA E N T E R P R I S E S ) T D CANADA T RUS T ( TD BANK FINANCIAL GROUP) Although it is a large institution, TD Canada Trust has enjoyed separating itself from the core competition by taking a more “rebel” position within the category. TD Canada Trust was the first to communicate a message of comfort to customers who had been historically intimidated by banks and banking. This has been very well received and the bank has benefitted from clients switching from other institutions while they maintain the loyalty of their existing clients. However, there is evidence that the brand will need to be revitalized now that competitors are using aspects of its original message. There are more and more encouraging signs that Bell is once again getting it. Arguably, years of complacency and confusing products and services have been replaced with a customer-centric strategy. This strategy is simplicity – a desire to make their customer’s life easier and more enjoyable. In order to deliver on this, Bell has had to examine absolutely everything it does and how it has been organized. There are miles to go, but clearly, Bell is prepared for the journey. The brand should benefit through increased relevance to customers who are now more sophisticated and who will not tolerate anything less than excellent customer service. Interbrand’s Best Canadian Brands 20 06 1 5. Brand Commentary CANADIAN TIRE ( C A N A D I A N T I R E C O R P O R AT I O N , L I M I T E D ) SHOPPERS DRUG MAR T ( SHOPPERS DRUG MAR T INC. ) The retail landscape is constantly changing and Shoppers Drug Mart has proactively developed a unique merchandise mix and service model that is difficult to replicate. The fact is, it is many stores in one. Entry draws the consumer through the beauty and personal maintenance section to the fundamental life section and ends with a growing food and staples section. All the time, it employs the standard “pharmacy-at-the-back-so-I-must-consider-everything” layout. Unlike some retail experiences, customers do not feel manipulated in a Shoppers Drug Mart. If they could bottle their brand, you would be able to find it easily in Aisle One. Talk about a strong brand! No matter how bewildering the layout, how tired-looking the retail environment, nor how absent the floor staff – Canadians love Canadian Tire. And increasingly, those once-valid complaints are disappearing. Management has arrived at a sustained détente with franchisees and the result has been significant improvements in floorplans and service. Incredibly, even Wal-Mart has not come between Canadians and their favourite store. Canadian Tire has always been a work-in-progress, and that is part of what has made it successful – it is always searching for a better mousetrap. Unfortunately customers may have to spend some time finding it in the store. SCOTIABANK ( T H E B A N K O F N O VA S C O T I A ) TIM HORTONS ( T D L G R O U P C O R P. ) Tim Hortons sells coffee but it truly produces loyalty. It enjoys far better market penetration than Starbucks. When compared against 2006 Census data, Starbucks has an average of one store per 37,000 people in the US, while Tim Hortons has an impressive one store per 12,000 in Canada. This penetration has helped Tim Hortons to essentially eliminate competition in Canada. This is Canada’s fourth place, after home, work, and the hockey or curling rink. Message to Scotiabank: customers are sophisticated. Giving away plasma televisions seems like a very tiresome update of the stereotypical toaster hook. Canadians know this bank to be an alternative, but that is hardly a long-term brand or business strategy. Scotiabank has spent its brand management time on ensuring the consistency of its visual elements with a clear plan to own red. That is fine, and definitely an aspect of branding, but they are missing a compelling message, and suffer from no ownable service differentiators. Their brand value was 3% of market capitalization versus RBC Financial Group and TD Canada Trust, both at 7%, and it shows. BMO FINANCIAL GROUP (BANK OF MONTREAL) TELUS ( T E L U S C O R P O R AT I O N ) The third financial services entry in the ranking, BMO Financial Group finds itself just now benefiting from greater clarity in its brand awareness and positioning. For too long, it was a brand playing catch-up with leapfrog marketing. BMO Financial Group is now embarking on its own brand program, confident it has the ability to deliver on an invigorated promise of freedom for its customers. Its messages are bolder, more direct and are appealing to those most active with their assets, in an obvious strategy to gain more revenue per customer, rather than just to gain more volume. This segmentation is a gamble, but one required to differentiate it from the other entrenched players. A challenger brand, Telus has focused on clean, clear, and crisp communications and it has been successful. Telecom customers want things to work, want to be able to understand them, and do not want to overpay. Telus knows that and attempts to deliver consistently against that strategy while defining itself as slightly irreverent, yet completely trustworthy and competent. Sometimes this works and sometimes it does not. The goal for Bell, Telus, and Rogers is to actually have customers proudly announce who their telecom company is. Interbrand’s Best Canadian Brands 20 06 14 5. Brand Commentary MOLSON MOLSON ( MOL SON CANADA ) Drip, drip, drip – that is the sound of slowly losing marketshare. Canadians’ passion for their beer brands has been in decline for some time. Loss of innovation, complacency, pricing, and other issues have caused consumers to experiment and patronize the myriad of alternatives that exist. Still, Molson ranks as Canada’s number 11 best brand, and that can be attributed to the equity and goodwill that has been built up over a century of supplying beer and ale from coast to coast. RONA HUSK Y ENERGY ( HUSK Y ENERGY INC. ) From a retail perspective, perhaps stronger in recognition in Western Canada, yet Husky represents a truly Canadian brand. As a strong alternative in a very competitive industry, it differentiates itself on a reliable retail network catering to truckers, businesses, and consumers. The company has almost $16 billion in assets and employs approximately 4,000 employees. Its share price has increased by 474 percent since 2000. Its retail brand is friendly and embedded in the community through sponsorship of the Canadian Alpine Ski Team. This is taken from RONA’s website: “The RONA mission is to offer North American consumers the very best in service, with the right merchandise, always at the right price, thanks to a variety of store formats and the most efficient management and distribution support in the hardware, home improvement, and gardening products industry.” Not terribly exciting, but the brand is delivering bottomline results. The reason for this is a consistent shopping experience backed up by knowledgeable and helpful staff who seem genuinely interested in the customer. RONA is out to get it done – simply, professionally, and with a minimum of stress – which is an appealing message for anyone undertaking a home improvement project. INVESTORS GROUP (INVESTORS GROUP INC. ) CIBC (CANADIAN IMPERIAL BANK OF COMMERCE) Another financial services giant in Canada attempting to offer Canadians the freedom they want “For What Matters.” This take on a general message shared in the industry is meant, not to judge, but to be there for customers so they can be in a position to undertake what interests them, from a safe financial position. CIBC is in a tough situation. It appears not to possess the same personality of the other financial institutions on this ranking. RBC Financial Group is first for you, TD Canada Trust makes you feel comfortable, Scotiabank is desperate in having you as a friend, while CIBC remains inarticulate. This financial advisor remains an unrealized brand treasure. Great product, solid distribution, decent results – all hampered by business communications frozen in the 1970s. There is also another issue that they are proactively addressing – the sophistication and presentation of their frontline advisors. If Investors Group could unlock the value in their brand by differentiating the client experience and reflecting that in more revolutionary brand communications, there is no reason why this brand could not generate increased brand value N AT I O N A L B A N K O F C A N A DA With strong roots in French Canadian communities, National Bank has almost been silently and methodically entering more markets and is being well received. Its relatively small size communicates a more-approachable institution than the competition and its logically integrated products and services allow customers to see how their assets can be appropriately managed. The secret to this brand is its transparency and honesty with their customers. Interbrand’s Best Canadian Brands 20 06 15 5. Brand Commentary CI INVES TMENT S (CI INVES TMENT S INC. ) CI Investments has bounced back and forth over the years between cutting-edge communications and their current more-conservative tone. This is causing some confusion with their clients, who need to understand the character of the company to whom they entrust their assets. They are hinging their brand on insights, innovative products and, of course, performance. This is the challenge for any investment business: clients who switch when performance is below market averages. However, CI Investments, and other leading investment organizations, have recognized that a strong brand helps maintain loyalty through down cycles. JEAN COUTU ( T H E J E A N C O U T U G R O U P ( PJ C ) I N C . ) ROGERS ( R O G E R S C O M M U N I C AT I O N S I N C . ) More than “the French Shoppers Drug Mart,” Jean Coutu is an experimenter willing to modify formats to fit with desired consumer segments through adapting the experience to customer wants and needs. There is clear evidence that they consistently satisfy their core brand promise of offering customers all the advantages of a large drugstore chain while still retaining the personalized service offered by a local pharmacist. Though not an example of elegant or aesthetically pleasing branding, with the Brooks and Eckerd purchases, they are now the fourth-largest drugstore chain in North America. This brand embodies an impressive but potentially confusing array of products and services. Rogers has appropriately addressed its brand architecture in an attempt to organize its offering from the customer’s viewpoint. This has eliminated potential conflict while showing customers a clear progression in how they can access increasingly sophisticated products and services. The brand cannot claim to be cool like Telus, nor exactly an institution like Bell, so it has found a middle ground that attempts to be credibly customer-centric. M A C ’ S / C O U C H E -TA R D ( A L I M E N TAT I O N C O U C H E -TA R D I N C . ) MACK ENzIE INVES TMENT S ( M A C K E N z I E F I N A N C I A L C O R P O R AT I O N ) It is not easy having others sell your product, because it means you cannot control the entire experience. And, although Mackenzie Investments emphasizes consistent, superior long-term investment returns as its primary brand message, it is also deeply committed to its relationships with skilled, independent financial advisors who represent their product. They know you cannot have one without the other – superior product and service. This combination can be attributed to impressive growth in assets, profit, brand awareness, and loyalty. An organization whose growth reflects a healthy balance between organic and acquisitions, Mac’s and Couche-Tard are on a path to ubiquity, with a proliferation of locations under different banners. Convenience is not only their industry but at the heart of what they do – a quest to simplify the lives of those on-the-go. They are also innovative and have introduced the Impact Store, a redesign concept prompted by consumer research. It tailors the stores to meet the specific needs of customers in their different communities. This involves variations in product mix and pricing, service delivery, and differentiation in interior design and merchandising. They are not afraid to write a cheque either, having purchased 1,663 Circle K stores in 16 American states in 2004. Interbrand’s Best Canadian Brands 20 06 16 5. Brand Commentary SOBE YS (SOBE YS INC. ) L A B AT T ( L A B AT T B R E w E R I E S O F C A N A D A ) On a relative basis, Canada’s brewers seemed large and unstoppable in their heyday. Now, by operating in global markets and with increasing competition, they do not seem as formidable. Labatt has recognized the changing landscape and is sending out messages that focus on heritage, experience, and a desire to be the best rather than the biggest. Arguably, both Labatt and Molson have produced great products through the decades, but that no longer guarantees success. As stated by Labatt, “The company’s challenge is to continue to create innovative ways to enhance products, relationships, and results.” Labatt gets it – it is not about a new super strategy, it is about executing in a consistent, fun way that reflects the purpose of its products. This will require a sustained understanding of customer interests and buying behaviour to ensure a healthy share of market, while achieving the decent margins that a strong brand should produce. As with Loblaw, we valued the Sobeys-branded retail format only and not the three other retail brands used for local market relevance in food distribution. Sobeys professes three strategic linchpins to its business – superior customer service, excellent product variety, and competitive operations. These are sound principles, however, there has been evidence that execution against this strategy has been inconsistent. But, from a brand standpoint, Sobeys is looking to improve the in-store experience by focusing on employee training and product knowledge. SUNCOR ENERGY ( SUNCOR ENERGY PRODUC T S INC. ) LOBL AwS ( L O B L A w C O M PA N I E S L I M I T E D ) Loblaw Companies Limited is Canada’s largest food distributor and retailer. But it must be made clear that their spot in the ranking is based solely on the Loblaws retail format and not on its seven other food store formats or its two high-profile private label brands: President’s Choice and President’s Choice Financial. If we were to include those other assets, they would hold a significantly higher position because Loblaw understands branding. They are astute at brand portfolio management, they strive to be innovative (as evidenced by the President’s Choice program, which is a global best practice), and they have a tremendous system for merchandise mix and pricing optimization. The customer experience in a Loblaws store is entertaining. Also, by establishing “mini-villages” with complementary retail offerings (liquor store, dry cleaner, and the like), they have provided customers with an easy method of getting what they need all in one place. Suncor has four major business divisions in Canada. The core business is oil production and refinement through the development of one of the largest petroleum resource basins in the world, the Athabasca oil sands. This is supported by conventional natural gas production, and downstream refining and retailing of energy products. Their well-known Sunoco retail brand will be the most recognizable asset for Canadian consumers. In the highly competitive automotive service market, Sunoco is able to differentiate itself with premium products and services, such as the ecowash car-wash, named Canada’s “Best Car Wash” five years running and certified by the Canadian government for environmental quality standards. Well aware of the impact they could have on the environment, Suncor is committed to reducing their environmental footprint and contributing to the well-being of the communities where they operate. Suncor’s long-term plans to develop the oil sands responsibly, to expand oil production with increasingly sophisticated mining technology, and to further integrate their products into the Canadian and US retail markets, all point to a brand value that will enjoy sustainable increases in the future. Interbrand’s Best Canadian Brands 20 06 17 6. Insights and Trends F I N A N C I A L S E R V I C E S D O M I N AT E “ C A N A DA” The Canadian banking market is a mature sector with a handful of brands dominating the competitive landscape. Banks have a rich history and heritage in Canada, fueling preference and loyalty. This rich history has created high barriers to entry that allow the Canadian banks clear competitive advantage over the major players in the US, where there is a diverse landscape with value spread across many brands. While Canada may be a prime target for international expansion, foreign ownership restrictions in the financial services category have protected these brands, increasing the sustainability of those businesses. It is important to note that, although financial institutions dominate the ranking, their brand value, as a percentage of market capitalization, averages 4.1%, allowing for greater branding investment and return. While having national pride is a great brand driver within Canada, the close national association may limit global expansion. Of the top ten Canadian brands, three refer explicitly to Canada in their brand name and another one has contracted it to an initial. This speaks strongly of Canada’s national pride. Having a home-grown, native brand is a strong purchase driver in the Canadian marketplace, and these top brands leverage this. Strong national pride is fairly typical and is evident in many of Interbrand’s regional rankings. For comparison to a nation similar to Canada in demographics, geographic size, economy, and population, the Best Australian Brands ranking has five of the top ten with a regional reference in their name. This verbal branding strategy certainly is a powerful technique for purely domestic brands, but the challenge lies in the limitations that the strategy establishes. As home-grown brands expand and become more established in their individual markets, the opportunity to compete on a global level becomes a viable expansion option. A corporate name that places great weight on the home country can be a potential barrier to international expansion. Interbrand’s Best Canadian Brands 20 06 18 7. Contacts and Additional Information C O N TA C T U S A D D I T I O N A L I N F O R M AT I O N Business inquiries: Bev Tudhope Chief Executive 33 Bloor Street East Suite 1400 Toronto, Canada M4W 3H1 Tel: 416 366 7100 Fax: 416 366 7711 btudhope@interbrand.ca Media inquiries: Jeff Swystun Global Director 130 Fifth Avenue New York, New York 10011 Tel: 917 690 5383 jeff.swystun@interbrand.com Read Interbrand’s white paper series on Branding in Canada: Issue 1 - Where are the Great Canadian Brands? Issue 2 - Differentiating for Greater Performance Issue 3 - Can Canadian Brands Go Global? Issue 4 - The Canadian Brand Agenda http://www.interbrand.com/books_papers.asp www.interbrand.com www.brandchannel.com Interbrand’s Best Canadian Brands 20 06 19 8. Appendices: Best Canadian Brands – FAQ w H AT I S B R A N D VA L U E ? There are three key elements and they are detailed as follows: Financial Forecasting We identify the revenues from products or services that are generated with the brand. From these branded revenues, we deduct operating costs, applicable taxes, and a charge for the capital employed, to derive intangible earnings. Intangible earnings are the earnings that are generated by all of the business’ intangibles, including brands, patents, R&D, management expertise, etc. This is a prudent and conservative approach, as it only rewards the intangible assets after the tangible assets have received their required return. The concept of intangible earnings is, therefore, similar to value-based management concepts, such as economic profit or EVA (Economic Value Added is Stern Stuart’s branded concept). Based on reports from financial analysts, we prepare a forecast of intangible earnings for six years. Role of Branding Since intangible earnings include the returns for all intangibles employed in the business, we need to identify the earnings that are specifically attributable to the brand. Through our proprietary analytical framework called “role of branding,” we can calculate the percentage of intangible earnings that are entirely generated by the brand. In some businesses, e.g., fragrances or packaged goods, the role of branding is very high, since the brand is the predominant driver of the customer’s purchase decision. However, in other businesses (in particular, b2b), the brand is only one purchase driver among many, and the role of branding is therefore lower. In the case of Shoppers Drug Mart, for example, people buy – not only because of the brand – but also because of the location of the stores. For each of the brands (and categories), Brand value is the dollar value of a brand, calculated as net present value (NPV) or, today’s value of the earnings the brand is expected to generate in the future. Like any other NPV, brand value is measured at a point in time, based on the assumptions and information available at that point in time. Brand value is calculated according to the most widely accepted and used valuation principles. Brand value is, therefore, comparable to business- and all NPV-based asset valuations. The valuations of brands appearing in the Best Canadian Brands survey are calculated in their current use to their current owner. They, therefore, do not necessarily represent the potential purchase, extension, or licensing value of the brands. w H Y VA L U E B R A N D S ? The purpose of these valuations is to demonstrate to the business community that brands are very important business assets and, in many cases, the single most valuable company asset. We also aim to make branding and marketing key business issues that have direct impact on shareholder value. H O w D O E S I N T E R B R A N D D E R I V E T H E VA L U E O F THE BR ANDS? Brand value is the net present value or, today’s value of the earnings the brand is expected to generate in the future. This valuation approach is a derivative of the way businesses and financial assets are valued. It fits with current corporate finance theory and practice. Interbrand’s Best Canadian Brands 20 06 20 8. Appendices: Best Canadian Brands – FAQ w H AT w A S T H E B A S I S O F T H E F I N A N C I A L A S S E S S M E N T S ? we have assessed the role of branding. In situations where the brand is used across a variety of businesses, the role of branding figure was assessed for each core business segment. The role of branding is a percentage and, thus, if it is 50%, we take 50% of the intangible earnings as brand earnings. If it is 10%, we take only 10% of the earnings. Brand Strength For deriving the net present value of the forecast brand earnings, we need a discount rate that represents the risk profile of these earnings. There are two factors at play: firstly, the time value of money (i.e., $100 today is more valuable than $100 in 5 years because one can earn interest on the money in the meantime); and secondly, the risk of the forecast earnings actually materializing. The discount rate represents these factors because it provides an asset-specific risk rate. The higher the risk of the future earnings stream, the higher will be the discount rate. To derive today’s value of a future expected-earnings stream, it needs to be discounted by a rate that reflects the risk of the earnings actually materializing and the time for which it is expected. For example, $100 from the RBC brand in 5 years commands a lower discount rate than $100 from the National Bank of Canada brand in 5 years, since the RBC brand is stronger and is, therefore, more likely to deliver the expected earnings. The assessment of brand strength is a structured way of assessing the specific risk of the brand. We compare the brand against a notional ideal and score it against common factors of brand strength, such as awareness, market position, customer satisfaction, loyalty, and advertising and marketing support. The ideal brand is virtually “risk-free” and would be discounted at a rate almost as low as government bonds or similar risk-free investment. The lower the brand strength, the further it is from the risk-free investment, and so, the higher the discount rate (and, therefore, the lower the net present value). Using the 2005 edition of the Report on Business Top 1000 list of the largest publicly traded Canadian corporations, Interbrand formed an initial consideration set of brands owned and operating in the country. Published annual reports and analyst reports from multiple investment banks were used to examine the revenues, earnings, and balance sheets of the brand-owning companies. w H AT w A S T H E B A S I S F O R T H E M A R K E T I N G ASSESSMENT S? Our experience in creating and managing brands for over 30 years has resulted in the development of brand metrics that consider: (a) the level of differentiation the brand has achieved; (b) the success of the current position; (c) the ability to control that position; and (d) the ability to maintain differentiation from competitors. Our expertise was supplemented with press articles, analyst comment and syndicated market research. H O w S H O U L D w E U N D E R S TA N D T H E B R A N D VA L U E A S A % O F M A R K E T C A P I TA L I z AT I O N ? The market capitalization represents, at a point in time, investors’ assessment of the net present value of all future financial benefits the company is expected to generate. This includes the value of the employed brand assets. However, since very few companies state the separate value of their brand assets, we do not know how much of the value of the business is supported by the value of the brand. It can be read in a number of ways: • If BV % of Market Cap is low, it suggests that the business is driven by other kinds of assets (tangible and intangible) and that the brand is relatively unimportant. It might also mean that the business is failing to leverage the brand as much as it could be and that investors should be concerned about that. • If BV % of Market Cap is high, it suggests that the business is driven by the brand and that investors must take care of how the brand is being managed, since this will have a direct effect on shareholder value. It could also mean that the business is undervalued by the market and that they are failing to reflect the true value of all the assets of the business, of which the brand is one (but only one). Interbrand’s Best Canadian Brands 20 06 21 8. Appendices: Best Canadian Brands – FAQ The comparison of brand value to market capitalization is mainly useful for mono-branded businesses because the market capitalization relates to all company assets. For companies that own many businesses that operate under different brands, such as Loblaw or Sobeys, this comparison is less meaningful. w H Y A R E C E R TA I N B R A N D S N O T O N T H E L I S T ? This is a frequent question, especially from companies who would expect their brands to be on the list. The most likely reasons are as follows: • Less than 65% of the company’s revenue comes from within Canada. • There is lacking public financial data that enables us to identify the branded business (the company has multiple brands or has unbranded production) • It is not a consumer-facing brand. Holding companies were excluded. • Wholly owned or local subsidiaries of global brands (e.g., Shell Canada) were excluded on the basis that their value is not entirely rooted in Canada. • For most insurance companies (e.g., Manulife), we are not able to distill an accurate enough valuation from public information. Insurance companies do not have an operating profit line – they use embedded value as they are a sell now / pay out later business. S O M E C A N A D I A N B R A N D S S E E M T O H AV E A H I G H E N O U G H B R A N D VA L U E T O M A K E I T I N T O T H E G L O B A L R ANKING. wH Y AREN’ T THE Y AMONG THE BES T GLOBAL BR ANDS? wAS THERE A LIMIT TO THE NUMBER OF BR ANDS INCLUDED FROM AN Y ONE INDUS TR Y ? No. However, one of the requirements of a leading brand is that it is leading in its category. The mark of leadership is not just about market share but also about acting like a leader – setting trends, having high quality standards, commanding authority in the category, and so on. So, there are brands that have market share ranking in the top three of their category but did not make the cut, and brands that are not top-three that did. The rules described are guidelines and, ultimately, each brand was assessed for inclusion on its own merits. wH Y IS INTERBR AND AN ExPER T IN ASSESSING B R A N D VA L U E ? TD Canada Trust and RBC Financial Group are looked at through a Canadian lens for the purpose of this ranking, so the brand strength score is incredibly high, since they are the dominant brands within their home country. However, when we look at these brands through a global lens, the strength score would not be as high and, therefore, the value would decrease. For comparison, Goldman Sachs is well known as an investment bank around the world, whereas RBC does not globally command as strong of a preference. In 1987, Interbrand developed and introduced the first valuation of a portfolio of brands that used a brand-specific valuation approach. Since then, we have continuously updated and improved our valuation approach to make it the global industry-standard of brand valuation. The Interbrand brand valuation methodology is the most widely endorsed and used valuation approach around the world. Interbrand alone has valued more than 3,800 brands in all industries worldwide. Our valuations have been endorsed by leading academics including Harvard, Thunderbird, Columbia, St. Gallen, and Emory, to name a few. Our valuation approach has the widest breadth of application, including strategic brand management, marketing budget allocation, marketing ROI, portfolio management, brand extensions, M&A, balance sheet recognition, licensing, transfer pricing, and investor relations. Our valuations have been audited for inclusion on the balance sheet by all leading accounting firms. Also, many tax authorities and law courts around the world have accepted our valuation approach. Interbrand’s Best Canadian Brands 20 06 22 8. Appendices: Best Canadian Brands – FAQ DOES INTERBR AND CONDUC T OTHER BR AND SURVE Y S? Since 2000, Interbrand has partnered with BusinessWeek to produce an annual study of the Best Global Brands, creating the world’s most significant and influential brand and marketing survey. PRWeek magazine conducted a survey of the important rankings to senior executives. Their survey concluded the our Best Global Brands study was regarded by senior management as the third-most influential ranking. In addition to the global study, Interbrand has established national or regional brand value league tables in France, Spain, Australia, Singapore, Taiwan, Mexico and Brazil, Moscow, South Africa and, now, Canada. w H AT A R E T H E L I M I TAT I O N S O F T H E S E VA L U AT I O N S ? w H AT I S T H E D I F F E R E N C E B E T w E E N T H E VA L UAT I O N S I N T H I S R A N K I N G A N D C O N S U LT I N G VA L UAT I O N S FOR CLIENT S? The valuation method is the same, however, the data input significantly differs. The valuations in this survey are consolidated top-line assessments based on publicly available marketing and financial data. These valuations are only as reliable as the data that the brand-owning companies publish about themselves (in annual reports, analyst briefings, press articles, syndicated market research, etc.). Consulting valuations are based on detailed customer segmentation studies and primary research, as well as in-depth marketing and financial analyses. The purpose of consulting valuation goes well beyond assessing financial numbers and includes identifying and quantifying value drivers and metrics to manage brands for increasing the shareholder value of the underlying businesses. Compared to doing a proper formal valuation project for the brand owner, the limitations are: they are based on public data only; there is no input from management (in order to maintain consistency); certain key brands are not listed; and only a limited amount of time can be spent on any one brand. The main limitation is that the valuations tell you how much value the brand creates, but not what is driving brand value or what would increase brand value going forward. A formal valuation would do just this and Interbrand works with our clients to understand the factors that drive value to their brand and what measures could be taken to leverage that value. Interbrand’s Best Canadian Brands 20 06 2 9. Appendices: Interbrand: Creating and Managing Brand Value T H E I N T E R B R A N D B R A N D VA L U E M A N A G E M E N T M O D E L Brands do not become and remain successful on their own. Nor are they ensured ongoing leadership without proactive, diligent and detailed management. Interbrand works collaboratively with clients to consistently and continually evaluate, create, and manage their brand assets. We do this by employing the following Brand Value Management model. The Brand Value Management model is a closed loop with neither a specific beginning nor definite end. It begins at a different point for every brand, based on business need. However, one aspect does remain constant: once in progress, the model accelerates – generating synergies and capturing new opportunities through carefully crafted and integrated activities. It becomes an inexhaustible source of energy and competitive advantage for every brand. Brand Value Management comprises three distinct, yet interrelated, phases: Evaluate, Create, and Manage – three phases where the brand and market opportunities are painstakingly examined, creatively brought to life, and thoroughly and holistically coordinated. Since 1974, Interbrand has worked with the best global brands to create and manage brand value through an integrated set of offerings. We offer brand and business strategy, brand valuation, quantitative and qualitative research, retail design, brand architecture and portfolio optimization, naming, corporate identity design, packaging design, communications creation and online digital asset management tools. Interbrand’s Best Canadian Brands 20 06 24