Best Australian Brands 2009

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Best Australian

Brands 2009Ranked by brand value


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Appendix

27 Commonly asked questions

32 About Interbrand

32 Contact us

01 Best Australian Brands

A letter rom Damian Borchok

02 Overview

Best Australian Brands 2009

03 Why the Best Australian Brands

ranking is important

04 The Red Thread by Jez Frampton

Putting the brand at the core o the

business becomes a uniting orce behind

everything you do and say to drive value

08 The uture o uture-proong brand

investments by Greg Silverman

How will we measure the unobservable

and make inormed brand investment?

10 Planning your touchpoints to

accelerate prot by Rune Gustason

Understanding brand as a centralorganising principle requires the

management o every touchpoint to

build the experience or consumers

12 Interbrands approach to

valuing brands

Criteria or consideration

and methodology

13 Top line industry stories

by Lynton Pipkorn

Trends and insights into Australian brands

16 Ranking

Proles o Australias Most

Valuable Brands and other prominent

Australian brands

Contents


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Best

AustralianBrandsInterbrand presents the ourth ranking o the mostvaluable Australian brands, arranged by brand value.

Biography:

As Managing Director or Australia,

Damian Borchok believes

brands need bold strategies and

remarkable creative execution to

deliver breakthrough perormances.

His past clients include Telstra, News

Limited, Goldman Sachs JBWere,

ASX, Perpetual, Fuji Xerox, Diageo,

Qantas, David Jones and Nestl.

demand or their goods and services around the

world. Strong brands also create allegiance, use

dierentiation so they are not easily replicable,

work harder to impact markets, and command

premium pricing. The best brands also attract

the best talent, continually reward investors,

use leadership to grow market share, and are

better in economic downturns. They are

business assets that create value and give

companies tighter control o their uture.

As this study shows, many Australian brands

are poised or urther growth. Australian brands

are aggressively seeking to expand away rom

our shores into larger and more lucrative

overseas markets. This promises these brands

greater growth opportunities, and reduces risk

to their earnings prole and urther revenue

generation capabilities. Some companies such

as Billabong, Macquarie Group, Harvey Norman,

Ansell, Computershare, Flight Centre and even

Australia Post have now established oshore

cash ows. This strategy has proven to be

a great success or these brands, and it is clear

that many Australian brands are well prepared

or the challenges that lie ahead. I would liketo take this opportunity to congratulate each

brand in making the Best Australian Brands

table. I wish you every success in your brand-

building eorts and the uture that lies

ahead. I would also like to take this moment

to thank Monash University and the Faculty

o Business and Economics or their research

support in producing the Best Australian Brands

2009 study.

Yours sincerely,

Damian Borchok

Managing Director

Interbrand Australia

The economic turmoil o recent months has

made it more important than ever to

understand your brand. The past studies o

the Best Australian Brands were conducted in

times o economic growth. In good economic

times, most brands will create some sort

o value. But in todays uncertain times,

where short- to medium-term prots are

under signicant pressure, the challenge

or all brands will be to evaluate their brand

proposition and better understand their

customers perceptions o value. At the same

time, the dramatic shits in demand and

business sentiment have altered the horizon

or most marketing departments. There is

continued pressure placed on ROI, and the

temptation is to cut marketing budgets,

discount prices and reposition brands as value

propositions to maintain cash ows. Yet, such

tactical approaches may erode long-term

brand value we all know it is much harder

to trade a customer back up the value chain

once margins have been eroded.

Protecting the brands long-term compound

investment must remain the highest priority.The careul crating o a brands positioning

must not be put at risk by expedient use o

tactical communications that drive short-

term volume benets. Such a strategy can

lead to the destruction o the promises that

created value or the brand in the rst place.

The real test or Australian brands weathering

the economic downturn and creating

sustainable long-term brand value lies in

understanding these promises and staying

true to the pillars that orm the oundation

o a businesss brand value.

Strong brands develop even stronger productsand services, undeniably creating sustainable

value or their owners. I brands are innovative

and managed correctly, they can move

seamlessly across geographies, transcend

dierent languages and cultures, and create

Best Australian Brands 2009 01


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The key to successul brand value

management or Australian brands is to put

in place strategies that take advantage o

opportunities in the downturn, then set

a budget to achieve that strategy. Brands

will need to work harder and smarter in this

period to maintain leadership and generate

brand value. Central to their success will be

the ability to get closer to stakeholders by

employing more robust, end user-orientated

analytics practices to yield greater evidence-

based insights and outcomes.

The article, The Future o Future-Proong

Brand Investments, by Greg Silverman

highlights how analytics can assist brandsto make more inormed brand investments.

These analytics-based approaches aid

precision in decision-making and lead to more

eective insights and protable outcomes.

By integrating brand analytics approaches

throughout strategy, design and brand

valuation, more precise capabilities are

now available. These oer more eective

diagnostic tools to understand the economic

benets that brand assets provide to their

owners. Brands with oresight and vision

can now more eectively leverage the

dierentiation and strength o the brand

proposition relative to their competitors.

As a result, it is not only possible to quantiy

a brands contribution in the decision-making

process and to measure its competitive

strength in acquiring and retaining

customers. Now, we can also predict the

value o an innovation and understand at

which communications touchpoint a brand

investment generates the most demand.

By better understanding the equity drivers

that create demand and impact brand value,

brands will be better positioned to maintain

cash ows, justiy ROI and preserve the nowprecious equity residing in the brand. In doing

this, brands will be best positioned to emerge

rom the downturn and ready to capitalize

on their weaker rivals when markets begin

to recover.

We are delighted to unveil the Best Australian

Brands 2009.

In order to qualiy or the Best Australian Brands

study, the company that owns the brand must

be listed on the Australian Stock Exchange or

have its nancial inormation publicly available.

The brand must be registered or at least three

years, and it must originate in Australia or be

owned by Australian companies.

The ollowing insights highlight the specics

o the Best Australian Brands ranking,

and the present situation o Australias best

perorming brands.

Telstra,inrstposition,continuestobe

Australias most valuable brand at A$ 9.7

billion. In second position and valued at

A$ 7.1 billion, the Commonwealth Bank o

Australia (CBA) is Australias most valuable

banking brand (with National Australia

Bank at A$ 5.1 billion taking out third place).

Thetop10brandsprovedtobeverystable

and have demonstrated an ability to manage

their brands to create greater value over

a sustained period o time.

ThebignancialservicesbrandsinAustralia

have not yet been as seriously aected as

their contemporaries in others countries.

This is a result o the legacy o a strong

regulatory system, strong balance sheets

and a healthy domestic deposit base. CBA is

by ar Australias biggest bank and has gained

considerable value by representing a sae

nancial haven or a lot o Australians.

Ofconsiderableinterestgoingforwardwill

be how Westpac will manage the value o its

A$ 6.7 billion merger (the combined values

o both the Westpac and St. George brands).The challenge will be to continue to grow

the value o the St. George brand, currently

valued at A$ 1.9 billion, without eroding

Westpacs value.

It is important to mention that there are

other valuable Australian brands that would

make this list. However, because o diering

reporting periods or the inability to separate

individual brand earnings rom consolidated

gures, we are unable to include or estimate

their individual brand value.

The importance o brand valuation

The articles in this study introduce the

importance o understanding the importance

o brands as a central organizing principle.

Brand valuation is an essential step in this

process. It provides the weaponry to identiy

how brand inuences perormance byuncovering the key drivers that eect

consumer choice. And as a management

tool, brand valuation also reveals a number

o key insights that serve to provide an ROI

perspective and, more importantly, inorm

the uture strategic direction o the brand.

These include:

Recommendationsforhowbrandvalue

drivers can be incorporated into brand

positioning, media planning, communication

touchpoints and experience

Thehealthofthebrandstrengths,

weaknesses, brand development

opportunities, brand stretch and market/

competitive threats

Theextenttowhichbrandand

communications strategies are contributing

to creating brand value

Driversofcompetitiveadvantageandhow

these are sustainable

Areasofbrandweaknessandthestrategiesrequired to build brand strength and lit

brand perormance

Marketingspendguidancetoensurethe

greatest value impact

Overview

Best AustralianBrands 2009

02 Best Australian Brands 2009


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The branding practices employed by

Australian companies are becoming more

and more sophisticated. Interbrands ourth

ranking o the Best Australian Brands

continues to put an emphasis on brand

perormance and its contribution to

business perormance. The ranking provides

brand values that are measures o economic

perormance, stating what the brand is

worth overall and among competitors.

Brand value brings to marketing what

revenue goals or nancial hurdle rates

bring to other aspects o business.

The most important inormation comes

when one looks behind the number as a single number only tells so much. It is

more important to understand what drives

brand value:

Intangibleearnings:thecashowof

a business not associated with such

tangible assets as equipment or materials

Theroleofbrand:ameasureofhowmuch

brand inuences purchasing decisions

Brandstrength:abenchmarkofabrands

relative risk compared to competitors

Understanding the drivers o brand value can

inorm management action, rom overall

business strategy to specic marketing

tactics. It is an easy-to-use metric to help

brand owners determine where they are,

where they are going, and how to get there.

Brand valuation can assist in positioning

brand building as a critical aspect o

enterprise by answering the ollowing

questions.

Are we investing adequately in our brand?

Putting an economic value on a brand

(overall and by segment) can help make

a strong business case or marketing

investments, overall and across a brand

portolio. While delivering a very important

ROI measure, brand valuation, more

importantly, can help organisations to

understand what levers drive brand value.

It is these insights that can assist in the

appropriate allocation o investment andthe development o the strategic catalysts

that can inuence uture value creation.

Is our marketing perormance eective

and ecient?

Your customers make decisions every day

between you and your competitors.

Analysing the role o brand in those decisions

helps you to ocus your strategy on the

attributes that dierentiate your brand rom

others and to strengthen your relationship

with your best customers, thereby ensuring

uture earnings.

Are short-term tactics driving long-term

value creation?

By analysing the strength o your brand,

you can target marketing campaigns to

your most valuable customers in the most

competitive manner. This can enable you to

drive short-term sales without sacricing

long-term brand strength and relevance.

Most importantly, this ranking is presented

to oster debate and put greater emphasis

on the practice o branding. Our goal is to

demonstrate that brands are important

assets yielding signicant economic value.

To maximise the value inherent in your brand

requires proactive and consistent investment,

management and measurement.

Why do no Australian brands make the

Global Best Brands list?

While there are many signicantly valuable

Australian brands, none have yet to appear

on the Best Global Brands list. To qualiy

or the global table, at least one-third o

earnings needs to be earned rom outsidethe companys home base. The brand must

also be well-established in a wide number

o markets around the world and be

managed consistently as a global brand.

To put it into perspective, the 100th most

valuable brand in the 2008 Best Global

Brands Study was VISA, with an estimated

value o US$ 3.338 billion, which is

equivalent to A$ 5.188 billion at current

exchange rates. While some Australian

brands have a greater brand value, they

simply do not have the geographic spread

that would make them eligible to reach the

Top 100 Best Global Brands list.

Why the Best

Australian Brandsrankingis important



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The Red Thread is a concept woven

through many cultures. According to Greek

mythology, Theseus ound his way through

the Minotaurs labyrinth by ollowing

Ariadnes red thread, and a amous Chinese

proverb describes an invisible red thread

that connects us to all o the people well

ever meet. The Russians call it krasnaia nit,

and the French le l rouge. In German, roter

aden literally red thread is used to

describe the central or recurrent theme

o a larger work.

The idea o a bright, illuminating thread

that runs through everything, rom the

smallest ragment to the whole, is powerul

and captivating. In our world, this is

a wonderully rich and simple metaphor

or brand value.

The top perorming brands understand

the reality behind this metaphor. For them,

the notion o value runs like a red thread

through their brands, driving demand

throughout every aspect o their business.

They know that their brands must unction

as assets, not as expenses, and that even

the greatest brand idea is only as powerulas its ability to generate value.

The Red Thread:

creating and managingbrand valueby Jez Frampton

All o the ropes o the royal feet,rom the strongest to the thinnest,

are braided so that a red threadtravels through all o them, and youcannot remove it without untying allo them. Even the smallest ragmentwill still allow you to recognise thatthe rope belongs to the crown.From Goethes Elective Afnities (1809)

Biography:

Jez Frampton, Interbrands Group

Chie Executive, is responsible or

managing the rms worldwide

interests and enhancing the

strategic and creative oering.

Jezs experience has provided him

the opportunity to work with

dierent clients across multiple

sectors, including premier brands

like Budweiser, IBM and Toyota.



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The subject o brand value has been well

documented since Interbrand rst developed

the concept in the early 1980s. Today, our

competitors, commentators in the press,

the nancial community, and the industry

at large have much to say about the topic.

At heart, its a simple idea. I a brand plays

a role in choice and a consumer must choose

between dierent competitive products or

services in a marketplace, then the brand

must contribute to earnings and prot and

hence, must be quantiable and valuable

to the owner. In order to really understand

the creation o brand value, we need to

understand what actors drive demand,

what role the brand plays across each o

those actors, and how strong the brand is

versus its competitors.

But the Red Thread is about more than

a value-generating brand. Its about

understanding how that value is generated.

Its about creating, managing, and

measuring brand value across every aspect

o the business.

To put this into context, lets consider an

analogy. Capable o accelerating rom zero

to 100 miles per hour and back to zero in

under our seconds, a Formula 1 racing car

represents the very edge o technology in

the motor industry. Every car is ne-tuned

or each individual race, and every surace

and element o the car can be altered to create

the best aerodynamics, braking pressure,

tire pressure, gear ratios, suspension and

more. It is not the car but each individual

component o that car that must contribute

to the vehicles ultimate success.

Whats more, those components can

be quantitatively measured, giving the

racing team the inormation necessary to

optimise the cars perormance in real time.

Data streams rom car to trackside with

detail about uel consumption, lubricant

temperatures, braking heat and even driver

heart rate. When the competition is erce

and the dierence between winning and

losing can be measured in ractions o

a second, every detail must be tuned to win.

Imagine how powerul it would be i you

understood how your brand creates value

to the same degree o detail. Are you as

intimate with the perormance o your

brand as Formula 1 racing teams are with

the perormance o their cars? Are you as

prepared to battle the competition? Do you

quantitatively understand exactly how your

brand generates value?

By using brand valuation as a diagnostic

tool, we can now understand the preciseeconomic benets that brand has on every

aspect o our businesses. It is now possible

not only to quantiy a brands contribution in

the decision-making process and to measure

its competitive strength in acquiring and

retaining customers, but to predict the value

o an innovation and understand at which

touchpoint our brand investment generates

the most demand. The Red Thread helps us

see where in the acquisition process we lose

potential customers to our competitors,

which brand attributes are relevant at each

step in the customer journey, and ar more.

Most importantly, it helps us determine

exactly what it is that must be changed,

and how, in order to maximise value.



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Brand building isnt

a separate exerciserom the day-to-dayrunning o the business.It is integral to it.

Consider our work or BMW. Everything in

that organisation is coerced and corralled

into a single uniying vision, all united by

one value-generating idea. For BMW, this

red thread is the commitment to please

customers with the very best in automotive

engineering. This maniests itsel in a

ew obvious ways, such as its tagline and

messaging, but also guides management

decisions on everything rom showroom

plans to abric choices, and ensures that the

companys outer voice (what it says its going

to do) reects its inner voice (what it actually

does). And, as 93 percent o employees

believe that BMW Group is a great place to

work, its no wonder this translates to a brand

worth US$ 23 billion and the highest brand

value per automobile sold.

This is true o many o the worlds most

valuable brands. Look at Apple, whose

promise o a dierent experience through

ease o use creates a red thread that touches

all aspects o their business, including

product innovation and interace design.

At Disney, the commitment to create

magical experiences produces undeniable

value, orming a red thread that aects

everything rom the appearance and

behavior o its cast members to its

television programming. For Nike, the idea

o perormance runs through the business

rom Just do it to how the organisationgets it done.

Or take Interbrand, an example that is near

and dear to me. For us, the notion o brand

value itsel is our Red Thread. We are the

consultancy that sees brands as economic

assets, as drivers o demand, and creators

o wealth. We believe that behind every great

brand is a great idea that generates value.

Our daily mission is to understand how that

value is created across our clients businesses,

providing strategic advice and creative

solutions that have a common purpose and

oundation in generating demand. Whether

we are producing the corporate identities

that will uel the iconic images o the 21st

century or crating brand architectures to

optimise the way a major global enterprise

manages its assets, value is quite simply

the lieblood at the very heart o our business,

the common theme that unites us andmakes us stand out rom the crowd.

I believe that the concepts o brand and value

are inseparable. To be truly eective, brands

must be built around the thing that generates

the most value or your business. A brand

conceived in this ashion will create demand,

in turn improving the monetary value o

the business. Managed properly, this ever-

growing cycle o value creation will dene

the very essence o the 21st centurys

eminent brands.



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But to get there, we need to change the

undamental way that we think about our

businesses. Most companies spend massive

amounts o time and money optimising their

supply chains, but ew are willing to make

an adequate investment in the demand

side o their businesses. This is most likely

because the supply side is physical and

real. Its easy to understand the return on

tangible investments. The demand side o

our businesses, though, is oten less clear.

It requires courage to invest in intangible

assets. Thankully, the ability to measure

these intangible assets through precise

analytics should help us reocus our attention

on creating demand.

We must also change the way we think about

brands themselves. Ten years ago, brandswere seen as an extension o marketing:

a kind o halo around a business that

made it emotionally appealing. Marketing

departments spent time creating brand ads

with their agencies, an exercise seen as more

strategic and separated rom the day-to-

day process o selling products, announcing

promotions, or launching campaigns.

Today, the world has come to realise that

brands are an extension o business strategy.

Now understood to dene the essence o

dierentiation and to serve as primary and

integral drivers o demand, brands have asmuch to do with product, service, retail,

packaging, culture, web, pricing, channels,

and environments, as they have to do with

marketing and communications.

Thats a powerul shit in thinking in a

relatively short period o time. Not everyone

is there yet, but the leaders are. The global

corporations at the top o the Fortune 500 or

our own Best Global Brands ranking see the

world this way, and its only a matter o time

beore it becomes common practice.

Some audiences, despite accepting the

notion o a red thread, might believe that

the current economic climate makes this

the wrong time to invest in measuring and

managing brand value. But this could be

a costly mistake. This is the ideal time to

optimise budgets to ensure that every dollar

spent is driving demand and creating value.

Every boardroom is subject to greater degrees

o scrutiny over the use o shareholder unds

and now, more than ever, we need to knowwhere were likely to win, and where were

likely to lose.

All businesses thataspire to build greatervalue should considertheir red thread.

Without one, yourbrand may not begenerating real value.



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Understanding brand today

Beore dening the way a brand works, it is necessary to

understand the role o the brand and brand strength. The role

o brand explains what percentage o any purchase decision

is attributable to the brand. It is a measure o the inuence

brand has on customer demand. This understanding inorms

decision-makers on how the brand is doing today. Brand

strength, on the other hand, is a series o benchmarks that

measure a brands ability to secure ongoing customer demand

(choice, repurchase, retention).

Together, the role o brand and brand strength provide

managers with the knowledge to understand the uture

outcomes o marketing decisions made today. When

incorporated with current computing and analytics

capabilities, the combination is no longer just inormed

speculation. Rather, it oers measurable scenarios that

can provide insights that lead to courageous decisions.

I you type brand management in the Google search box

and ollow the link to the rst denition available, this is

what appears: Branding seeks to distinguish your company,

product or service rom the competition and create a lasting

impression in your prospects mind. (www.1000ventures.com)

Given the relevancy scores that Google is presumed to obtain 90 percent it is sae to assume that this denition is the

common understanding o brand management.

The web search denition is important because it suggests

that brands are competing with each other or consumers.

When ocusing on competition, the branding industry

traditionally looks to the role o the brand, as it is a measure

o inuence and compares the brand against other decision

criteria. This measure o inuence is capitalised on when

a brands equity unlocks value by connecting with end-users.

Unlocked value is brand strength the ability to protect

uture revenue.

The new order

This relatively static picture o competition and branding

has dominated the landscape or decades. However, over

the last decade, this ramework has broken down with the

increasing dominance o social networks. Social networksare moving the branding debate rom the traditional and

hierarchical to the latent and networked. As such, the

long-held view o competition and branding no longer works

because the orces behind the collective value o all social

networks have changed. In short, our customers culture

is trumping our strategy.

Along with the declining relevance o old strategy models,

we are witnessing a decline in the impact o the measures

attached to them. The greatest advance in the past decade

has been in the realm o choice-based research and marketing

mix models that measure change in a limited number o issues

in a marketplace. Marketing mix models are rooted in the

conventional wisdom that, i you track spending and sales

simultaneously controlling or all other variables then you

can clearly identiy what is optimal. A question still remains:

What company can actually control or all the variability o

the market? Media mix has clearly improved efciency, but

the process is backward-looking. Additionally, the rigid data

requirements do not accommodate the most important

actor: emergent social network inuences are

not simple to track.

Heres a common example: Apples new iPhone specs were

posted among riends on Facebook and the specs received

poor eedback, which magnied critics reviews. How can

Apple account or word o mouth that could change theproduct launch environment? The challenge now is to predict

the unpredictable in a new market environment.

The uture o

uture-proong brandinvestmentsby Greg Silverman

Biography:

Greg Silverman is the Global Practice

Leader o Analytics. With over 20 years

o experience in the business,

Greg and his team measure brand

investment to show in advance

whether an idea has the potential to

earn brand equity. He has done work

on an extensive list o clients that

boast some o the biggest brand

names in the world, including AT&T,

Bank o America, Lexus, and Gillette.



11/36

There is no better time than now orstrong brands to understand models

that uncover the hidden behaviorbehind these new revenue streams.

A new paradigm

Many marketers today unnecessarily constrain themselves

by saying, You can only optimise what you know.

With todays consumers riding on waves o unobserved

and hard to track patterns, new tools are needed to provide

a uture-looking perspective on brand-related value creation.The breakthrough in measurement will come in agent-based

modeling (ABM). An agent-based model is a computational

model or simulating the actions and interactions o

autonomous individuals in a network. It is capable o

assessing an individuals eects on the system as a whole

by combining elements o game theory, complex systems,

emergence, computational sociology, multi-agent systems,

and evolutionary programming. Monte Carlo methods are

used to introduce randomness.

The models simulate the simultaneous operations o

multiple agents, in an attempt to recreate and predict the

actions o complex phenomena. The process arises out o

a multiplicity o relatively simple interactions. The tool not

only captures the efciency requirements o media models,

but also accounts or emerging orms o behavior that

uel innovation. Currently, it is being applied to orward-

looking business decisions.

Agent-based modeling has already enabled:

AUShealthcareprovidertoaccuratelypredictthe

adoption o a new plan among seniors

Aglobalsportsorganisationtolauncharebrandingcampaign that creates ree buzz

Anautomotivecompanytoeectivelyreduce

incentives while growing market share

Amajorconsumergoodsretailertolowerstore

size 30 percent and increase sales

The uture

Media mix optimisation drives cost management, which can

help meet the street, but oten sacrices investment in new

revenue streams. Discrete choice modelling can evaluate

changes in the know. Although both oer insights into brand,

neither delivers on the imagination required to generate

growth or brands. In the end, revenue sustainability is the

hallmark o a good brand. Its strength lies in its ability to

protect uture earnings during down markets and unlock

value where brand can play a role.

Seemingly disparate groups of information become value creating segments



12/36

Planning your touchpoints

to accelerate protby Rune Gustason

We continually observe that the most

successul brands strive to put the brandat the heart o their business.

They understand that, by using the brand

as a central organising principle, they can

direct every single business unction, rom

HR and Distribution to Finance. In doing

so, they are able to deliver a truly holistic

brand experience that runs through the

organisation and then outwards, thus

engaging the customer.

The brand ultimately engages customers

(or any other stakeholder) in many dierent

ways, be it through advertising, product,packaging, and its people. Each contact or

touchpoint builds up an experience that

endures well beyond the product or service.

It denes and reinorces the perceptions

that customers have about the brand.

Conversely, it is equally powerul at dening

negative perceptions o a brand.

For service businesses, touchpoints are oten

time-based and are perishable experiences

that increase reputation risks. But touchpoints

also provide a golden opportunity to create

a powerul moment o intimacy through

sta-customer interactions. Shiting these

perceptions is the crucial oundation to

staying closer to current customers and

engaging new customers to try your brand

or the rst time. These deliver increased

revenues and margins that accelerate brand

value and protable growth or investors.

Nordstrom targets a single touchpoint

Nordstrom, the US retailer, has dominated

its market though the service it delivers to its

core customers. It has proven that customers

will pay a higher price or a superior service.

In so doing, this helps to dierentiate it romlow-price discount brands (Nordstroms sales

per square oot are twice the industry average).

The service dierentiation is delivered though

the belie that, at all times, the most important

person in the entire business is the customer.

It counter-intuitively achieves this not

with a biblical service manual but with

a single rule:

Useyourgoodjudgmentinallsituations.

This is ollowed by, There are no additional

rules. Nordstrom recognises that building

customer relationships is done one customerat a time. Nordstrom shares antastic

relationship-building stories throughout the

organisation to illustrate and train everyone

about what its service ethos o going the

extra mile means in practice. For example,

a customer who was at its Chicago store

searching or a black bow tie told this story:

I was going to a black-tie party, and

needed a ready-made bow tie. Nordstroms

didnt stock one, but the guy there said,

I you have ten minutes, how about I teach

you how to tie one? And, in the middle o

abusySaturdayafternoon,hedidjustthat

and got the sale. I was happy, I recommend

them to everyone, and I still tell the story

ten years later.

Clearly, the power o a great service ethos

can generate sales, great relationships and

great word o mouth marketing. But the most

important lesson marketers can learn rom

Nordstrom is that it invests primarily in a single

touchpoint. O course, its stores are clean and

well designed, but its ocus is on the sta-

customer touchpoint.

Every CEO and CMO knows that they must invest

in their brands experience. But the question

that haunts them is: Which touchpoint is the

driver o purchases and which ones are simply

nice to have? Early thinking on touchpoints

was based on satisying each contact to a better

level than your competitor. This approach is

highly ineective and reduces business

perormance because it ollows our classic

touchpoint management mistakes.

Biography:

Rune Gustason is Chie Executive

Ofcer o Interbrand in London.

Rune leverages his extensive

experience in brand and retail

propositions to regularly contribute

to publications and conerences

throughout the UK and Europe.



13/36

Classic touchpointmanagement mistakes

01 Targeting too many

customer segments

Businesses oten try to appeal to the widest

possible audience. But without dening a

narrow, attitudinally based audience, the

touchpoint experience will be ragmented

and oten results in conicting perceptions.

02 Dilution o the brand investment across

too many touchpoints

There are literally hundreds o possible

touchpoints and no brand in the world has

the time or resources to deliver each contact

to the highest level.

03 Competing on basic actors only

In an increasingly competitive environment,

classic benchmarking activities ensure that

brands copy each others dierentiators

resulting in a zero sum game. They are

mistakenly all trying to compete on best

practices rather than boldly challenging

convention. Those that do, like Virgin

or Disney, have been able to create anunassailable dierentiation with their

chosen target customers.

04 Relying on customer myths

to prioritise choices

The leading brands demonstrate that they

have the leadership mindset to make hard

choices and prioritise customer segments,

touchpoints and investments based on acts

rather than perceived wisdom.

Each contactor touchpointbuilds up anexperiencewhich endureswell beyond

the productor service.

Fact-based touchpointstrategy

The only way to develop a touchpoint

strategy that will increase business

perormance (and avoid these our mistakes)

is with a act-based, analytical approach.

InterContinental Hotels is an excellent

example o a traditional brand that has

re-invigorated itsel by developing a new

brand positioning and executing it perectly

by embedding it in the customer experience

and oer. It used a sophisticated statistical

Return on Investment (ROI) model designed

to identiy where and how to invest in the

customer experience. First, it identied

a narrow target audience that had a clear

attitudinal preerence or luxury travel

experiences that enriched their lie and

provided them with the additional social

currency o local knowledge and stories.

Then, InterContinental cleverly used the

statistical model to identiy which specic

parts o the customer experience truly

drove them to choose InterContinental

and, as a result, strongly increased theirsatisaction. This provided the Executive

Board with the clear evidence o what drives

revenues and margin. It also identied

areas o cost saving; parts o the experience

(and costs) that could be removed without

aecting their customers satisaction.

Its new positioning is the hotel brand that is

In the Know and delivers exactly what its

guests value without the things they dont

value. Guests benet rom the authentic,

insider knowledge about the places they

visit. They are prepared to pay a premium

(and stay more requently) or gaining this

social currency and the priceless stories they

could share with their amily and riends.

The challenge was to educate and motivate

large numbers o migrant or part-time

sta employees to deliver on this promise

consistently around the world. It was

a undamental shit to move rom hiding

the sta to making them the heroes and

encouraging them to interact with guests.

For employees, this new positioning was

translated into an insider knowledge program

or sta. It used the phrase, To you its just

a walk to work; to our guest its a great viewo local culture to educate and empower

all their sta to share their local knowledge

with guests.

Making bolder, act-based investmentdecisions

The InterContinental Executive Board boldly

decided to invest heavily in its sta as its

primary touchpoint, with the statistical

knowledge that this would deliver the highest

ROI. In act, it would provide almost double

the ROI compared to any other touchpoint.

Had it made many o the classic touchpoint

mistakes outlined above and invested too

little in too many touchpoints with too many

customer segments, it would certainly not

have achieved such strong business results.

InterContinentals brand has revived in the

year ollowing the 2006 rebrand. There was

an increase in positive brand perception o

10 percent and an increase in revenue per

room o 12 percent (source: IHG.com).

The success o this rebranding was the ability

o the business to put their brand positioning,

In the Know, at the heart o their operations

and translate this into a valuable touchpoint.

In a world where consumers are bombarded

by multiple messages every minute and

internal investment is increasingly scarce,there is an unequivocal case to be made

or drastically reducing the number o

touchpoints and investing strongly in a single

touchpoint that accelerates brand value and

protable growth. This naturally raises the

ollowing critical questions or every CEO

and CMO:

HowdoyoucurrentlymeasuretheROI

o your touchpoints?

Whichtouchpointscanyoulivewithout?

Whichtouchpointcanyoutrulyown

that dierentiates your brand?

Whichtouchpointactuallydrives

your prots?



14/36

Criteria orconsideration

Using the Australian Stock Exchange (ASX)

200 list o Australias largest publicly traded

corporations, and drawing upon more

than 30 years o consulting experience,

Interbrand ormed an initial consideration

set o eligible brands. All were then subject

to the ollowing criteria that narrowed

candidates signicantly:

Thebrandmusthaveoriginatedin

Australia. Hence, oreign-owned brands

operating in Australia are excluded,

e.g. Coke, McDonalds, Nike and Ford

ThebrandmustbeAustralianowned.Similarly, once Australian-owned but now

oreign-owned brands have been excluded,

e.g. Holden, Vegemite, Arnotts and Speedo

Theremustbesubstantialpubliclyavailable

nancial data

Thebrandmustbeamarket-facingbrand

TheEconomicValueAdded(EVA)mustbe

positive. I a brand is reporting negative

earnings, it can be difcult to derive a brand

value or the brand, unless strongly positive

orecast earnings are projected

Itiscriticallyimportantthatweareable

to identiy the brands total nancial

perormance, including revenues, prot

and asset base

The Interbrand approach

to valuing brands

Methodology

The Interbrand method or valuing brands

is a proven and straightorward ormula that

examines brands through the lens o nancial

strength, importance in driving consumer

selection, and the likelihood o ongoing

branded revenue. Our method evaluates

brands much like analysts would value any

other asset: on the basis o how much theyre

likely to earn in the uture.

There are three core components to our

proprietary method, as ollows.

Financial analysis

Our approach to valuation starts byorecasting the current and uture revenue

specically attributable to the branded

products. We subtract operating costs rom

revenue to calculate branded operating prot.

We then apply a charge to the branded prot

or capital employed. This gives us economic

earnings. All nancial analysis is based on

publicly available company inormation.

Interbrand culls rom a range o analysts

reports to build a consensus estimate or

nancial reporting.

Role o brand analysis

A measure o how the brand inuences

customer demand at the point o purchase

is applied to the economic earnings to arrive

at Branded Earnings. For this study, industry

benchmark analysis or the role the brand

plays in driving customer demand is derived

rom Interbrands database o more than

5,000 prior valuations conducted over the

course o 20 years. In-house market research

is used to establish individual brand scores

against our industry benchmarks.

Brand strength score

This is a benchmark o the brands ability tosecure ongoing customer demand (loyalty,

repurchase and retention) and thus sustain

uture earnings, translating branded earnings

into net present value. This assessment is

a structured way o determining the specic

risk to the strength o the brand. We compare

the brand against common actors o brand

strength, such as market position, customer

ranchise, image and support.

Year Year Year Year Year

Brand Revenues

Economic Earnings

Brand Strength Analysis= Discount Rate

Role ofBrandAnalysis

BRAND

VALUE

Brand Earnings

Brand Value CalculationFinancial AnalysisForecasted current andfuture revenue specificallyattributable to the brand

Role of BrandAnalysisA measure ofhow thebrand influences customerdemand at the point ofpurchase

Brand StrengthA benchmark ofthe brandsability to secure ongoingcustomer demand (loyalty,repurchase, retention).



15/36

Australian brandscontinue to growdespite dicult timesThe past decade has been a boom or

Australian companies, with revenues

and prots showing extraordinary growth.In line with this growth, Australian

brands have continued to strengthen and

prosper, and the aggregate value o the

top 10 Australian brands is now worth

approximately A$ 43 billion.

Over the past decade, the Australian

economy has experienced robust economic

growth, buoyed by the expectation that

revenues and corporate prots will grow

across all industrial sectors. With near ull

employment, businesses and consumers

have exhibited condence in spending and

investment, propelling the perormance o

many brands to new heights.

More recently, however, the Australian

economy has aced a number o challenges.

The all out o the sub-prime mortgage

turmoil and ongoing global nancial crisis,

the rise and subsequent sharp all o the

Australian dollar, and the volatility in uel,

materials and raw commodity prices have all

hit home. As a result, a number o Australian

companies have battled signicant write-

downs, rising input costs and adverse

oreign exchange conditions, all o which

have put signicant pressure on protability

and the perormance o their brands.

For the rst time since the early nineties,

Australia is eeling the eects o a recession.

However, while a number o challengeremain, interest rates are now at their

lowest point in many years and ination

appears to have stabilised.

As we battle the global recession, the

challenge or Australian brands will be to

re-evaluate what they understand about their

customers. They must apply these insights

into consumer motivations and brand

perceptions to position their brands to

respond to these changes in business and

consumer sentiment. This can only stimulate

demand and build corporate value in the

years ahead.

It is also prudent to recognise that total

company values in relation to market

capitalisation are declining in the short-term

due to high levels o volatility. However,

well-managed brands are stable assets

in terms o brand value, and those that have

positioned themselves or the long term

should be the rst to prosper when the

economy begins to show the rst signs

o recovery.

Top line industry stories

by Lynton Pipkorn

Biography:

Lynton is Interbrand Australias Brand

Valuation and Analytics practice head.

Lynton is responsible or valuing brand

assets and managing the strategic

outcomes resulting rom valuation

and analytics projects or clients.

His previous clients include Qantas,

Nab, VISA, MLC, PwC, Bank o New

Zealand, Gazprom, National Foods,

Nestl and Nokia.



16/36

The emergence oprivate equity

In recent years, private equity has begun

taking ownership and controlling stakes

in key brands. Brands that exempliy this

trend include Myer, Nine Network, Seven

Network and Repco.

With the exception o Myer, private equity

purchases have resulted in signicant

restructures o a number o businesses,

meaning their nancials are no longer

available or company structures are no longer

comparable to analyse or the purposes

o this study.

Brands such as Channel Nine and Channel

Seven have been subsumed by complex

company ownership and reporting structures,

making it difcult to access and isolate key

valuation and nancial inputs required to

create the Best Australian Brands study.

Banking and nance

The Australian banking landscape

has undergone considerable changes

in the past decade, with the sector

exhibiting strong growth and robust

operating conditions.

However, as we head into a deepening global

economic downturn, we have seen a urry

o activity connected to the extraordinary

events o the sub-prime meltdown and the

resulting global nancial crisis. The retailcommercial banks have suered their

rst collective prot all in 15 years with

pre-tax prots down by 23 percent in 2008.

The tightening o credit and the continued

rationalisation in the banking industry

is anticipated to create urther adverse

operating conditions.

In this context, the marketing messages rom

the major banks were quick to reect the

changing consumer and business sentiment

rom growth and wealth creation to security

and preservation by shiting their positioning

to saety and a return to conservatism in thelong term.

The highly publicised bankruptcy o Lehman

Brothers and the threatened insolvency o

major banking and nancial services brands

such as Northern Rock, AIG, Royal Bank

o Scotland, Citigroup and Merrill Lynch

triggered a signicant crisis o condence

with lenders and consumers, orcing the

Australian Federal Government to guarantee

the savings o all deposits under A$ 1 million.

Notwithstanding the allout o the credit

crunch, the our major banks continue to

retain prominent top 10 positions in the

Best Australian Brands study.

CBA remains the number one banking brand,

while St. George has entered the top 10 or the

rst and perhaps the last time. The combined

value o the our major banks is worth A$ 20.1

billion, almost hal the value contained in thetop 10.

In 2008, the Bendigo and Adelaide Bank

merger marked the rst major change in

the structure o the Australian banking

industry. Since then a number o other

regional and smaller brands have expressed

plans to merge as a result o domestic

and international pressures.

Commonwealth Bank, with the acquisition

o BankWest and 33 percent o Aussie Group,

has consolidated its place as Australias

largest nancial institution. St. George, beore

the merger announcement with Westpac,

was looking to challenge the big our

dominance. Now, as a combined dual-branded

organisation, the merged entity should create

one o Australias largest tier one banking

and nance groups.

The nancial crisis has also hampered the

perormance o a number o Australian banks.

In particular, ANZ and NAB both ace

a number o bad debt write- downs, and the

Federal Governments bank deposit guarantee

has caused a ight o capital rom thenon-bank sector. The higher cost o lending

has also impacted the non-bank lending

sector, which saw Westpac swallow Rams

Home Loans in 2007 and Commonwealth

Bank take a 33 percent stake in Aussie Group

in 2008.

It is anticipated that urther consolidation

in the sector will continue, with Wizard

being the latest brand to be acquired by

Aussie Group. As the banking and nance

market continues to suer, brand portolio

management will become a greater

challenge or a number o companies.

Nevertheless, despite the nancial crisis,

Australian banks are among the best

capitalised and highest rated in terms o

credit quality, and they continue to reinorce

their reputation as some o the strongest

banking brands in the world.

Macquarie Group, one o the ranking

standouts, has exhibited considerable

growth and resilience with its innovative

investment banking model. The model

provides signicant opportunity or

expansion o the brand into new nancial

products and overseas investment markets.

Local challengers Babcock & Brown,

Allco Finance Group and MFS (re-branded

Octaviar) have not proven as resilient.

Retailing

The Australian retail sector, including

anumberofmajordepartmentstore

and grocery brands, has also undergone

signicant changes. The perormance o

the sector has generally been very robust.

However,morerecently,protforecasts

have been hit by a collapse in consumer

sentiment and the revised 2009 - 2010economic outlook.

Coles Myer has been disbanded, now that

Myer has been purchased by private equity,

and the remainder o the Coles Group

business and associated brands have been

sold to Wesarmers.

Woolworths has gone rom strength to

strength, capitalising on the management

and ownership changes o its major rival,

while also taking the opportunity to re-crat

its visual identity and solidiy its superior

brand proposition.

David Jones has made great strides amidst

the turmoil o the Coles Myer divestiture.

It is now enjoying the spoils o consistent

investment in its store ootprint and

environment, and it is securing key premium

and luxury brands to cement its leading

position as the House o Brands or

Australian department store shoppers.

The eective use o Australian supermodels

Megan Gale and Miranda Kerr has also

reinorced David Joness premium brand

positioning in the ongoing Australiandepartment store wars.



17/36

Like Coles, Myer is currently in a turnaround

phase and is expected to challenge its

major rival David Jones with prot in 2007

up 40 percent ater a number o years o

underperormance. Myer has ought to

maintain its quality positioning, with a ocus

on youth and a broadening o its product

oer to encourage mainstream appeal.

The consumer retail sector, however, remains

under considerable pressure.

As levels o consumer demand continue to

deteriorate, the shit to provide greater value

to consumers will be key to David Jones and

Myer maintaining growth. To do so without

compromising the premium positioning that

distinguishes them rom the likes o Target

and smaller high street retailers will be just as

critical to their continued success.

The Best Australian Brands table has also seen

the emergence o JB Hi-Fi and the continued

dominance o home appliance and electrical

goods retailer Harvey Norman.

A high Australian dollar and continued

marketing support o the brand during the

past our years have seen Harvey Norman

expand aggressively both in Australia and

overseas. Its prots reect consumer desire

or the latest in electrical goods, advancements

in computer technology and the aordability

o imported households items. Harvey Norman,

like all retailers, continues to ace the stress o

the economic downturn and must continue

to build the value proposition o its oering

to customers.

JB Hi-Fi, a newcomer to the Best Australian

Brands table, has proven a surprise competitor

to Harvey Norman. Its brand positioning

as a discount but expert music and electrical

goods retailer has insulated the brand rom

the harshest aects o the slowdown.

Stretching the brand, rom music and MP3

players into home entertainment, andcontinuous expansion into other household

goods has also widened its appeal and

mitigated some earnings risk.

JB Hi-Fi sales rose by an impressive 43 percent

to A$ 1.8billion in 2008. Ater an impressive

rst hal in 2009, there is urther prot growth

orecast despite the deterioration o consumer

sentiment and the potential that Australia

may enter a period o recession.

Airlines and travel

The airline industry is tough and volatile.

Qantas, Flight Centre and Virgin Blues

ortunes have all been heavily reliant

on the previously buoyant domestic and

international economic conditions.

Due to the difculties in accurately assessing

the brand value o airlines based upon

publically available inormation, Qantas,

Jetstar and Virgin Blue have been excluded

rom nancial analysis in our study.

Nonetheless, Australian airline brands playan important role and we have included them

in our commentary. In recent times, we have

seen the industry recover rom global security

and health threats. Combined with a strong

local economy, this has propelled the expansion

o the business and leisure travel markets.

Previously buoyed by a rise in the Australian

dollar, the industry has beneted enormously

rom increased discretionary spending.

Qantas has been able to capitalise signicantly

on its dual-brand strategy in this period.

Now Qantas plans to withdraw rom the

NZ domestic market, but will instead launch

Jetstar with a eet o new A320s, ying

more routes than Qantas was servicing in

competition with Air NZ and Pacic Blue.

Jetstars low cost base could well place

extreme pressure on the other carriers.

The introduction o new-to-market brands

Jetstar, Tiger and V Australia has also

created more options or Australian domestic

and overseas travelers, resulting in an

increase in routes and a reduction in ares.

The rise in competition has driven a visible

dierentiation, creating a clear low, middleand premium segmentation to service the

needs o consumers.

Qantas has since overhauled its rst and

business class lounges, and modernised its

eet with the acquisition o new Boeing 787s

and Airbus A380s designed to improve

patronage and reduce long-haul uel costs.

Qantas has also revitalised its visual identity

through a rebrand to complement these

investments in premium travel acilities.

At the height o the oil spike in 2008, high

uel prices worked to decimate Virgin Blues

prot, which was down 55 percent rom2007. Qantas was able to weather the storm

with prot up by 44 percent, and holiday

and travel services provider Flight Centre

improved by 38 percent year on year.

Television media

Australias three large commercial networks

have undergone signicant changes in their

structure and operating environments.

In particular, the Nine Network is no longer

under the control o the Packer empire.

Its Publishing and Broadcasting Limited

business was broken up and the majority

o the media assets including the television

stations sold into private equity through

PBL Media.

Similarly, the Seven Network has experiencedmajor corporate structural change, with

Seven Media Group ormed in a joint venture

with private equity to house its television,

magazine and internet interests.

Media ragmentation, technological advances

and the changing viewing habits o mass

audiences have drastically altered the way

people consume inormation and, specically,

advertising and brand communications.

The advent o online media and digital content,

and the need to converge and integrate

old media with the new have also created

innovative partnerships linking Seven with

digital platorm Yahoo! and similarly Nine

with Microsot.

Ten has continued with its strategy to target

youth, while the ratings decline at the Nine

Network has resulted in the Seven Network

taking the coveted number one position.

As consumer spending continues to slow,

media industry cash ows are expected to

ollow suit as the reduction in advertising

revenues begins to bite. The slowdown has

already aected the earnings o one majornetwork, with Network Tens prot alling

by approximately 25 percent.



18/36

Best Australian Brands 2009

2009

RankBrand Sector

2009 Brand Value

A$ Million

1 Telecommunications 9,700

2 Banking / Financial Services 7,100



5 Retail 4,600

6 Banking/Financial Services 3,200


8 Apparel 2,200


10 Retail 1,300

11 Postal and Logistics 900

12 Retail 760

13 Retail 670

14 Travel 630

15 Gaming 560

16 Manuacturing 500

17 Share Registry Services 380

18 Utilities 220

19 Retail 190

20 Banking/Financial Services 150



19/36

9,700 A$m 7,100 A$m

5,100 A$m

NATIONAL AUSTRALIA BANK (NAB) is one

o Australias largest banking and nancial

services organisations. NAB provides a broad

range o comprehensive and integrated

nancial products and services through its

various units. These include NAB with MLC

in Australia, Bank o New Zealand, Clydesdale

and Yorkshire banks in the UK, and NABCapital

in its global institutional markets and services

business. Ater the negative publicity generated

during the trading and board scandals o 2004,

NAB has aggressively sought to reposition the

brand to counteract any lingering reputation

and image challenges. In 2006, the new NAB

brand identity was unveiled with a renewed

ocus to reurbish branches, retrain and

engage sta, improve services and introduce

new and more competitive nancial services

and products. Accompanying communicationscampaigns sought to breakdown even urther

the bureaucracy and previous negative

associations in the bank, reecting the brand

journey o an organisation ghting back rom

adversity. These changes have allowed NAB to

become more approachable, open and riendly

to sta, suppliers, government and consumers.

Further reinorcing this re-positioning, NABs

current A$ 32.6 million marketing expenditure

involves major advertising campaigns such

as Climb Evry Mountain and nab a small

word or a big lie have continued to build

afnity with consumers. NABs investment

in sponsorship with the AFL and 2006

Commonwealth Games also contributed

to introducing NABs positioning changes

successully, engaging stakeholders and liting

its brand health measures. More recently,

NAB has suered a number o write-downs

associated with its exposure to the global

credit crunch, recording its rst negative

result since 2004, with the 2008 group result

taking a substantial hit rom a A$ 2.7 billion

provision or bad debt. As economic conditions

and nancial markets continue to deteriorateand hamper the perormance o all the major

banks, NAB and its contemporaries will need

to position themselves strongly or the

expected tough times that lie ahead.

1 2

3

Australias Best Brands 2009

TELSTRA. Since the ull T3 privatisation in

2006, Telstra has identied a large opportunity

or uture growth in the Australian

telecommunication industry. Telstras vision

is to build on and enhance its position as the

leading ull service telecommunications and

inormation Service Company in Australia, as

well as to expand its presence internationally.

Telstra has orged a path or itsel as the clear

brand leader in many sectors. It is the only

media and inormation services company

in Australia that provides its customers

with a truly integrated telecommunications

experience across xed line, mobiles,broadband, inormation, transaction,

search and pay TV. Under CEO Sol Trujillos

stewardship, Telstra has continued to exploit

its scale advantage by creating and integrating

partnerships with its sub-brands and various

third parties, including handset providers,

media partners and mobile retailers.

This integrated eort orms the cornerstone

o Telstras transormation strategy to move

customers onto upgraded internet and

wireless phone networks. Mobile advertising

has signicant uture growth potential

with the introduction o WAP and 3G phone

services and the increasing demand or

internet and data transer services on mobile

phones. Telstra reported that mobile service

revenues grew 12.3 percent or the year,

while mobile data growth shot up 44.1

percent. Rich content and data services orm

a key domestic and international revenue

plank or the uture. With ambitions to be

seen as much more than just Australias

largest telecommunications services provider,

Telstra have the opportunity to impact the

lives o all Australians in the wider cultural

landscape, and deepening its inuence by

becoming a global telecommunications orce.

CBA. The Commonwealth Bank o Australia

(CBA) remains the number one bank brand in

Australia. CBA has managed to not only hold

o the competition, but continue to build

their brand despite potential threats such as

the slowing economy and ongoing pressure

on banks due to the credit crunch. CBA has

achieved outstanding results through its

continued ocus on delivering products

customers want and a concerted eort by

the brand to improve customer service. This is

backed by a commitment o A$ 580 million over

the next our years to upgrade its technology

systems to improve efciency and service.

While many o the banks struggle to nd

dierentiation, CBA has sought to reposition

itsel and bring its service experience to

lie through the proposition Determined to

be Dierent. With scale and a diversied

business mix core pillars o the groups

oering, in 2008 CBA bought the BankWest

brand rom HBOS as well as a 33 percent

interest in mortgage broker Aussie. CBA

continues to build its strong reputation with

active involvement in the community via high

prole sponsorships such as Cricket Australia,

The Australian o the Year Awards and the

Commonwealth Bank Foundation.

Telstras mobileservice revenuesgrew 12.3 percentor the year,while mobile data

growth shot up44.1 percent.



20/36

4,600 A$m

WOOLWORTHS. Despite the economic

downturn, Woolworths remains in pole

position as Australias largest grocery retailer.

CEO Michael Luscombe has built ormidable

market share and year-on-year sales growth.Woolworths continues to drive a wedge

between itsel and its major rival Coles as

it tries to reinvent itsel or the renewed

challenge ahead. Woolworths not only has

a strong management team and an excellent

reurbishment strategy in place, but it also

has the exibility in its business model that

other competitors do not, to counter the dual

threat o an economic slowdown and the

entry o oreign supermarket competitors.

As the growth o IGA, Aldi and Costco

continues, and the divesting o Coles to

Wesarmers progresses, retail supermarkets

are now competing more aggressively,especially with the trend towards higher

margin own label brand oerings. Woolworths

Home Brand and Woolworths Select have

been a tremendous success in the private

label segment, and store brands will play

a greater role in generating revenues or

the supermarkets during the downturn.

Staple oods and basic commodities are alsonot expected to aect revenues, unlike the

impact o the slowdown in more discretionary

categories. A marketing budget o over

A$ 100 million ensures Woolworths is

well-poised to roll out its rereshed brand

identity across all key customer touch points.

Just as the Saeway brand is phased out in

Victoria, Woolworthss ownership o the

positioning o the resh ood people in this

increasingly competitive retail environment,

will only serve to reinorce its ocus on its

customers. Woolworthss new identity

communicates positive values to customers

with associations to resh, simple, interestingand modern. All o this suggests a more

positive shopping experience and a renewed

ocus on reshness and quality.

5

Oering extendedhours and fexibility

or its customersand sta, its brand-aligned culturewill ensure thatWestpac maintainsits brand leadership.

4,800 A$m4

WESTPAChas maintained its prole and

reputation as one o Australias best

managed and largest nancial services

companies. Remaining steady in the ace

o the global nancial crisis, Westpac

continues to increase its brand value

through maintaining best practice in

corporate social responsibility and its

commitment to customer service.

Oering extended hours and exibility or

its customers and sta, its brand-aligned

culture, under newly anointed CEO Gail

Kelly, will ensure that Westpac maintains

its brand leadership and continues togrow in strength. Recognised as one

o Australias best corporate citizens,

Westpac has won numerous reputation

awards due to its sustainability policies

and corporate social responsibility

practices. With the approved St. George

merger expected to take shape in 2009,

Westpac aims to continue to drive a strong

customer culture and implement

compelling customer segment strategies.

These will serve to continue to generate

revenue and prot growth amidst a very

dierent and challenging banking

landscape. The credit crunch and changing

conditions in the market have also impacted

the key communications messages rom

the banks, prompting them to position

their brands less aggressively around

growth and more conservatively around

saety, stability and security o deposits

and preservation o investment in nancial

products. The St. George merger willservice 10 million customers and create

Australias second largest banking entity.

Westpacs prudent reputations and AA

rating will ensure it can maintain its

strong position as the banking and nance

industry aces urther economic and

nancial headwinds in 2009.



21/36

2,200 A$m

BILLABONG. The board sports clothing

market has experienced phenomenal

growth over the last decade. Billabong has

successully leveraged the brands heritage

and place in Australias unique surng culture

to stretch into new customer segments,

categories and geographies, becoming the

worlds largest surng and board sportsapparel brand. Recent diversication o the

product range into skate and snow categories

will deliver a more stable platorm or growth

providing the strength to combat major

rivals Quicksilver and Rip Curl. Billabongs

consistent strategy o building credibility

by sponsoring major sporting events and

orging relationships with respected sports

stars in the sur, skate and snow segments

has also helped propel the authenticity o the

brand across new generations. By moving

the brands ocus rom the male-dominated

surng culture to board-sports inspiredactivities, innovative unisex liestyle

accessories and leisurewear, Billabong has

been able to engage more diverse consumer

segments and reinorce its position.

A commitment to continual investment in

product design and innovation has also

ensured that the brand has remained both

relevant and contemporary. Billabong has

also aggressively expanded internationally

into North America and Europe, and it is now

becoming increasingly popular in Eastern

Europe in both urban and regional areas.

It may need to manage its exposure to theUS and emerging economies where growth is

expected to slow, however, a lower Australian

dollar will no doubt assist them in their quest.

8

3,200 A$m6

MACQUARIE GROUP is the preeminent

Australian investment banking brand.

Despite the nancial crisis, the collapse

o the investment banking system on

Wall Street, and the plight o its local

rivals, Macquarie continues to thrive

through its brand mantra o innovation

and the diversity o its business model

and operating activities. This unique

mix o business strategy, attracting

and rewarding the best human capital,

and access to nancial markets has

underpinned an extraordinary growth

trajectory. The Macquarie brand hasbeen built upon its expertise, strong

relationships, unique product oering,

and its rising status as a result o consistent

perormances in the nancial services

sector. The Macquarie brand communicates

what it will deliver inspired and

innovative solutions to difcult nancial

problems. In the last number o years,

Macquaries success and its willingness

to prove the doubters wrong has allowed

it to mature into a global investment

banking brand and diversied nancial

services group, providing banking,

nancial, advisory and investment

services to investors, corporations and

governments. Macquaries strength and

reputation has grown as a result o its

ability to match its ambitions with an

innate ability to deliver results and

outperorm sometimes much bigger and

more established international investment

banking rivals. Macquarie Group now

has more than 60 ofce locations across

25 countries, and continues to establish

itsel as a venerable name amongst the

investment banking elite in the worlds

major nancial centres. Macquarie Groupsmodel has, however, come under some

pressure as a result o deteriorating asset

values due the de-leveraging o the global

economy through the nancial crisis.

The test or Macquarie will be to leverage

its hard earned reputation and leadership

credentials in continuing to innovate, while

consolidating the brand in the challenging

and diverse markets it operates. Only time

will tell i Macquarie Group can continue

to withstand the banking and nances

industrys greatest challenge.

The Macquariebrand communicateswhat it will deliver inspired and innovativesolutions to dicultnancial problems.

3,100 A$m

ANZ. Despite the global nancial turmoil

and the merger and acquisition activity o its

nearest rivals Westpac and Commonwealth

Bank, ANZ continues to pursue its long

term strategy o organically growing its

brand ootprint into the Asia- Pacic region.

Through an aggressive expansion in retail

branches and via a number o joint ventures

with Asian banks, ANZs push into the Asian

market is perceived by some to be high risk.

However, growing the brand internationally

could provide ANZ with a major competitive

advantage over its domestic rivals whose

presence is not nearly as strong in the Asianmarket. Despite oshore risks, ANZ is still

eyeing Asia as the source o 20 percent o

earnings over the next ve years ater the

division grew earnings by 52 percent in scal

2008. In order to support its strategy ANZ

has invested in the highest share o voice

o the big our, investing $46.6 million in

marketing and advertising expenditure in

2007. Domestically, ANZ has been prominent

in mortgage lending, securities, margin

lending and institutional banking, however

as the property boom recedes, and economic

conditions generally deteriorate as a result

o the credit crisis, ANZ has suered its rst

prot all since 1998. Furthermore, ANZs

relationships with various securities lending

clients and subsequent bad debt provisions

have caused some harm to the brands

reputation. In responding to the global

nancial crisis impacting on local operations,

ANZ is actively looking to protect its image

by applying a more rigorous and conservative

approach to lending and in its application to

risk management procedures in the uture.

7



22/36

1,300 A$m 900 A$m

HARVEYNORMAN.The previously high

Australian dollar, the explosion in popularity

o personal media devices and the adoption

o digital TV have driven consumers to

electrical goods retailers in their droves.

A commitment to stock the highest selling

brands and a successul ranchise strategy

has enabled Harvey Norman to grow revenues

and increase market share to become

Australias dominant consumer electronics

and homewares retail brand. Harvey

Normans comprehensive product mix,

strong customer value proposition and

aggressive marketing and communicationssupport have consistently delivered superior

brand perormance across the wider market.

However, the alling Australian dollar

and the economic slowdown have aected

the orecast outlook or Harvey Norman.

As a well-known counter-cyclical advertiser,

typically increasing ad spend during times

o slowdown in order to gain market share,

Gerry Harvey has revealed he is to cut his

A$ 300 million marketing and advertising

budget by at least 20 percent and he is to

close a number o under-perorming stores.

All this could spell harder times ahead or

the retailer.

AUSTRALIA POST. A exible and diverse

business model has allowed Australia Post

to address the threat o electronic

communication and declining traditional

post volumes by ocusing on growth

rom the globalisation o small business.

By staying at the oreront o innovation

in the post and logistics industry, Australia

Post has been able to maintain its brand

leadership in Australia and end o the threat

o larger global business logistics competitors.

At the same time, Australia Post has also

broadened the scope o its oering. With the

acquisition o Star Track Express, AustraliaPost has expanded its non-core services

and continued to enjoy strong results.

Post Logistics has emerged as another

source o high growth or its B2B services

division. However, the collapse o Australia

Posts extension Post Bill Pay damaged

the brands credentials in the internet

services market. As a ubiquitous brand

in Australia attempting to modernise its

persona, the recent Part o Everyday

campaign has positioned the brand as more

contemporary and relevant, breathing new

lie into the Australia Post brand.

10 111,900 A$m

ST. GEORGEs commitment to service,

personal attention and the development o

close relationships with customers is one o

its main competitive advantages compared to

the big our banks. These strengths include

a track record o positive credit quality, high

sta engagement ratings relative to the

industry, and excellent product management

and innovation capabilities. St. George also

strives to play a positive role in the

community by supporting charities, the arts,

sporting clubs, business programs and

disaster relie initiatives. While St. George and

Westpacs merger will create one o Australiaslargest nancial services companies or

customers, shareholders and employees, the

challenge post merger will be to ensure that

the St. George brand maintains its unique

positioning. It must continue to live up to

its reputation as the riendly bank next door

through its Good With People, Good With

Money position. The strategy to be big but

look small in the eyes o customers has been

St. Georges key strength, with the brand

claiming that superior customer service and

a personal approach to business will remain

as the St. George brand continues to operate

as a separate brand entity. St. George also

hopes to grow organically across Australia

while harnessing the potential in its existing

brand strengths and capabilities. The global

nancial crisis and the roll-on impact o

a slowing Australian economy are also

negatively aecting the banking market,

with the ability to supply quality credit

steadily deteriorating and threatening the

long term viability o a number o smaller

competitors. Now that St. George is part o

Westpac, and with consolidation expected to

continue in the banking and nance industry,

to sustain its growth ambitions it will bemore important than ever or St. George to

keep its unique identity and not be seen by

consumers as just part o the big our.

9

The strategy tobe big but to looksmall in the eyeso customers has

been St. Georgeskey strength.

760 A$m12

DAVID JONES has reinorced its position

as Australias premium department store

brand. The brand has achieved this

position via an unwavering ocus on

supplying high calibre branded products,

providing excellent customer service, and

consistently communicating its rst class

status and leading reputation or quality.

Through this strategy, David Jones has

built higher margins by oering exclusive

supply deals with premium brands and by

investing in current and new stores to

create a more luxurious retail brand

experience. To consolidate its position,

the retailer has successully established

exclusive supply agreements with over

50 new brands, some o which were

previously stocked at major rival Myer.

The use o Australian supermodels

Megan Gale and Miranda Kerr as David

Jones brand ambassadors has also

reinorced David Joness credibility

and premium brand positioning in the

ongoing Australian department

store wars. David Jones has dominated

the competitive retail environment

in recent years and it has delivered

strong year on year store sales growth.

With the Australian economy

experiencing an economic downturn,

it will be challenging or David Jones

to sustain such high historical growth,

however, the brand is well positioned

to maintain its leadership status.



23/36

630 A$m

FLIGHTCENTRE. Unpredictable events

such as threats to global security, rising oil

prices, economic volatility and uctuations

in exchange rates have always hampered

the global and domestic travel industry.

However, Flight Centre has continually

emerged rom these threats to be the leading

provider o travel solutions through its

commitment to demonstrating its lowest

airares guaranteed value proposition

alongside its exible and responsive business

model. Flight Centre was quick to recognise

the movement o customers researching and

paying or travel services on the internet.

As consumers migrated online, Flight Centre

has capitalised on the growth o its customer

base in Australia and overseas through an

innovative combination o retail and online

brand strategies. Extensive employee

training programs have resulted in Flight

Centre becoming an employer o choice,

voted as one o the best 100 places to work.

Its A$ 2.4 million investment in adventure

travel brand Intrepid has allowed it to enter

the niche travel

Documents

Best Australian Brands 2009