Best Brazilian Brands 2011

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BestBrazilianBrands 2011

The new age ocorporate citizenship


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2.

Brazilian Brands:A relection behind

the igures

BY ALEJANDRO PINEDOManaging Director o Interbrand Brazil

Once again, we are pleased to present Interbrands

Ranking o the Best Brazilian Brands.

Throughout the years, we have tried to make clear that what

is learned with this analysis is more important than the values

announced in this ranking. As in the previous rankings, most

brands we have ollowed up have increased their value, but we

can state that, this year, the Brazilian ranking has reached a

dierent level. In 2010, the qualication score o our ranking

was R$ 87 million, while this year Hering, occupying the twenty

th position, is worth R$ 209 million. This surely is a reectiono the economy's growth and o the experience gained by the

brands through the hard and restless work o their managers.

With the consolidation o big mergers and acquisitions

throughout the year, we have noticed that some categories

have become stronger and that new players have joined the

game, such as the brands Po de Acar, Extra and Casas

Bahia. This activity ended up moving the segments that

still have a lot to do in terms o brand; and companies such

as Gasa and Lopes, or instance, are no longer among

the top 25, although their brand value has increased.

As our brands become stronger, the discussion about when

Brazilian brands will be among the hundred most valuable

brands o the world still remains. But they still lack visibility,

recognition and, most o all, international presence.

In 2011, our ranking brings an attentive look at corporate

citizenship, one o the essential elements to build the strength

o a brand. The idea here is to speak about the posture we see

in our clients, about the practices that generate changes and

about the perception o what these changes are, based on the

relevance o this subject or both the B2C and the B2B markets.

All this is supported by a big quantitative analysis,

prepared along with Hall & Partners, which was

presented at Harvard University at the end o 2010.

With 5,527 consumers and 1,861 buyers interviewed in sixcountries [including Brazil], our study has observed that the

behavior o consumers and purchasers is signicantly impacted

by the practice o corporate citizenship. The next reection

will be based on proving that the relation between corporate

citizenship and purchase decision is actually very low [average

o 2%]. We still have to know how our managers will deal with

this omnipresence when building value to their brands.


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Table o Contents

06 The Interbrand method or brand valuation

08 What makes a brand strong?

10 The 25 Best Brazilian Brands 2011

20 Analysis by segment

22 The new age o corporate citizenship

24 How to apply theory to the practice o building brands

37 Conclusion


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4.

The Interbrand methodor brand valuation

Interbrand has analysed over 5,000 brands in the last 25years in all business segments o the world and holds a clearposition o leader and innovator in this subject.

This richness o practical knowledge provides the base or our

rankings, both globally and in specic markets, as global and local

rankings observe criteria according to geographic or sectorial

nature o the study.

We have analyzed the brands under the nancial perormance

stem point, measuring their ability to capture the preerence o

consumers and the probability to generate uture revenues.

Our method assesses brands as nancial analysts assess any other

asset: based on the orecasted revenues that assets are able to

generate throughout time

Our method assessesbrands as inancialanalysts assess anyother asset.

To be part o this ranking, the brand must observethe ollowing criteria:

1. To be originally rom Brazil

This means that oreign brands

operating in Brazil (e.g.: Santander)

are excluded. Brands created in

Brazil, even i currently controlled

by oreign capital (e.g. Vivo),are eligible.

2. Publish nancial inormation

The company must be listed

in the Stock Exchange or must

have nancial inormation

available.

3. Identiy the individual

revenue o your brands

The company must provide enough

inormation to the market in

order to allow determining the

individual nancial results o each

o its brands.

This means that companies with

several brands, whose consolidated

nancial details cannot be listedby brand, are not eligible to the

ranking (e.g.: BR Foods).

4. Generate positive EVA

(economic value generated

ater the company remunerates

all the capital invested)

Companies with negative EVA due

to operational reasons or because

they have high cost or the capital

used are not eligible to the ranking.

5. To be well-known in

its main markets

About airlines

As o this year we have excluded airline

brands rom the ranking in order to

observe Interbrands global criteria.

The reason is that the analysis o the

capital employed these companies

might be imprecise due to the

characteristics that specic operations

o this segment, such as the leasing

o aircrats, have in their value.


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Financial Analysis

Our assessment approach begins with the

orecast o current and uture revenues

that can be assigned to the products or

services that use the brand. As a rst

step we subtract the operational costs

and taxes o this revenue in order to

calculate the revenue share that is directly

associated with the brand. We then

deduct the remuneration o the capital

employed the operation to identiy the

economical earnings o the business.

The whole nancial analysis is based

on public inormation available and the

orecasts are made based on reports

rom well-known and respected

nancial banks and analysts.

Role o Brand

This is the measurement o how the

brand inuences the demand during the

purchase process. Such measurement

is then applied to the economical

earnings to get to the prot generated

only by the brand (brand prots).

The Role o Brand or each industry

segment is dened based on

Interbrands database, which counts

on over 5,000 valuations perormed

throughout nearly three decades. We

have dened individual criteria to the

brands considering the benchmarks

and their respective industries, which

helps us to dene the role a specic

brand plays within its category.

We know, or instance, that the

Role o Brand is traditionally higher

or luxury brands than it is or the

brands in the commodities industry.In this specic case, the brand, and

no other actor, surely is the main

reason in the choice o consumers.

Brand Strength Analysis

This is the measurement o the ability

a brand has to secure demand and

prot throughout time. The strength

o a brand is dened in a scale rom 0

to 100, where 100 is perection, based

on the evaluation o 10 dimensions

that are responsible or its activation.

Capturing the preerence o consumers

talks about ensuring loyalty, repurchase

and retention, thereore securing uture

prots. Our methods enable to nd a

discount rate to adjust the orecasted

brand prots to the risks, based on the

request level this brand is able to ensure.

In 2010 Interbrand updated the

Brand Strength analysis methodology

aiming to consider important changes

to the Market environment.

What has changed?Now there are 10 actors responsible or

the Brand Strength: Authenticity, Clarity,

Commitment, Protection, Responsiveness,

Capacity, Consistency, Dierentiation,

Relevance, Presence, and Understanding.

Why has it changed?

The introduction o new actors to the

Brand Strength responds to the need to

adapt the brand valuation methodology

hat had been used. Today we also consider

components associated with changes to

the social and economic environments,

such as corporate citizenship, products

design, protection, social medias, etc.

$NOPAT(Capital employed X WACC)

ECONOMICS EARNINGS

Operational Results

Taxes

Economics earnings

Role o Brand

BRAND EARNINGS

Brand prots

Brand Strength

Discount rate

BRAND VALUE

Note:

The brand values o this ranking cannot be compared to the Best Global Brands, as the Brand

Strength analysis is done by comparison to direct competitors o Brazilian brands.

Brand Value

The value o a brand is the nancial representation o the business earnings resulting rom the demand generated by its products and

services. The parts o the calculation process nally complement each other when the prots orecasted by the nancial perormance

are multiplied by the Role o Brand, resulting in the Brand Earnings. We have adjusted the Brand Earnings using their own risk rate

(net present value). By doing so we get to the Brand Value, which becomes a key perormance indicator or the strategy and is used

as measurement to all brand activities and investments.


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6.

What makes a brand strong?

We can surely state they are desired, recognized, recommended,

sales leaders, responsible, long lasting, coherent. All that and more.

With all the resources o a world that is ruled by the digital appeal,

markets that are more and more connected and an aggressive

oer o products and services that are extremely similar, the task

o building brands that stand out and conquer territory in the

consumers preerences becomes more complex and more and

more interesting. The work becomes even more challenging in a

scenario ruled by ull accountability, in which the word o the day

is return on investment in this case, ROBI (Return On Brand

Investment). The demands made on brand managers are stricter

and stricter and the time to present results has shortened. To

know exactly where and how to invest limited resources to provide

strength to one or several brands becomes an obligation o allcompanies, regardless o their actuation segment. And knowing

what exactly surrounds this perception o strength is extremely

relevant when critically analyzing investments and, o course,

the brand results.

The strength o a brand is basically measured by its ability

to generate return in the uture. For that to happen, its

perormance must be above average and, preerably,above its competitors in ten dimensions. Individually,

each o these dimensions is essential in the process that

provides strength to a brand, even i the role played is small

when analyzed in comparison to the whole process.

Brands are valuable assets, and the responsibility o all the

people and departments o an organization. Managing them is

a permanent job, with challenges and achievements that must

be periodically considered, assessed, adjusted or rebalanced.

The Brand Strength is the result o the conuence o such

eorts and o investments in all aspects not only nancial

which are worth making. This will lead to sure return.

Much is said about building strong brands. This is what all big companies aimto. But what are these brands and what do they do to obtain such strength?


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Best Brazilian Brands 2011

There are 10 dimensions:

Authenticity

To start with, a strong brand must be authentic. It must be

based on an internal truth, inheriting rom its creators welldened and ounded values. It must be able to meet the

expectations o its target audiences, occupying a totally

legitimate position in the vast consumption repertory.

Clarity

Strong brands are clear concerning what they

represent, their position and their value proposal. All

that must be articulated in such way that a constantly

increasing number o individuals can notice the various

dimensions when they see or hear about this or that

brand. Considering the saturation o commercial

messages that are received rom various channelssimultaneously we receive about a thousand o

them every day and the prolieration o all sorts o

stimulation that ood our modern routine, being

clear in what is communicated is mandatory.

Commitment

Counting on the commitment o the whole organization

is essential to dene strong brands. The degree o such

commitment can be measured by the support each brand

receives in terms o time dedicated to it, its inuence in

the companys business decisions and also the continuous

nancial investment received. The brand must be the

ocus o consideration and it also plays the essential role

o guiding initiatives in all company areas.

Protection

The intensity o the protection received by the brand

is also essential. Such protection can be perceived

in dierent ways: actual legal aspects, registrations,

intellectual property, etc. o identity elements as

the logo and packaging in the universe where the

brand is geographically present and signicant.

Responsiveness

Another characteristic that provides greater strengthto the brand is its responsiveness. This is the ability

to respond to changes or to proactively create

opportunities, guided by a leadership eeling and the

desire to constantly improve, renewing itsel. This is

also where we t corporate citizenship initiatives or

practices. This dimension is not less important and it

has become so relevant in the brand building routine

that it received a separate chapter in this study.

Consistency

The consistency in the application o all the brand

elements, the degree in which its promise is perceivedwith no ailures throughout all the points o contact

is also important. We are not only reerring to visual

or graphic elements, but to all expressions, at themost various points o contact. It can be the phone

call o a salesperson, spelling mistakes in a ier,

an experience at a point o sale, the visual aspect

o a person who represents the brand beore the

clients or the tone o voice in communication.

Dierentiation

Although it is obvious, the dierentiation o a brand

concerning the market oer is an important actor to add

strength and it is also an objective that is harder and

harder to achieve. Here, the maxim o being the category

leader or inventing a category o which you can be theleader is applicable. The various shades o perception

that clients or consumers have o a brand whose position

stands out denes a well-delimitated proprietary territory,

and builds a ortress. It is worth insisting in this pursuit.

Relevance

Relevance or the perect adaptation to the needs,

desires and choice criteria o clients and consumers in

all demographic groups and geographic markets also

represents an important work ront to add strength to

brands. Being dierent is not enough, it is necessary to

be dierent or a reason that interests all the strategic

audiences, generating loyalty and recommendation in

order to widen penetration o a wider range o individuals.

Presence

Presence addresses how much a brand is seen as

omnipresent and is mentioned in a positive manner by

its clients and consumers, employees, opinion makers

and social networks. This is one more example o the

difculty created by the dissemination o means o

communication and social networks. Being present

with positive associations has more and more become a

characteristic o strength or winner brands. Denitely,

we notice that the quantity actor alone is not enoughto contribute to the generation o brand strength, and

the volatility o communication today demands greater

governance, quality and responsibility, in any maniestation.

Understanding

At last, the understanding o a brand is an important

strength actor. The brand that goes beyond recognition

, being able to reach among its clients, consumers and

employees the deep understanding o its specic qualities,

surely has advantages and generates more strength, which

is reected in loyalty, recommendation and reputation.


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8.

Amounts in millions o R$

The 25 Best BrazilianBrands 2011

ItaR$ 24,296Segment: Financial

Services01 +18%

BradescoR$ 13,633

Segment: Financial

Services

02+10%

PetrobrasR$ 11,608

Segment: Energy

03+7%

Bancodo BrasilR$ 11,309

Segment: FinancialServices

04+8%

+10%

SkolR$ 7,277

Segment:Food&drink05 +22% NaturaR$ 5,666Segment: Cosmetics06 +21% BrahmaR$ 4,351Segment:Food&drink07

Legenda

Debutranking 2011

Value increaseem incomparision to 2010

Value decrease incomparison to 2010


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*not present in the 2010 ranking

AntarcticaR$ 2,013

Segment:Food&drinks09 +15% VivoR$ 1,700Segment:Telecommunication

10 +16%

RennerR$ 835

Segment: Retail11 +7% LojasAmericanasR$ 703Segment: Retail

12 +17% EmbratelR$ 619Segment:Telecommunication

13 -15%

CieloR$ 604

Segment: Services14 CaixaEconmicaFederalR$ 563

Segment: Financial

Services

16

ExtraR$ 496

Segment: Retail19

CyrelaR$ 587

Segment: Real Estate15 +8%

+9%

OiR$ 514

Segment:

Telecommunication17BanrisulR$ 501

Segment: Financial

Services18 -22%

+45%

HeringR$ 209

Segment: Clothing25

BraskemR$ 422

Segment:

Petrochemical

21-6%

+10%

NetR$ 323

Segment:

Telecommunication

23

Vale*R$ 2,656

Segment: Mining08

CasasBahiaR$ 447

Segment: Retail

20

Po deAcarR$ 389

Segment: Retail

22Ponto FrioR$ 232

Segment: Retail24


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10.

In 2010 the bank nally let the merger

behind when the integration o the

branches and the remodeling o several

branches was completed, observing

a new architectonic model thatinaugurates a trend in the segment;

and it still had record prots. The gain

in brand experience and revenue was

signicant, but set a series o challenges

brought by scale. It was elected again

by the Financial Times and the IFC the

most sustainable nancial institution o

Latin America and the emerging markets.

It is also at the top o the BACEN e

PROCON complaint rankings and its

efciency rates are lower than those

o its main competitors. Ita is aware

o that and ready to react, establishingcomplaint reduction targets, stating

that the customers satisaction is

the main challenge. The slogan "The

world changes. Ita changes with

you" highlights its restless posture and

indicates the innovative look o a brand

that preers to carry on challenging itsel.

Like a hurricane, Bradesco had an 18%

increase in the number o branches

throughout Brazil and it has delivered,

in practical terms, the message o the

"Presence" campaign to many other

points o contact. The signicant

investment in the network is aligned

with the strategy that contemplates

banking inclusion and democratization

o credit to all social segments.

Although it is surng on the countrys

consumption increase wave to maximizeits credit portolio, the bank maintains

quality and has low delinquency rates.

This posture has helped the brand to

conquer the preerence o new bank

customers. According to Dataolha, in

2010 Bradesco was the top brand in lan

houses and among the teen audience.

The innovation was also due to the

insurances area, which sells policies at

newsagents and insures houses in slums.

On the other hand, the non-aligned

speech o the segment concerning the

"Presence" speech generates a loss o

synergy in the construction o a consistent

image under the institutional stem point.

In 2010 the bank announced it will be

the master sponsor o the 2016 Olympic

Games in Rio. It will be interesting to

observe how the bank intends to activatethis opportunity aligned with "Presence".

Petrobras reaches the end o 2010

recognized as the third biggest energycompany o the world due to its market

value. Its presence in the imagination

and in the lie story o most Brazilians as

being a reason or national pride is even

more relevant to the current scenario,

where the Moment o Brazil is getting

ahead in international analysis.

This imagination has many times played

the role o an armor o Petrobras against

the risks that are part o the market it

works at. Today Petrobras invests in social,cultural, environmental and sports projects

and it is among the ew Brazilian

companies that are part o the DowJones sustainability index. The expansion

o exports will challenge Petrobras to

keep the strength o its brand in markets

where it is not known (let alone loved).

Having the energy market itsel

challenging its brands to impose a

pace that goes beyond its response

and innovation capacities, the

materialization o the delivery o the

pre-salt becomes essential to keep the

reputation o the brand Petrobras.

ItaR$ 24,296

Segment: Financial

Services

01 +18%

BradescoR$ 13,633

Segment: Financial

Services

02 +10%

PetrobrasR$ 11,608

Segment: Energy03 +7%


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The beer that desce redondo" or air and

square in English, signicantly increases

the brand value and its strategy ocused

on innovation. Ambevs innovation

department already represents over 15% o

the companys market share in Brazil, and

Skol represents most o these innovations.

In 2010 Skol executives decided to aim 15%

o the marketing budget to actions in the

internet. This is the biggest investment

already made by the brand in the digital

environment. Furthermore, the launching

oSkol Cinco, the rst 5-liter beer barrel

o the market, reinorces the alignment

between brand and product. For 2011 the

brand promises a beer that does not make

you eel stued. This distinction places Skol

as the 4th most sold beer o the world and

the most sold in Brazil.

With a 23% growth in market share and

an 18% growth in their total consultants

database compared to the previous year,

Natura remains as the lead brand in the

Brazilian market o cosmetics, ragrances

and personal care, as well as in the direct

sales segment. In 2010 alone, 191 newproducts were launched, supported by

a tough marketing investment [R$ 409

million], nanced by productivity earnings.

It is not a coincidence that Natura carries

on being the benchmark mentioned when

the subject is corporate citizenship.

One o the rst companies to apply the

concept in its business and brand practices,

Natura continues achieving new and

daring targets in the reduction o the

environmental impact o its operations,

besides consistently running the projectVer para Crer or Seeing is Believing,

reaching up to 5,690 schools in 350

Brazilian cities, involving over 450,000

people.

Banco do Brasil went through the year o

election and o the integration o Nossa

Caixa operations without turbulence.

It was the leader in branches in the high

competed state o So Paulo and it hasextended its clients database, which

includes the signicant share coming rom

the state Government and Judiciary Power.

It has beaten records in the granting o

credit and it is number one in the consigned

and rural credit modalities.

I in capillarity and credit it has enhanced

its vocation, Banco do Brasil has innovated

by launching the "Saque Sem" made via cell

phone, without using the bank card. The

surprise came with the announcement

o the signo o the gua Brasil program

intentions protocol and o its sel-denition

as the Bank o Water, a conusing

movement or a brand that traditionally

supports national sports and culture.

In the wave o the internationalization o

national companies it took advantage othe good moment to have Brazil as a last

name and it went away to araway lands. It

has acquired a participation in the Bank o

Patagnia and it has announced the

intensication o its presence in countries

o South America, Arica and Asia. Its

international acceptance will be a tough

test to its brand strength, which is ully

attached to the not always avorable

characteristics o the Brazil brand. Aware

o the challenge, the bank has increased its

marketing investments in 70% this year.

Bancodo BrasilR$ 11,309

Segment: Financial

Services

04 +8%

+10%

SkolR$ 7,277

Segment: Food&drink05

+22%

NaturaR$ 5,666

Segment: Cosmetics06


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Lojas Americanas are celebrating a 17%

increase in its brand value compared

to 2010. Physical presence and the

increase o sales, reected in the nancial

perormance, help the brand to conquer

greater importance and, thereore, value.

In 2010 the chain o stores, present in all

the regions o the country, opened 70 new

stores, 21 in the Express ormat. Paying

attention to the habits o consumers and

because o their desire or practicality and

convenience, Americanas has recently

adjusted the ocus on this modality, in

order to oer closer contact to customers

as well as a more relevant experience.

Today, the 541 stores are responsible or

the consolidated net prot o R$ 309.6

million in 2010, compared to the R$

176.1 million in 2009. It presents another

piece o relevant inormation with the

signicant perormance in e-commerce,

which since 1999 has been built

consistently, with ocus and good results

or the company. Through mergers and

acquisitions, Americanas gained efciency

and logistics, being able to expedite its

deliveries in several Brazilian regions.

Renner appeared in the ranking or the

rst time last year and it is still progressing

by taking wide steps, opening rom 12

to 15 new stores every year, innovating

in a smaller model consisting o stores

outside shopping malls, which until

then represented 90% o their presence.

It has strengthened its expansion in

the North and North-East regions

by supporting regional events and

promoting ashion shows. Part o thestrength o Renner comes rom its clear,

well dened and well indicated own

portolio at the points o sale. But its real

vocation is at the brand commitment

level with its clients: every year,

executives rom the headquarters in

the city o Porto Alegre spend one day

perorming essential unctions and

living the daily routine o the store, all

equipped with an "enchantometer",

where customers can maniest their

level o satisaction with the visit,

and annually the company publishes

and distributes to its employees a

book with real enchantment stories

told by the store salespeople. Thisyear Renner showed another side to

the Market, more aggressive, which

demonstrates its will to occupy other

markets by acquiring the bedding,

towels and table linen store Camicado.

RennerR$ 835

Segment: Retail11 +7%

LojasAmericanasR$ 703

Segment: Retail

12+17%

VivoR$ 1,700

Segment:

Telecommunication

10 +16%For Vivo, 2010 was one more year o

leadership. The top o mind brand

according to Dataolha and the most

reliable or mobile phone according

to IBOPE attracted 33% o the newcomers into the post-paid segment.

The clarity and consistency o the Vivo

brand are important actors in the

contribution to its strength, but its high

point is the commitment demonstrated

by the excellence o its services. The

company has achieved 99.6% o the

quality targets imposed by Anatel and

had the least number o registered

complaints: 0.2 or each 1000 clients.

In 2010 Telenica announced the

acquisition o Portugal Telecoms

participation in Vivo, becoming its

main controller. Vivo was the brand

chosen to replace the Telenica

brand commercially, making Brazil

the only Latin American country thatwill not use the Movistar brand.

Strong today, Vivo is getting ready or a

tough test by taking over the appointment

oer o a company that has spent the

year apologizing with customers or its

ailures in the wideband services and which

occupies the top position o all complaint

rankings o consumer protection ofces.

Being extremely authentic, will the

brand Vivo be resilient to support such

greater and less innovative oer?


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14.

Cielo is debuting in this years ranking

as a new brand in the market,

created in 2009, originated rom thetransition o the Visanet brand ater

the democratization o the use o card

associations. Initially in a segment with

little dierentiation, Cielo increases the

Role o Brand in the purchase decision

by associating its brand with innovative

products such as payment solutions

via cell phone and loyalty programs.

In 2010 it strongly invested in the

consolidation o its brand in the market

and in teaching its clients the new

market reality. Its communication

ocused on perormance and agility,

providing characteristics to the newbrand personality added to the expertise

o its past. It is currently the leader in the

nancial volume o transactions, leader

in the number o associated merchants,

and it has the most capillarity and

market penetration (1.8 million

merchants), besides being present

in about 98.2% o Brazilian cities.

Synonym o quality and reliability, Cyrela

is considered one o the most solid and

admired companies in its segment. All its

legacy is the result o over 50 years o work

in the construction segment, delivering

products and services o highest quality.

Furthermore, it benets rom the bad

reputation o many players in its same

segment to become even stronger.

Now that the brand has already built

its pillars, it is diving into the strength

its brand has in the market and into

the high expansion o its segment.

Caixa Econmica Federal, brand that will

be 150 years old in 2011, makes its debut

in the Best Brazilian Brands ranking.

It is the biggest public bank o Latin

America: its clients database currently

counts on over 51 million people between

checking account and saving account

holders, rom all income ranges. The

Caixa Econmica brand mingles with

the history o the country because o the

strong activity o the institution as a public

policies agent: own house, credit lines

to companies associated with BNDES,

unemployment insurance, PIS, FGTS and

the omnipresent casas lotricas today

an important outsourcer o services that

previously were only oered by banks.

Consistent in its line o actuation, in its

target to promote social inclusion and

its positioning, the CEF brand supports

several artistic, cultural, educational

and sports projects and materializes its

belie in people by making benets and

programs available to workers, besides

being physically present in all Brazilian

regions, with over 36,000 units.

Pioneer and owner o the biggest

telecommunications network o Brazil,

Embratel is a 45-year old company and it

is one o the most remembered brands by

Brazilians. Today, mainly in the xed-linetelephone segment, Embratel has been

suering with the maturation o the

segment. Although it has initiatives that

indicate the companys responsiveness

(oering xed-line telephone and cable

TV), innovation is not coming at enough

speed to ollow up on the consumers

desire or agility, comort and convergence.

The consumer is looking or initiatives

that are more adequate to its lie style inanother type o service: mobile telephones.

Established in a solid base o tradition and

recognition, Embratel is still enjoying the

results obtained rom its glorious past, but

it is already suering with the new reality.

EmbratelR$ 619

Segment:

Telecommunication

13 -15%

CaixaEconmicaFederalR$ 563

Segment: Financial

Services

16

CyrelaR$ 587

Segment: Real Estate15 +8%

Cielo

R$ 604Segment: Services

14


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Present in the ranking or the rst time,

the brand Extra demonstrates synergy

between its strategy and objectives.

Founded in the end o the 90s, the brand

was created by the Po de Acar Group to

take over the leadership o hypermarkets in

Brazil. It was the rst one to have 24-hour

stores and its main value is the low price/

cost strategy combined with the great

variety o products. Today Extra is present

throughout the country, with over 400

stores, in the hypermarket, supermarket,

close stores (Extra Fcil), drugstores and

gas stations ormats, besides the website.

Within the Po de Acar Group, Extra

is the business brand that growths the

most, with exibility to t the growth and

support the demands o consumers. The

conversion o the CompreBem and Sendas

ags has contributed to strengthen the

Extra brand even more in the supermarket

model, adherent to the behavior o medium

class consumers and some regional needs.

The most authentic telephone

communication brand o the country

and probably o the entire ranking

raises the ag or reedom and

makes speeches about providingoptions to customers, about showing

what is behind the promotions and

about oering plans that are easy to

understand. Oi bets in a distinguishing

point: simple when oering but daring

when communicating. But the brand

still has to justiy all its courage in the

communication o the delivery, as it

has suered with coverage ailure in

the beginning o its operations in So

Paulo and in 2010 it was among the top

three in Anatels xed-line, mobile and

long distance telephone communication

complaints ranking. Can the brandssympathy make up or operational issues

that impact on its image? This does not

seem to be a problem or the growth

o the company, which in 2010 was

consolidated as the main outsourcer o

telecommunication services in Brazil,

highlighting its leadership in xed

wideband, with 4.4 million accesses.

Considered one o the main economydevelopers o the state o Rio Grande do

Sul, Banrisul is the third biggest company

o Rio Grande do Sul and it is the top o

mind in the region. Its work is signicant

in the South region, but it is not known

much in the other Brazilian regions,

and it invests very little in expansion.

Very ocused on personal development,

it has been a public policies agent or 83

years and it is present in the daily routineo 98% o the population o the state.

Nevertheless, 2010 was a tough year

or the Banrisul brand: the bank was

investigated by the Federal Police because

o institutional embezzlement, and the

brand, extremely admired and recognized

by the local population, had its image

harmed and its credibility questioned.

+9%

OiR$ 514

Segment:

Telecommunication

17

BanrisulR$ 501

Segment: Financial

Services18 -22%

ExtraR$ 496

Segment: Retail19


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Big exporters aterthe storm

The segments that were impacted the most by the global crisis

were those o commodities because they are so dependent on the

international market.

In 2010 we saw many brands, mainly rom the mining and steel

segments, disappear rom the ranking, and although the world

presents signs o recovery, demand is still unstable and the playersthat took longer to adapt their strategies are still suering. The

exception was Vale, which demonstrated great responsiveness

and signicantly increased its revenues between 2009 and 2010.

The Real Estate Market is lookingor a synonym or the category

Last year some brands rom the real estate market made

their debut in the ranking, but the growth o their values

was less signicant than that o brands rom other segments

and most o them ended up staying out in a year when the

qualication score was higher. Despite the boom in real estate

credit and the good results, brands still have low inuence inthe purchase decision o the segment. Image and reputation

criteria are crucial when choosing a real estate, but they

are common to a list o big brands o the market and vary a

lot rom region to region. The challenge o big construction

companies and developers is delivering distinction.

Some smaller players nd in architecture, in sustainable

construction and in the outsourcing o services the answer

to create their own relevant territory, but none o the big

players deends one o these territories. A blank page to

the managers o these brands, who have in their hands

a product that is so important to their customers and

that oers so many possibilities or customization.


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20.


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22.

How to apply the theoryto build brands

Interbrand has been living the world o brands or over 30 years and is attentive to all movements that inuence

them. Our brand evaluation jobs, quite well known because o the rankings we publish, help us map the actors

that contribute to the brand strength and also how they evolve, become more important and even their

conguration throughout time.

One o the main pillars o brand strength comprehends corporate citizenship, a subject that is present in many

meetings, workshops and courses in the corporate world. It is not new, but this has been calling our attention

because o its ast evolution, motivated by expectation and by the demand o several stakeholders as well as by

the actors that relate to the brands.

Employees

The millenials who are now

getting to the work marketwant to work or companies

that have a clear goal.

Credibility

Ater an age where companies

lost their consumer's trust,

the eort to keep their

reputation intact is essential.

Clients

Having their own corporate

citizenship targets to meet,clients have been demanding

more and more rom

their suppliers.

Risk Mitigation

Taking responsibility proactively

is much more efcient than

xing problems ater they occur

Consumers

Consumers talk more to brands

and are much more aware. Whatcompanies do is more important

than what they say.

Environmental Risk

The concern with environmental

impact is in vogue.

Corporate citizenship comes

as a measure to help thebusiness to reduce costs.

STAKEHOLDERS

FATORES


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The new age o corporate citizenship

CATEGORIES

computers

automotive

retail

beverages

ast-ood restaurantsservices stations

chocolate

Entering this world is already

difcult because o the language. Many

names to the same thing and ewdirect explanations o what is what.

This was one o the motivations we had

to choose the term corporate citizenship

rather than other similar terms such

as corporate social responsibility and

sustainability. The concept is not new and

does not intend to destroy the territory

that has already been built by corporate

social responsibility and sustainability.

The intention here is to widen the

discussion, make the debate richer and

bring the subject to our everyday routine,

speaking in a broader manner and tryingto integrate all these concepts that are

already installed in the repertory o people

with a much broader way o thinking.

Ater all, companies are made o people,

and, like us, they might or might not be

considered good citizens, depending

on how positive their coexistence with

the society is and on how they treat

the main elements o their businesses:

employees and suppliers, the communities

where they operate, the governments

that inuence their work and the planet

which enables their existence.

Besides being more understandable

than the social bias o corporate social

responsibility and not appealing to the

environment which has taken sustainability

over, we believe it is easy to understand

when we talk about corporate citizenship.

We want to talk about the position

o the companies, the practices that

generate the perception o what

they are. And perception is brand.

That is where we make our contribution.

Going deeper in the investigation

To start talking about corporate

citizenship and explaining the change we

could see in our clients and in our brands

we needed resh news, new content.

The studies we have read about this

subject seemed content to simply ask

consumers i they considered corporate

citizenship important. Interbrand wanted

to go beyond. We wanted to understandwhat is behind the importance o each

subject, and i this importance becomes

a decision driver, i it actually intereres

in the manner consumers buy.

To do so we have conduced a

comprehensive quantitative

survey to dene the relevance o

corporate citizenship in the choice

o products/services and in the

relationship with brands in boththe B2C and the B2B markets.

CATEGORIES

computer hardware

heavy machinery

nancial services

wirelessB2C

B2B

5227 consumers between the ages o18 and 65 who play an active role inthe purchase decision o their homes

1861 buyers rom small and mediumcompanies and big corporations who play

an active role in the purchase decision

Corporate citizenship: a widerand more balanced approach

Companies are made o people and, likeus, they might or might not be consideredgood citizens, depending on how positivetheir coexistence with the society is.


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24.

DRIVER

SofCORPORATECITIZENSHIP

Convenient location

It has convenience stores I like

Oers technically advanced products

Oers competitive prices

Oers quality services

Facilities are clean and well kept

Develops alternative energy sources

I hear and see many things about the brand

Treats its employees, partners and suppliers airly

Supports the communities where it operates

Supports NGOs

Has partnerships with the government to positively impact the society

Oers products that are environmentally responsible

Makes an eort to minimize its environmental impactInuences its supply chain to positively impact on the society

0,470

0,324

0,287

0,249

0,303

0,304

0,213

0,187

0,203

0,192

0,176

0,214

0,203

0,2010,240

Decision drivers (example in a service station) Regression coefcient Behavior

OR

Brand

choice

OR

Favorable impressiono the brand

OR

Brand Advocacy

Brand Commitment

To get the gures

The greatest contribution o this study is

that it was one o the rst to isolate the

corporate citizenship variable to really

understand its role. Also, we didnt want

to obtain a local perspective but a global

view. In 2010 Interbrand established

a partnership with the Hall&Partners

Research Institute to listen to consumers,

buyers and clients. Brazil was one o the

6 ofces that participated in the processalong with China, Germany, Japan,

England and the United States, selected

to ensure the diversity o cultures and

economic relevance to the study.

We decided to include buyers not only

because o the very little inormation

available on the inuence o corporate

citizenship in this market, but also

because o the increasing number o

B2B clients who come to us or branding

projects. Ater the Walmart eect, which

greened the supply chain o companies

and made buyers begin to worry about the

type o suppliers they hired, we wanted

to understand whether there was a

relationship between corporate citizenship

and the purchase behavior o companies.

We enriched the study by interviewing

leader clients and companies in the

surveyed categories. In Brazil , we

talked to the people in charge ocorporate citizenship, sustainability

and marketing o companies such

as Petrobrs, Ita, Embraer,

Banco Real/Santander, Vivo and Bunge.

The rst results were published in

our paper The New Age o Corporate

Citizenship and presented or debate

and questioning in the event in

partnership with Harvard University in

December, which had the participation

o clients, experts and proessors.

The most important is that we

actually observed that the behavior o

consumers and buyers is signicantly

impacted by corporate citizenship.

That is, it is proved that corporate

citizenship aects the brand value. And

this is an excellent starting point.

The study has led us to many other

hypothesis about the application o the

study in Brazil, where much is said about

corporate citizenship. These are ideasthat have been in the corporate universe

or years, disseminating a sense o

urgency that is present in many meetings,

workshops and courses with specialized

consultants, but it is still little practiced.


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26.

Some examples obtained rom

Brazilian NGOs websites:

Denition o social responsibility:

"Corporate social responsibility is themanagement method dened by the

ethical and transparent relationship

o the company with all the audiences

with which it relates and by dening

corporate targets that leverage the

sustainable development o the society,

protecting environmental and cultural

resources to the uture generations,

observing the diversity and promoting

the reduction in social inequality.

Mission o an institute:

"Create a human community wheremale and emale values are balanced,

which sees itsel as part o the

Planets web o lie and, as such,

takes care o lie or lie itsel and

accepts mankind in all its diversity.

Its perectly possible to use the brands

speech style that is already established and

recognized by the clients. A complicated

and dense speech makes people go

away and reinorces the eco-boring

idea. Instead o showing a leaking tapand saying how many children in a

distant continent could be saved rom

thirst with the water wasted here, it

is possible to be direct and unny as in

the "Pee in the Shower" campaign.

01. Simple,not simpleton.

Corporate citizenship does not need tohave a tone o voice that is difcult, boringor dierent rom that o the brand.

Many o our recommendations to

clients include strategies or them to

communicate more clearly and efciently,

avoiding jargons and speeches that are

too technical and rhetoric. Many timescorporate citizenship seems to be conned

to a theoretical environment, academic

nearly, and difcult to penetrate. This

goes rom its denitions to explanations

o initiatives, programs and platorms.

Who said that corporate citizenship

has to be that boring and difcult?

Our Third Sector is populated by

missions and denitions that not only

empty their respective meanings and

decrease their power o action but

also make anyone who does not havea Ph.D. in the subject run away.

Many times, corporatecitizenship seemsto be coninedto a theoreticalenvironment,academic nearly, anddiicult to penetrate.


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02. I I am this nice,why is it that no one

buys my product?Choose the best moment and the besttarget audience or your message.

Beore the study, we thought that in

Brazil corporate citizenship was not

yet a demand driver as it is in other

more developed countries, where therelationship o corporate citizenship

with purchase denition would

be more straightorward because

consumers are more used to it.

We proved that here in our country the

relationship o corporate citizenship

with purchase decision is actually

very low but this happens to all the

countries that have been analyzed,

around 2% in B2B and B2C. The

gures in some B2B categories are

slightly higher, which we believe is

the result o regulations and also

because the companies are more

attentive to their supply chain.

We know these gures will not convert

Preerence

Commitment

Advocacy

Choice

B2C

13% 17%

6% 8%

9% 12%

2% 3%

Other actorsCorporate citizenshipSource: Corporate citizenship study 2010

B2B

anybody, but the act that corporate

citizenship already appears as a driver and

an inuence actor is a good start. And

it is interesting to notice where it causesthe most impact: it is when the people

are creating their impression about the

brand, and not really at purchase time.

Understanding where corporate citizenship

impacts on the relationship stages o the

client/ consumer with the brand makes

it easier to delimitate where the best

opportunities or action are. As it has

been identied that corporate citizenship

has greater eect on the stage where a

preerence or a brand is created, it is more

eective to concentrate investments in

actions that impact on how clients and

consumers engage with them than on

the purchase decision process itsel.


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28.

03. The aura eect.

Focus, ocus, ocus.

The study proved that people tend to

credit companies which have successul

corporate citizenship initiatives

concentrated in a single area. This

happens because the audience has a

good general perception o companies

that have a dened ocus, instead o

reading isolated eorts. The aura eect

allows a company that does very well at

owning a specic territory [supply chains,

relationship with employees, partnershipswith the government] to be noticed as a

good citizen, on the contrary o those that

choose to have initiatives in all areas.

There is a reason i, to date, in surveys with

audiences in general, the two brands that

always appear as the most sustainable in

Brazil still are Banco Real [in memoriam]

and Natura.

The main implication or the brand

strategy is that this concentrated

eort can provide greater return on the

investment. Find your niche and get hold

o it. This is better than alling into thetemptation o doing a little o everything

and making it difcult or the audience to

understand what you want.

04. The project has beenapproved, now we needto dene the cause.

Corporate citizenship has to talk tothe brand management, which has

to talk to the business strategy.

Here in Brazil, not always the relevance

o the causes chosen is tuned or is

coherent with the companys core-

business or values. Corporate citizenship

still doesnt talk to the brand management;

and associations that are not logical to the

stakeholders make it difcult to add value.

It has taken some time or brand consulting

to convince the company managers thatthe management o their brands should

be intimately connected to the business

management. Today, in some cases, the

branding manages to even guide the

business.

In the same manner, it makes total

sense or the corporate citizenship o the

company to be also guided by the brand

strategy.

Some sentences weheard rom our clientsand partners:

We decided it was important to

invest in social responsibility and

we have managed to approve the

budget, now we have to choose

which cause to support.

xWe plan all our business based on

what we believe, on the impact we

want to have on the world, then wedevelop all the rest.

The audiencehas a good generalperception ocompanies thathave a deined ocus,instead o readingeorts as isolated

actions.


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07. Mind the gap.

Find the balance between what is done and what is communicated.

Some sentences weheard rom our clientsand partners:

We are careul or the

advertisement not to be bigger

than the project. We pay twice

as much attention when the

subject is corporate citizenship.

The problem is to spend ten

times the amount invested

in the program in publicity.

These distortions demonstrate

lack o consistency.

Today, what is done is known by everybody.

Thereore, what is said, besides being less

important, can also make a company be

judged and rejected i the distance between

what is said and what is done is too long.

In the rst big corporate citizenship wave,

brands lled the prime time communicating

their eorts and initiatives in the area,

many times without much background.

The big eect o the green washing wasthe green atigue. All terms associated

with the good nature o companies,

such as corporate social responsibility,

sustainability and green products were

vulgarized. Ater so much criticism,

Ater so much criticism, monitoring anddemands, we have reached a moment wheremany companies do a lot but are araid ocommunicating. The brands still haventound the tone or the legitimate link tocommunicate corporate citizenship.

monitoring and demands, we have

reached a moment where many

companies do a lot, but are araid o

communicating. The brands still havent

ound the tone or the legitimate link to

communicate corporate citizenship.

Although the logic o brands states we

have to do rst and communicate later,

being closed in total silence does not

help. What is seen today is that evencompanies that do it well or have things

to say avoid communicating, as they

are araid o creating a negative image.

The notion o balance is still ar away.



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32.

08. Don Quixote let the companyand citizenship changed brands.

Engagement is essential.

Here in Brazil this still is a very personied

subject, deended by the individual citizen

and rarely by the brand, by the collective

o the company. When these spokespeople

and engaged people change companies,

citizenship might take a ride and

change brands.

09. We will dogood, but whowill pay the bill?

Do not transer the responsibilityto your consumers pocket.

In the beginning, corporate citizenship was merely seen as a

necessary cost and an activity that was separate rom the brands

identity. Or even, in a deensive position, a mattress or thecompany to be one step ahead o government regulations. These

positions are quite dated. I beore it was seen as a cost, today

corporate citizenship can be used in the construction o the brand

and in the generation o value. Billions o dollars in brand value

are currently tied to corporate citizenship - Coca-Cola, IBM and

Microsot together totalize nearly US$ 4 billion invested. When

corporate citizenship is done in a cosmetic way, it creates specic

products and services, separately rom traditional ones, and

generates a cost that is transerred to the consumer. When the

corporate citizenship strategy is directly associated to the business

and the brand, it adds up and it is noticed by the stakeholders as

something that generates value, not cost.

Ater several projects we realized that, at

the same time people provide a human

dimension to the companies missions

and work as catalyzers, many times this

"engine" which is the mission is not spread

and becomes vulnerable and dependent

on the physical presence o its creator.

In these cases, the corporate citizenship

becomes an island, isolated, and no longer

contaminates or motivates everybody.

This sentence we heard during the study

perectly depicts this situation: It is

something we speak a lot about, and when

I say we I mean the president.

With a good engagement process the

brand can make its stakeholders also

owners o these ideas, bringing them

to lie.

The total or these 14 companies

is over US$ 11 billion

Source: Best Global Brands 2009 and Corporate citizenship Study 2010

0.0 1.51.00.5

Billion US$

Coca-Cola

GE

Gillette

Microsot

Google

Toyota

BMW

IBM

Nokia

Cisco

HP

Mercedes

Intel

Samsung


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34.

11. The harder, it is todecide, the more it counts.

The more a purchase is rational, the moreimportant this actor is.

Corporate citizenship contribution

0 2 4 6 8 10 12 14 16 18

Percentage %

Cars

Chocolate

Commitment Favorable impressionAdvocacy

Source: Corporate citizenship study 2010

This is an insight which seemed very

obvious to us when we saw the charts,

but we had never seen it anywhere else.

It makes sense that in the categories

where the decision process takes longer

and is more rational the impact o

corporate citizenship is bigger. Thisdiscovery indicates that when people

careully think about a brand, they

consider the corporate citizenship actor.

Nevertheless, when they buy

spontaneously they pay less attention

to the behavior o brands.This does not

mean that chocolate and drinks brands

no longer have to worry about being good

citizens. There is much more behind the

logic that makes consumers establish the

universe o product they consider. They

might not be very interested in whether the

milk chocolate is sustainable, but they can

possibly think i the big brand, the company

that manuactures their avorite sweets, is

reliable and is not destroying our orests.

The act is that this connection more

actively happens when the consumer are

obligated to think about their purchase

instead o simply acting by impulse. I your

product is expensive, complex and will last

long, your company should do more than

just think about corporate citizenship.

When people careully think about a brand,they consider the corporate citizenship actor.Nevertheless, when they buy spontaneously,they pay less attention to the behavior o brands.


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Documents

Best Brazilian Brands 2011