An Essential Guide to Enhancing Brand and Consumer Relationships in Human Terms Trends and Insights, January 2013

The world as we know it is a very different place.

The power balance between regional economies and institutions has

shifted All over the world people’s expectations of life have adjusted to fit a

new set of norms

Technology has changed the way

and speed at which we communicate

Against all of this, the relationship between people and brands has changed and, in many cases, suffered.

Only 20% of brands have a notable positive impact on our sense of wellbeing and quality of life Most people would not care if 70% of brands ceased to exist

There’s a huge opportunity for Brands that can relate people in a more meaningful way. We need to change the way we define and measure brand value so that fully understand how to build their contribution to our quality of life and wellbeing.

Meaningful Brands is our new vision and framework that enables companies to respond to these changes, and help people improve their lives to become part of the next generation of brands.

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Umair Haque, Director Havas Media Labs and member of the thinkers50,

“If the majority of people don’t care if 70 percent of brands disappear tomorrow, and if just 20 percent of brands have a notable positive impact on people human lives, despite the billions poured into trying to connect with them by C-suites across the globe, we have to fasten our seat belts: communications as we know it is going to have to take a quantum leap. As the global economy is changing, marketing must stay several steps ahead of the transformation curve.

If you want to earn the love, trust, devotion and attachment of people you’re going to have to undertake the challenge. We need to focus on making a difference to people, communities and society that endures, resonates and multiplies.”

For the first time we are able to connect brands with our quality of life and wellbeing. We do this by measuring the perceived impact of brands on our personal wellbeing - their influence on factors such as our health, fitness, happiness, values, social relationships, financial security, lifestyles and habits - and our collective wellbeing, that is, how brands help to improve communities, societies and the environment.

o  Meaningful brands enhance the wellbeing of people, communities and the environment

o  Meaningful brands help us to improve ourselves, our families, our communities and our planet

o  Meaningful brands are sustainable

o  Meaningful brands form partnerships with people that help us adopt better habits and lifestyles

o  Meaningful brands make new relationships with people that are deeper and more human

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Every year we speak to 50,000 people in 14 countries about how brands fit into their lives.

It is clear from our analysis that we need to take a new look at the relationship between brands and consumers. Nowadays we want so much more from brands than just promises or stories. Brands that manage to create better relationships dominate the marketplace.

Meaningful Brands helps us to develop this type of relationship by understanding exactly what people expect from brands. It also helps us track how successful companies are responding to these needs by understanding how these companies are contributing to our wellbeing, both as citizens and individuals, and how they communicate these values to us.

It also shows us that there's a big business opportunity for brands that are able to satisfy consumers by creating wellbeing in the context of their new values, expectations and local market realities.

Top 20 most meaningful global brands according to our Havas Media’s Meaningful Brand Index (MBi):

1.  IKEA 2.  Google 3.  Nestlé 4.  Danone 5.  Leroy Merlin 6.  Samsung 7.  Microsoft 8.  Sony 9.  Unilever 10.  Bimbo

NB – global brands are those explored across two or more markets from different regions.

11.  LG 12.  Philips 13.  Apple 14.  P&G 15.  Mars 16.  Volkswagen 17.  L’Oréal 18.  Walmart 19.  Carrefour 20.  Coca-Cola

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Global Trends

People living in fast-growing economies have a healthier relationship with brands.

Our measurement, with its simple definition of “Meaningfulness” – the brand attachment coupled with the contribution to the quality of our lives, shows us that consumers care about more than 50% of brands in Latam countries such as Brazil, Mexico, Argentina, Chile and Colombia. These high levels of meaningfulness are also recorded in China and India where people tend to feel many brands are having a significant impact in their lives. This is compared to significantly lower levels in Europe where people are much more sceptical of brands.

In emerging and fast-growing countries, the progress of their economies and societies and the companies are dependent on the progress of their people. Addressing big social challenges, such as access to basic affordable products and services, means exploring the basic needs of their communities. Half of the top brands with higher MBi scores come from these regions. For example, Tetra Pak and Bimbo in Mexico, Colgate-Palmolive and the oil company Petrobras in Brazil, food brands Colún in Chile and Nacional de Chocolates in Colombia, La Serenisima and Sancor in Argentina, Unilever in India and Ikea in China.

FMCG brands, retailers, IT and consumer electronic brands are performing better than most categories in helping to improve our personal quality of life. Energy, oil, financial and telecommunication services are more prone to underachieve, according to our respondents.

Despite this, some brands have been able to break free from these industry limitations. There are brands with exceptionally high MBi scores in lower scoring categories who are learning to reconnect with consumers. This is the case for Fidelity Investments in the USA, energy brands Petrobras in Brazil and EDF in France and telco brands 02 in the UK and Free in France.

We are seeing an upward trend on brand collective wellbeing contributions - communities/ societies/ environment. This is especially the case with the automotive sector, which has seen rankings driven upwards by greater environmental and product innovation, such as the hybrid and electric cars and energy efficiency. Compared to last year, brands such as Volkswagen, BMW, Toyota and Peugeot have, according to consumers, improved the most in this area.

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Sara de Dios, Global Head of Meaningful Brands at Havas Media:

“We believe that it’s likely that the next generation of brands will flourish in emerging economies - they can, from the onset, create a context that promotes the growth of meaningful brands. Companies and brands operating in emerging economies can become active in transforming their roles; they are creating new lifestyles for millions of people and their communities while contributing to the overall progress of their societies. This will continue in the future with a growing middle class emerging within these markets.

By contrast, the situation in developed economies is the opposite. Brands in these regions are no longer seen to improve people’s quality of life. There is an aging and increasingly poorer middle class who are demanding that brands help them to lead and create new lifestyles that fit into their new expectations and values. In order to survive, these brands must re-evaluate their definitions of success and take up the challenge to make meaningful contributions to these people’s lives.”

Branding and communication strategies must be adapted and customized to suit geography or market clusters. Being adaptive and responsive to each market’s needs and expectations is crucial. Companies must address which specific outcomes are more meaningful to people in each market. And for global companies with multiple brands, different but consistent approaches are needed across brand and market clusters. Not only do people expect brands to contribute to their lives and the lives of others, they also expect a different type of connection through more tailored and relevant interactions.

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US Retail Insights

The retail category matrix shows us which outcomes people believe are important to drive brand equity and how people believe the category is performing in realizing these outcomes.

1. Marketplace outcomes - output/ products (4Ps) - are naturally important and are high performers, in particular listening to customers, providing quality and useful products. Being ethical, transparent and being a good place to work are top Collective equity drivers. Treating consumers with respect, helping learning and to make life easier are key Personal outcomes to leverage.

2. Opportunity areas to enhance performance are largely in Personal emotional and organizational territories, in making consumers happier, helping to enhance life satisfaction, promoting positive company interactions and supporting good consumer habits.

3. And as Collective outcomes continue to increase in importance over time, we recommend reinforcing actions taken in providing fair working conditions for supplier employees, charity support and efforts which provide jobs to fuel the economy.

OUTPUT/PRODUCTS(4Ps) COLLECTIVE OUTCOMES PERSONAL OUTCOMES

Connecting and delivering on these territories in a human, tangible and consistent way, through all brand interactions, leads to greater attachment and loyalty.

1. 2.

3.

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Whole Foods outperforms category expectations in most outcomes which propels the brand to the most meaningful Retail brand in our study.

Whole Foods’ is strong in the core category marketplace outputs, offering safe, healthy and innovative products, and in listening to consumers.

Whole Food’s core values underpin a strong range of Collective outcomes, which support Community, Environment, Government & Ethics and Workplace dimensions. …Whole Foods stores are are green and energy efficient, offering sustainable, natural and organic food, having banned plastic grocery bags, offsetting of 100% of energy use with wind energy credits. …Whole Foods cares for local communities, seeing themselves as ‘active neighbors’. For example, the Whole Planet Foundation initiative aids in the fight against poverty, domestically and in developing countries around the world through the sales of certain products and in helping to create local jobs.

Whole Foods excels in delivering upon Personal outcomes Physical, Emotional, Intellectual, Social and Natural dimensions. …Health Starts Here educates and empowers consumers, providing health and recipe information and guides, online and in-store at the Health Starts Department. …Whole Kids Foundation promotes health, learning and connecting, seeking to improve children’s nutrition and wellness, through bringing salad bars to schools and creating school and community gardens.

We see an opportunity for Whole Foods to further increase brand equity by incorporating and realizing key Organizational attributes.

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Collective Outcomes

65

85

105

125

145 PHYSICAL

FINANCIAL

ORGANIZATIONAL

INTELLECTUAL

SOCIAL

EMOTIONAL

NATURAL MARKETPLACE

WORKPLACE

COMMUNITY

ECONOMY

ENVIRONMENT

GOV & ETHICS

ITC Performance Index ITC Importance Index 100=Average

In combination with our matrix diagnostic we use spider charts to evaluate comparative category and brand perceived importance and performance at a dimension and attribute level, across Marketplace, Collective and Personal outcomes.

When it comes to the Information Technology Communications category all Marketplace attributes such as providing quality, useful and innovative products/ services are core. Being ethical and transparent are also important Collective Outcomes which drive brand equity in in the category. These are areas to nurture and enhance performance.

Personal Organizational and Intellectual attributes, helping to make life easier and save time, and enabling learning, are important drivers where the category performs well. Social and Emotional dimensions are areas where the category can seek to enhance, such as, bringing happiness and enabling greater life satisfaction, treating consumers with respect, making company interactions easy.

Personal Outcomes

US ITC Insights

Important  dimensions  to  drive  brand  equity  

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Google ranks #3 in our US brands and is the category ITC leader. People would care if the brand disappeared.

Google is comparatively strong to other consumer electronic, technology and telecommunication brands in the US on nearly every Collective outcome but has room to improve on Marketplace outcomes. Interestingly, when we compare performance at a global level and across all categories, we see further opportunities to strengthen the brand in the Collective dimensions. Google excels on most Personal attributes, but there is naturally room to enhance performance in Emotional and Social attributes.

Some of the ways in which we see Google delivering include: …Google makes life easier through its core products and services, from simple search via Chrome web browser, to Android mobile OS, to gmail. Reinforced through the Google mission to provide users with the best possible experience.

…Google is recognized as a good place to work, ranked #1 by CNN in 2012, among others.

…Google is socially committed, in the heart of Silicon Valley, through Citizen School initiatives and R&D support e.g. Lunar X competition.

…Google invests in renewable energy and the environment. Solar panels are used to power 30% of their buildings energy consumption. 380,000 gallons of waste water is treated and reused. Millions are invested in renewable energy innovation projects, which also help make people’s lives easier.

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US Auto Insights

Across categories we tend to see the greatest difference in comparative importance and performance in Personal outcomes. In the Auto category, Emotional, Natural and Organizational dimensions are most important.

The category opportunity to enhance performance is predominantly in Emotional attributes, such as making consumers happier, promoting life satisfaction, enabling self-expression and treating consumers with respect, coupled with helping to make consumers’ lives easier.

In order to grow brand equity and attachment we recommend prioritizing delivering upon key attributes which are relevant for your category.

OUTPUT/PRODUCTS(4Ps) COLLECTIVE OUTCOMES PERSONAL OUTCOMES

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Honda is our top performing Auto brand which outperforms the category on nearly all Collective outcomes and Personal dimensions of Natural, Physical, Intellectual and Social.

As with the category, there is the opportunity to enhance Marketplace outputs, along with Emotional and Organizational Personal dimensions.

We see Honda’s meaningful success in: …Honda’s “Greenest Vehicles” accolade, where the fuel efficiency of the 100% electric Honda Fit, plus five other hybrid or electric vehicles, resulted in Honda being among the top brands awarded. …Honda’s Blue Skies initiative for our children, which aims to help future generations experience the freedom of mobility with an aggressive 2020 emissions reduction mission. …Honda’s community outreach, such as the California Coastal Cleanup, which brought LA volunteers together to clean over 750 sites in 2011, Madrona Marsh Habitat Restoration initiative and Ohio educational student events. …Honda’s “practice what you preach” approach, where solar panels are utilized on all Honda facilities around the world.

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For you numbers people, the snapshot below shows how our Meaningful KPIs of Contribution to Quality of Life and Attachment compare with traditional brand measures.

Naturally, the highest performing Meaningful Brands also perform best in traditional brand measures.

Personal Outcomes

Emotional Social Natural

Physical Organizational Financial Intellectual

Workplace Community Environment

Gov & Ethics Economy

You have seen how Meaningful Brands pays in human terms, “me, us, the world”.

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And Meaningful Brands pays in business terms.

If you too are excited and intrigued about our cartography approach to identifying key brand equity drivers, linking Marketplace, Collective and Personal outcomes and using our framework to help realize sustainable business results, do please contact us.

Sara de Dios, Global +34.914.569.090 sara.dios@havasmedia.com Kate Cox, UK +44.207.393.9000 kate.cox@havasmedia.com Amy du Pon, US +1.646.587.517 amy.dupon@havasmedia.com

To learn more, please visit:

www.havasmedia.com @HavasMedia http://www.youtube.com/havasmediachannel

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