Brand value increases across categories

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Part 3 | The Categories Personal Care PRODUCT REFINEMENTS, NEW TRENDS DRIVE GROWTH Clever marketing counters private label 56 BrandZ Top 100 Most Valuable Global Brands 2013 PERSONAL CARE rebounded. Brand value for the category increased 11 percent in contrast to a decline of 5 percent last year. Many brands introduced new and higher performing products to counter the lingering effects of the recession, which intensified the category’s normally heavy promotional and private label activity and eroded brand loyalty. Improved private label quality made it more difficult to convince consumers to kick the private label habit. Brands sharpened their marketing to build personalities and differentiation into their products. To explain their perceived premium pricing, some brands emphasized the masterbrand, a strategy that added quality assurance and stretched marketing budgets. Definition The personal care category includes brands in health and wellness, beauty, and facial, skin, hair and oral care. Top 15 Personal Care Brand value 2013 $M Brands’ continued expansion into the fast growing markets where the rising middle classes represent enormous new customer potential. These other trends also influenced the category: Technology The confluence of cosmetics and pharmaceuticals formed a new and fast-growing segment of the category. Social attitudes Changing views of beauty influenced product offerings and evolving attitudes about masculinity increased interest in men’s grooming. Marketing Without abandoning traditional media, brands took full advantage of digital marketing, in-store and online. Crossing categories A fast-growing class of hybrid products, known as cosmeceuticals, combined the beauty and the health and wellness sectors. A cosmeceutical, for example, may be a moisturizer with a medical ingredient for enhancing skin health. The interest in cosmeceuticals reflected the shifting attitudes toward beauty, Brand contribution Brand value % change 2013 vs 2012 1 L’Oréal 17,971 4 30% 2 Gillette 17,823 4 -6% 3 Colgate 17,250 4 15% 4 Nivea 6,322 3 36% 5 Garnier 5,429 3 22% 6 Lancôme 4,982 4 20% 7 Dove 4,927 3 5% 8 Clinique 4,000 4 17% 9 Natura 3,707 5 12% 10 Crest 3,680 5 9% 11 Olay 3,593 4 6% 12 Estée Lauder 3,545 4 18% 13 Oral-B 2,346 3 -6% 14 Avon 1,981 3 -27% 15 Pond’s 1,779 2 New Valuations include data from BrandZ, Kantar Worldpanel, Kantar Retail and Bloomberg. Brand Contribution measures the influence of brand alone on earnings, on a scale of 1 to 5 (5 highest). Consumer & Retail | Personal Care Up 11% 57
Part 3 | The Categories which increasingly were more about enhancement rather than cover up, looking like the best “you,” and not attempting to imitate someone else’s beauty ideal. It also relates to several larger trends that cross categories. Today’s multi-tasking consumers desire products that save time and add convenience. In that respect, cosmeceuticals are similar to soft drinks that perform more than one function, simultaneously quenching thirst and boosting energy. Personal care brands active in cosmeceuticals included the three brands that appreciated most in brand value: L’Oréal and Garnier, which are owned by the L’Oréal Group, and Nivea, owned by Beiersdorf. L’Oréal led the BrandZ personal care ranking with a 30 percent rise in brand value. Garnier grew 22 A masterbrand brings benefits Insight Masterbrand strategies make sense in personal care for several reasons. First, many of the major players are present across many sub categories. A masterbrand leverages that presence. Second, the personal care category is constantly under price pressure from private label. A masterbrand strategy can assert the common benefits that earn a price premium. Alice Brady Business Director Mindshare Alice.Brady@Mindshareworld.com 58 BrandZ Top 100 Most Valuable Global Brands 2013 percent in brand value and Nivea, 36 percent. Brand value growth resulted mostly from strong financial performance. L’Oréal and Garnier also increased in Brand Contribution. Brand Contribution measures how much of brand value can be attributed to brand alone, rather than financial and other factors. Growth opportunities The interest in products for men continued unabated. Among the many factors driving the men’s grooming trend are: growing pressure to look fit; the struggle to find or keep a job in a difficult economy; and the evolving, more nuanced view of masculinity. The sales potential attracted new competitors, including a recent market-disrupting direct-to-consumer entry with a proposition based on price and convenience. Called Dollarshaveclub.com, it offers an online subscription service and delivers relatively inexpensive blades by mail. Meanwhile, the well-established Gillette brand appealed to younger men in an effort to convert new, life-long customers. Along with Crest and Natura, Gillette received the highest Brand Contribution score in the personal care category. In contrast, brands that primarily target young men—like Unilever’s Axe (Lynx in the UK and several other markets)— adjusted its messaging to keep young male customers interested in the brand as they age. Do it yourself (DIY) represented another growth opportunity. DIY products expanded the category by offering an at-home solution for a service usually performed by a professional at a much higher price. Several brands introduced DIY electrolysis for hair removal. L’Oréal, Clinique and other brands offered improved, more precise applicators for lipsticks, eye shadow and other cosmetics. Integrated marketing Because the category is so competitive and commoditized, brands sought new ways to differentiate. Celebrity remained a central convention. But some brands defied certain conventions in order to stand out. The DIY trend led to the widespread use of “how-to” videos as a new marketing channel on YouTube. Skin care brands partnered with popular bloggers and celebrity stylists to showcase the ease and convenience of using professional products at home. Non-competing brands co-marketed in an effort to lift the entire category. To encourage shoppers to cross the aisles, Colgate-Palmolive and Kimberly-Clark cooperated in a back-to-school marketing effort called “Healthy Habits.” The program combined social media with instore presence to encourage good hygiene, like hand washing and teeth brushing. The brand value of Colgate increased 15 percent. Fast growing markets Even as its rate of economic growth slowed, China continued to be an important growth engine for many personal care brands. Estée Lauder worked to develop China as its second home market in 2012. Sales of the Estée Lauder brand significantly outpaced the Chinese economy. Estée Lauder increased 18 percent in brand value. The Estée Lauder Companies introduced a brand called Osiao, specifically for China. A further iteration on the cosmeceutical trend, the Osiao brand combines Western science and Chinese medicine. The Brazilian cosmetic brand Natura rebounded with a 12 percent increase in brand value following a decline of 28 percent a year ago. Its success came from linking a clearly communicated brand proposition, about health and a personalized ideal of beauty, with a wellexecuted direct sales structure. Not usually thought of as a fast growing market, the US, with an improving economy, helped drive personal care sales. Luxury names like Lancôme, a high-end brand owned by L’Oréal, benefitted from the trend. Insight Add strength with trust Transparency needs to be mated with authenticity. If you do that consistently you develop trust. Positioning a brand as transparent and committed to helping the customer can be a strength. John Rand Senior Vice President Kantar Retail John.Rand@kantarretail.com Insights BrandZ BigData Brands ranked caring, desirable, responsible Brands in the personal care category are now rated more desirable, caring and kind than brands over all, and even more than the BrandZ Top 100 Most Valuable Global Brands. The personal care category brand value leaders also have a significantly higher ethical responsibility ranking when compared with all brands and with the Top 100. The personal care brand value leaders have increased steadily in these aspects since the BrandZ valuation began eight years ago. Natura, the successful Brazilian brand that ranks in the Top 10 most valuable personal care brands, is particularly strong on ethical credentials. Source: BrandZ BigData, over 2 million consumer interviews regarding over 10,000 brands in 30-plus countries Action Points 1. Have a point of view The personal care category could use a fresh viewpoint on the question of “what is beauty” that’s sensitive to cultural differences and communicated in a memorable way. 2. Innovate Because of commoditization, growth may come from innovation, meaning looking at existing product areas and adding a new element that fulfills an unmet need. 3. Be healthy Consumers read ingredients closely. Claims that a product is healthy need to be fully supported by the facts or risk customer backlash, which can spread loudly and widely on social media. 4. Be social Consumers, especially young women, are using social media to learn about and evaluate new cosmetic products. Consumer & Retail | Personal Care Spotlight In BRICs, sole decision makers tend to be women In BRIC market households, when one individual makes purchase decisions about personal care products, it’s usually a woman. Sole decision-making responsibilities are most evenly split in India. Joint decisions about personal care purchases are male dominated in all BRIC markets. Decision makers China India Russia Brazil Female Male Sole decision maker Joint decision maker Source: Mindshare, MindReader 2012 online survey 59
Page 1 and 2: Methodology and valuation by Brand
Page 3 and 4: Welcome So much has happened in the
Page 5 and 6: Part 1 | Highlights 6 BrandZ Top 10
Page 7 and 8: Part 1 | Highlights Key Results Key
Page 9 and 10: Part 1 | Highlights Cross-Category
Page 11 and 12: Part 1 | Highlights Take Aways Comm
Page 13 and 14: Part 2 | The Top 100 22 BrandZ Top
Page 15 and 16: Part 2 | The Top 100 Category Brand
Page 17 and 18: Part 2 | The Top 100 BRAND VALUE AP
Page 19 and 20: Part 2 | The Top 100 STRONG BRAND E
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Page 51 and 52: Thought Leadership Total Disruption
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Page 67 and 68: Thought Leadership Speed Kills: How
Page 69 and 70: Part 5 | Resources BrandZ Valuation
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Brand value increases across categories

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