Fortune publishes Landor study
19 October, 2005
Three-year study on U.S.-based brands shows direct link between brand health and shareholder wealth
Landor Associates, the world’s leading branding and design consultancy, in partnership with BrandEconomics, a division of global consulting firm Stern Stewart & Co., today announced the results of its 2005 Breakaway Brands Study. The study’s findings appear exclusively in FORTUNE magazine’s October 31st issue, available now at www.fortune.com and on newsstands October 21st.
The study identifies the ten brands in the United States that have made the greatest percentage gains in business value as a result of superb brand strategy and execution over the three-year period, from 2001-2004. The list includes a wide range of consumer and business-to-business brands, as well as mono- and sub-brands.
"Landor’s Breakaway Brands Study represents a significantly different approach from the more traditional published brand rankings which tend to categorize brands by size or popularity. Instead, our study quantitatively values measurable improvement in brand strength over three years," said Hayes Roth, Vice President, Worldwide Marketing and Business Development for Landor. "The result is a revealing list of transformed brands that clearly demonstrate the importance branding can play in driving financial performance."
While the study includes popular brands, like Google and iPod, it also recognizes newer brands that are still carving a niche for themselves, like LeapFrog and Sierra Mist, as well as old favorites, such as Eggo and Gerber, that have successfully revitalized their franchises through well conceived and executed strategies. The study demonstrates that building strong brands is vital to virtually any organization, regardless of its size or industry.
The study identifies the following ten Breakaway Brands: • Google - Internet • LeapFrog - Educational Toys • Sony Cyber-shot - Digital Cameras • Sierra Mist - Soft Drinks • Subway - Quick Serve Restaurants • BP - Oil & Petroleum • DeWalt - Power Tools • iPod - Consumer Electronics • Eggo - Packaged Foods • Gerber - Baby Foods
The research also identified several runner-up brands to watch: Cheer (Laundry Detergent), Caterpillar (Industrial Equipment), Firestone (Tires), Borden (Dairy Products) and Olympus (Digital Cameras), based on brand valuation metrics and analysis.
"We believe this is the definitive, fact-based study of brand improvement and its impact on business value," said Al Ehrbar, Chairman of BrandEconomics. "These are the ten companies that had the greatest total returns on their brand investments over the past three years."
The study’s results were arrived at through integrating Young & Rubicam Brands’ BrandAsset® Valuator, the world’s longest-running and most comprehensive survey of consumer brand perceptions, with Stern Stewart’s Economic Value Added (EVA) model, an internationally recognized and respected metric of financial performance that measures the profit of an enterprise. Combined, the two models provide the only objective measure of brand value by combining BrandAsset® Valuator’s quantitative assessment of brand health and EVA metrics on financial performance, providing a brand valuation approach grounded equally in both the consumer and economic perspectives on brands.
Landor and BrandEconomics studied more than 2,500 brands in the U.S. BrandAsset® Valuator database over the three-year period to identify those brands that exhibited the greatest increases in brand strength, a combination of differentiation and relevance. These brands command greater premiums and have broader sales footprints as a result of their brand improvements, directly affecting current operations value and allowing them to expand across categories and geographies, enabling significant future growth value. For each of these, Landor and FORTUNE magazine evaluated key actions the brand owners took to improve the brand’s performance, leading to major gains in their financial value.