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  Readers' Choice 2004   Readers' Choice 2004  Robin D. Rusch  
         
 
Global: Apple bites big

After a two-year hiatus Apple has returned to win the 2004 Readers’ Choice Awards for the brand with the most global impact—a title held by Google since 2002.

It’s hard to imagine a brand having a shinier year than Apple. Notably punctuated with iMacs, iPods and iTunes, Apple’s 2004 presence was felt in the press, in ads and on the streets, with iPod coming to define the word “ubiquitous.” Coupled with strong revenue, Apple reported a net profit of US$ 295 million in the last quarter of 2004 alone and a 2004 overall net income growth of 300 percent. Yes, 300 percent.

At Apple’s core is great innovation, beautiful design and an ability to bring warmth and passion to those who may be completely incurious about technical gadgetry but need it nonetheless to survive in today’s world.

From U2 to “You too?,” the iPod alone sold 4.6 million units in the last quarter, practically doubling sales since its launch. (There are now about 10 million pod-addicts on the planet.) Meanwhile, iMac sales tripled as Apple’s overall computer sales rose by 26 percent over 2003 sales. Music division iTunes became the blueprint for Napster-alternative online music sales. And swanky retail outlets gave Apple enthusiasts a chance to worship or interact directly with the company as well as each other.

However, Apple’s cultural symbolism was not economically symbiotic. Its worldwide computer market share dropped to less than two percent in 2004 to a 1.87 percent share in Q3 of 2004 (down from 2.19% in Q3 2003). The 2004 world leader for market share was Dell at 18 percent, followed by HP at 16 percent and IBM with 6 percent. The small white hope is that iPod’s halo effect will bring more buyers to Apple’s other offerings, which go beyond consumer goods to include servers, WiFi, and software, and include the already-backordered new iPod Shuffle and a sub-US$ 500 Mac.

Not far behind Apple, and equally appealing to those navigating a potentially complicated technical landscape, is Google.

The world’s number one search engine, Google’s impact on our readers reflects the online public’s growing dependence on sorting through an incomprehensible amount of available information. On our screens, its minimalist design betrays its maximal capacity. But Google does more, including technology licensing and hardware, news aggregating and shopping (Froogle). According to the company, 95 percent of revenue comes from AdSense advertising.

Google lost little ground in being dumped as the search engine behind Yahoo early last year; it conducts more than 200 million searches a day and leads the world for search engine usage with 57 percent of the current market, followed by Yahoo at 21 percent and MSN at just 9 percent.

Largely based on functional attributes, which offer clarity in a complex field, Google is by no means invincible. It faces competition on many fronts including Yahoo’s Overture search engine and other solutions like Vivisimo’s Clusty, and MSN Desktop Search, all of which hope to build a better mousetrap.

From the public’s perspective, Google’s unique approach to life’s little issues was on display as it went public in 2004, seeking to do so largely on its own terms. The same strong arm can be felt in the pretzel twisting exercise webmasters are submitted to when trying to meet the company’s keyword ranking guidelines. However as long as the brand is on top, it gets to call the rules.

The upside to Google’s future? Only 12.7 percent of the world population has access to the Internet, leaving 5.6 billion potential future users.

From tech to retail, numbers three and four on the Global list are, respectively, Swedish furniture retailer IKEA and American coffee brand Starbucks. Surprisingly similar despite product differences, both benefit from having highly branded retail spaces that quickly generate publicity and awareness.

Both IKEA and Starbucks expanded in 2004. IKEA opened ten more stores in 2004 and has staked out 20 new locations for 2005.

Starbucks opened 1,344 new spaces in the first three quarters of 2004, to bring its global total to 8,569 in more than 30 countries. The hyper-caffeinated brand intends to expand to 15,000 US stores and 15,000 international stores. Although the expansion’s timeframe is unclear, consider that the retailer opened roughly 3.5 stores every day in 2004.

Starbucks is not without competition, particularly beyond US shores. Pretty much any venue brewing quality coffee and offering ambiance can rival the barista. However Starbucks benefits from high brand awareness, an efficiency of size and operating on the McDonald’s principle of “safety in the known.”

Rounding out the top five 2004 Global Brands is a surprise winner: the Arab-focused, 24-hour news source Al Jazeera. Based in Qatar and offering an alternative to BBC or CNN, Al Jazeera has over 35 million viewers (overwhelmingly Muslim) and 30 bureaus worldwide. As the issues of 2004 hovered heavily around the Middle East and Islamic populations, Al Jazeera’s relevancy soared.

Though suffering difficulties such as banned reporters, advertising boycotts, and charges of bias (arguably stemming from those who are themselves biased toward European and American interests), Al Jazeera is viewed as relatively independent within its region and is increasingly gaining mainstream credibility beyond its borders. The company itself claims to “cover all viewpoints with objectivity integrity and balance.”

Already offering news in English at English.AlJazeera.net, the media source is planning to offer an English channel satellite service in 2005.

Other brands in the top ten are previous year mainstays, with Germany’s car brand Mini and America’s Coca-Cola sliding from the top five in 2003 to sixth and seventh in 2004. The UK's Virgin entered into the top at eighth from last year's eleventh. Finland’s Nokia slipped from seventh to tenth.

Notable newcomer to the top ten is eBay (at ninth). The American online auctioneer claims 95 million registered users, and in 2004 expanded abroad to Asia, South America and Europe, allowing people all over the world to sell things they don't want and buy things they don't need.

 

US & Canada: Jobs well done

Apple is the winner in the 2004 Readers’ Choice Award for the US & Canada for the second straight year. Target falls to third as Google creeps up to place second.

The perpetual underdog, with less than two percent of the world market, Apple has what John Schwartz in the New York Times aptly described as the “attitude of an artist and the eye of an anthropologist” (16 January 2005). The company’s ability to delight the user in a bland land of equipment and software makes it easy to see why it impacts those of us who spend our days in the 21st century.

However, less savvy consumers contribute to the actual sales dominance of mainstream competitors, particularly in the computer division. Apple Computer ranks sixth in the US with just 3.33 percent of the market (Dell leads at 33%, followed by HP at 20% and Gateway at 5.23%).

Undaunted by the competition, Apple’s dizzying pace of inventing new toys looks set to continue in 2005. The Shuffle and Mac mini were both unveiled in January of 2005. (2,000 Shuffle units sold within four hours of revealing the iPoddler.)

Continuing to reflect global results, Google pulls up behind Apple at second place.

It’s no surprise that Google ranks so high in the lives of North Americans, as more and more households go online (roughly 68 percent of the North American population now has access to the Internet).

Google deserves credit for offering clarity where most other portals employ a jungle of links. Easy enough for a newbie to navigate, it still remains the engine of choice for techies. Consider this: 66 percent of Microsoft employees use Google while only 20 percent use their own MSN engine. (We’d speculate on what the remaining 14% are up to but we’re worried about mysterious DOS errors).

Overall in the US, Google holds 34 percent of the search engine market. Yahoo is close behind with 32 percent, MSN at 27 percent and AOL, the milk and cookies version of the Internet, drags in at nine percent.

Retailers Target and Starbucks are, respectively, third and fourth in the US & Canada, making tech and retail the categories to most impact our readers.

Although trailing Wal-Mart in actual sales, American department store Target gets points beyond just price (Wal-Mart’s primary offering). Target’s fourth year in the top five US & Canada Brands reflects the public’s love of the reasonably priced, upscale retailer.

Shopping for bathmats, a Target shopper feels smart, savvy and, dare we say, sexy. It appears that while we’re glad to get a year’s supply of toilet paper at Wal-Mart for a nickel, the experience doesn’t exactly linger beyond the checkout line. Perhaps this explains why Wal-Mart placed 18th to Target’s 2nd.

Despite offloading its underperforming divisions in 2004 (Marshall Field’s and Mervyn’s), Target is rumored to be looking to expand. Canadians may see their beloved Hudson’s Bay Company acquired by the retailer in 2005.

Though experimenting somewhat outside of its charter with breakfast and lunch options in select markets, and offering branded music compilations, it seems safe to assume that Starbucks’ impact on the daily need for caffeine isn’t waning. A relatively cheap treat, Starbucks is a good example of socialized luxury.

Reflecting an incredible rise in the US & Canada results is Pixar at fifth place, up from eighth in 2003 and 31st in 2002.

Still under the partnership thumb of its distributor Disney (and majority-owned by Apple’s CEO Steve Jobs), Pixar released just one feature-length film in 2004: The Incredibles. Competitor DreamWorks, which placed 40th, released four films in 2004, including Shark Tale and Shrek II. Placing 37th, Disney (a comprehensive conglomeration of entertainment businesses making it difficult to really compare with Pixar) made news most notably in 2004 by declining to release the documentary Fahrenheit 9/11 from Michael Moore.

We mention Moore because, though not listed on our survey, he received quite a few write in votes along with his nemesis George Bush. (At this point we should remind our readers that a brand’s overall “impact” could be positive or negative.)

Brand cults-of-personality who were listed did quite well in the US & Canada results. The follicly-adventurous real estate and reality TV developer Donald Trump came in seventh, just above imprisoned home-economics guru Martha Stewart (eighth) and daytime TV icon and Pontiac shill Oprah Winfrey (tenth).

Two Internet companies, Amazon.com and eBay placed sixth and ninth respectively. Both brands survived the dot-com bust and are thriving by heeding the qualities of successful offline brands: fulfilling a market need with reliable service.

Europe & Africa: IKEA inches up

Swedish retailer IKEA topped results in the Europe & Africa region in 2004. Although the Swedes may at times grow weary of the assemble-it-yourself furniture giant, the rest of Europe is still reveling in the opportunity to buy Scandinavian designs on a shoestring budget. Europe represents 81 percent of the furniture giant’s sales (North America is 16% and Asia just 3%).

As for interest in the brand, consider that IKEA’s is the world's most widely read catalog with145 million copies printed in 2004 (and not a single naked person).

IKEA has come a long way from selling pencils but its success is not assured. Fellow Scandinavian furniture retailer, ILVA has plans to expand beyond its borders, adding to IKEA’s competitor list. First stop: the UK in ‘05.

Speaking of the UK, Virgin splits Swedish retail brands IKEA and H&M (third), by finishing second in Europe & Africa.

Virgin has so many businesses that it’s not possible to parse through what impacts our readers specifically. But at this point, it must be possible to live a complete Virgin life from transportation to communication, entertainment, drinks, cosmetics, financial services, and so much more. Next stop space, literally.

Richard Branson continues to delight or disgust depending on one’s perspective, but we suspect the voters for Virgin in this ranking are definitely fans. Sir Richard’s tremendous talent for making us feel like winners just for choosing Virgin cannot be underestimated, even if his success at reality TV should have been.

Swedish clothing retailer H&M operates on IKEA’s philosophy by offering inexpensive yet stylish clothing for men and women. Priced below or at the same level as other popular high street retailers, H&M leverages the “get what you pay for” formula to the customer’s benefit by offering frocks so low-priced they’re practically disposable. Competitors like Spain’s Zara, which placed eighth here, typically price higher, making purchasing less of a lighthearted decision.

The company’s extraordinary expansion brings it to a total of over 1,000 stores worldwide. Ninety percent of H&M’s sales happen beyond its borders, with Germany (not Sweden) as H&M’s biggest market. In 2004, H&M acquired Germany’s Gap chain, simultaneously increasing retail locations and decreasing competition.

Sliding since 2001, but still within the top five, Finnish telecommunications brand Nokia comes in fourth in Europe & Africa. Still the world’s leading cellphone maker, nokiaholics are regularly treated to design and technology innovations from multimedia messaging to Java applications to EDGE or GPRS wireless web access.

But why is Nokia sliding from its number one placings in 2001 and 2002? Probably because by failing to add a toaster to recent models, Nokia has become its own worst enemy. Ratcheting up its innovation half-life to an unmaintainable degree, Nokia disappoints fans when it slips with inconsistent designs or simply slows down to mere human levels.

In its ninth year of broadcasting, Al Jazeera rounds out the top five in Europe and Africa, coming in ahead of competitor BBC (at ninth place).

Accused of bias (an argument we have not the tipple nor time to enter into here), Al Jazeera presents an alternative point of view to those who until recently had only CNN or BBC to supply "world" news views. Compared with 2003, Al Jazeera has climbed over eight other brands to place fifth in both 2004 Global and 2004 Europe & Africa results.

 
Asia-Pacific: Sony sees enemies at the gates

Consumer electronic brands lead in Asia-Pacific with Sony in first followed by Samsung and LG. The close results of these brands perfectly reflect the zeitgeist of the marketplace in which they compete.

As the Asia-Pacific brand with the most impact in 2004 (eleventh Globally), Sony is working harder than ever to innovate in each of its various and varied divisions.

Film, music, electronics, and semiconductors: Sony is involved in just about every aspect of entertainment from delivery systems to content. In 2004, its music division merged with BMG to form Sony BMG, second now only to Universal Music.

Still, as popular as Sony is in the consumer market, it’s obviously struggling. Strong competitor challenges from every part of its business as well as the public’s endless expectation of lower prices for digital equipment, have led to lower profits across the industry. Sony is countering with an investment in R&D, partnering with its own competition including NTT DoCoMo and Samsung, to develop new technology, and even taking the long-expected and advised step of withdrawing from areas where it’s weak. (In 2004, determining that the PDA market will eventually cede to cellphones, Sony withdew the Clié from the global market to sell only domestically. It will refocus its resources on smart cellphones instead.)

Part of Sony’s headache must include the strong showing of Korean chaebols Samsung (second) and LG (third).

Although Samsung’s businesses sprawls from semiconductors to oil and textiles, we assume the brand impact measured here is from its consumer electronics division Samsung Electronics.

Like Sony, Samsung now fights on many different fronts and ended 2004 by warning of lower profits than expected. But the Korean brand has been on a strong rise for the last couple years by turning its product from cheap to smart, investing in quality design and technology, and generally surprising consumers with competitively priced, quality products.

Samsung is also drawing praise in its appliance business. Now third in the global appliance sector (behind Whirlpool and Electrolux), Samsung unveiled smart products in 2004, such as the germ-free fridge.

Similar in scope to Sony and Samsung’s diverse businesses, LG places third among brands with the most impact. The Korean consumer electronics brand appears to be trying to beat Samsung at its own game by countering a traditionally poor image with a better quality product.

Last year kicked off with LG’s pledge to become one of the top three global electronics brands. As part of the strategy, it has set its hopes on the handset division where the theory is that loyalty to the brand’s phones will create a halo effect on other product. Sales rose from US$ 6.9 million in 2000 to US$ 44 million last year (beating Sony Ericsson and placing fifth in the world for handsets).

Back to Japan where Toyota places fourth. The automaker’s serious approach to perfection is reflected in sales and prominence in the industry worldwide. Toyota is the largest automaker in Japan and second worldwide only to General Motors. (GM has 15% of the world market; Toyota rose to 13% while Ford sunk to 11%.) While not the number one automaker, Toyota did turn the most profit in 2004: US$ 11.1 billion (to GM’s 4.04 billion and Ford’s 2.67 billion).

Toyota also received many write ins for its Scion line (a sub brand in the US), which seems to be gaining enormous interest beyond the brand’s traditional market.

Ranking fifth in Asia-Pacific is Australia’s Lonely Planet. No longer targeting the backpacker segment, the 31-year-old travel guidebook brand has grown more conservative with age. Its more mainstream approach to content has attracted a larger readership while also placing the once strongly differentiated brand squarely in the path of competitors.

The brand has made good use of the Internet with its travel forum Thorn Tree, and branched into other related guidebook areas such as restaurants and activities. But Lonely Planet’s challenges still lie at the core of its product’s expertise. The right (or wrong) guidebook has the potential to have a substantial impact on one’s life via that emotional connection brands are always looking so hard to establish. Feeling well led when encountering the unknown cannot be underestimated and can lead to lifelong brand loyalty. It is for this reason that Lonely Planet's overwhelming priority should be constant quality control of its content.

After weathering colossal threats to the travel industry in the last three years (SARs, recessions and September 11th), it will be interesting to see how Lonely Planet now handles the rewrite on Asian titles affected by the tsunami to compensate for resorts and “places to eat” that are no longer there.

Rounding out the top ten in the region are, respectively, Singapore Airlines and Qantas, the financial mammoth HSBC, Japanese automaker Honda, and nudie drinks, Australia’s answer to the well-publicized Innocent Drinks brand in the UK.

Latin America: Cemex cements top spot

At the top of the 2004 Latin America brand rankings is Mexican cement brand Cemex. The third largest cement company in the world, Cemex’s recent success can be traced in part to Mexico’s housing boom, as an increase in government mortgage loans has led to an increase in development. However the brand’s finishing is surprising when compared to other regions’ tech and retail favored results.

Nearly a hundred years old, Cemex reported that 2004 net income was more than double 2003’s net. Growing at a comparable rate is Cemex’s debt, now at US$ 5.6 billion, which the company claims is one percent less than the year before. At this rate, Cemex should be debt free just in time for Mexico to reclaim Texas and California.

Three beverage brands land in Latin American’s top five; Mexico’s Corona places second, Cuba/Bermuda’s Bacardi places third and Chile’s Concha y Toro is fifth (knocking off Café de Colombia), leaving bakery brand Bimbo (fourth) to soak in all the booze.

These rankings represent no change from the 2003 Readers’ Choice Award results for Central & Latin America.

Grupo Modelo’s Corona holds the majority of its home market in Mexico, and it does an effective job of selling an image of sun and sand to the rest of the world.

In 2004, Bacardi added to its stable of brands (which includes Dewar’s, Bombay and Martini), including the (estimated) US$ 2 billion purchase of the incredibly successful Grey Goose brand from Sidney Frank.

Chilean wine brand Viña Concha y Toro reflects the overall healthy Chilean wine industry. Chile’s wine market increased 26 percent between September 2003 and October 2004, and of that market, Concha y Toro holds more than 20 percent between its fifteen vineyards. Sales for 2004 were up 3.8 percent with more than half of the revenue coming from exports to nearly 100 countries. The brand follows the Chilean industry model of offering good quality wine at popular price points, but it receives a lot of attention, praise and awards from critical entities like Wine Spectator, Wine Enthusiast, Descorchados and Wines and Spirits.

Mexican brand Bimbo, the third largest bread maker in the world and market leader for flour-based products in the Americas, reported year-over-year increased sales of 7.7 percent in Mexico in 2004 (in the rest of Latin America sales were up 4.9 percent from 2003). Its US sales dip has been blamed, in part, on the lo-carb fad.

With no monumental news in 2004, it becomes difficult to know exactly why our voters rated this brand with such a high impact. Still, like the coffee (and arguably the alcohol) brands in the survey, bread is a daily part of most lives, and no one does bread quite like Bimbo.

Brands rounding out the top ten in Latin America include Brazilian flip-flop brand Havaianas, capturing voters’ fancy as a footwear trend, and finishing sixth. It was followed by Mexican airline Aeroméxico at seventh place.

Although Café de Colombia slipped to eighth (from fifth in 2003) this National Federation of Coffee Growers is still one to watch. Second behind Brazil as the world’s largest coffee producer, Colombia organizes its relatively small individual growers under the more powerful Café de Colombia brand (sub-brand and retail outlets include the Juan Valdez brand).

In addition to reaching more markets abroad, Café de Colombia hopes to brew domestic interest in its own product at home. Presently Colombians only drink 1.2 million of the 12 million sacks of coffee sold each year by the brand.

Rounding out the top ten for Latin America brands are Brazil’s largest industrial company, Petrobras (ninth) and the nation’s cosmetic brand Natura (tenth).

Methods to the Madness: What, who, when, how

The annual Readers’ Choice Awards are a chance to recognize the brands that have the most impact on our lives each year. Impact can be either positive or negative.

A total of 1,984 brandchannel readers from 75 countries voted online between November and December 2004.

A shortlist for each region is provided but readers are given a chance to write in brand(s) to compensate for omissions on the part of brandchannel.

The shortlist comprises brands that were highly visible that year. Write in votes carry equal weight to listed brands unless the brand is already listed in the shortlist, in which case we accept up to 10 write ins for one brand.

Voters are allowed to vote for up to five brands per region and complete the demographics section once. Respondents can only vote once per region. No section of the survey is mandatory, which explains the varying response rates by region.

Respondents per region equal: 1,984 for Global, 935 for US & Canada, 858 for Europe & Africa, 655 for Asia-Pacific, and 408 for Latin America.

Voting is open to anyone. Rankings are compiled purely on the basis of reader results. We do not influence the results through weighting, sampling or a flawed electoral college.

Our readers are interested in brands and branding. They are online and are therefore presumably familiar with technology. Of course, they are above average in intelligence, curiosity, good looks, taste, charm.

Sixty percent of voters identified themselves as men; the strongest group of voters fell in the age range of 26 to 35 years old.

Previous year results are equally fascinating: 2003, 2002 and 2001 or view charts of this year and previous year’s surveys.

    

[31-Jan-2005]

 
  
  

Brandchannel will be conducting a similar survey for 2005. For those wishing to participate in the initial drafting of a shortlist in the autumn of 2005, please email us with a brief description of your expertise and regional background, you will be contacted in September/October of 2005.

If you have a question about the rankings or just want to chat, you may email us or even call at +1.212.798.7663.

Robin D. Rusch is Editor-in-Chief of brandchannel.

     
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Jan 10, 2005 Cars Make Inroads Online -- Edwin Colyer
  Automakers take risks online with co-branding and interactive options not seen offline.
   
 
Jan 3, 2005 Local to Global: Easy as 1-2-3? -- Randall Frost
  JetBlue and other smaller regional brands strive to disprove the Rule of Three.