• by Karl Greenberg , August 15, 2007

Iconic brands are losing some of their luster--especially in developing markets, according to a new study by GfK Roper Consulting. The New York-based firm's new "Worldwide Power Brands" study says U.S. brands in particular are losing ground versus European and Asian marquees among consumers worldwide, in terms of familiarity, appeal and advocacy.

The yearly study, which the firm has conducted since 1997, bases its numbers on a December-to-January poll of 30,000 consumers in 25 countries. Only six U.S. brands ranked among the top 15, even though the study included 33 U.S. brands versus 18 brands from elsewhere.

Five of the six leaders in U.S. brands declined in "power"--Coca-Cola, Colgate, McDonald's, Nike and Pepsi. Only Disney experienced an upswing, and the company also enjoyed the greatest increase in that measure among all American brands studied.

The study said BMW's worldwide status increased more than any other brand researched for the study. Sony, Honda, Mercedes-Benz, Volkswagen and Nestle, among the top brands, also saw improved value. Microsoft, National Geographic and Google--none of which were in the top fifteen--also saw big gains in rep worldwide, per the study.

The biggest rankings descent in the study was European electronics firm Philips. Seven of the ten brands experiencing the greatest declines were U.S. companies: Coca-Cola, Kodak, Gillette, Colgate, McDonald's, Ford and Nike, and Japanese brand Panasonic and Sony-Ericsson, which is a joint Japanese-Swedish venture. Kodak, Gillette and Motorola were all off the top-15 list, because they were replaced by BMW, Mercedes-Benz and Honda.

Jennifer James, senior consultant with the firm, says the study--which polls consumers in North America, Western Europe, Asia and developing countries--involves an hour-long, in-person interview of national representative samples, excluding poverty-level citizens. The interviews involve both brand-impression queries and also questions about technology use, personal values and consumer confidence, "so it's a holistic consumer study of which the brand section is just one part."

She adds that the brand-impression portion of the survey, from which the brand power study culls data, avoids issues around corporate image. "It's not about corporate moral behavior at all," she says. "For example, we might show consumers a list of 60 brands, and ask which of them are they familiar with. Which do you really like, which do they advocate to others, which do they use and which do you trust?" she says.

She also cautions that since the study is relative, companies' rankings should not be interpreted as absolute or a reflection of a brand's year-over-year marketing performance. "Often they go up and down because they are indexed against one another. Coca-Cola's score might have gone up, but if others went up more, it would appear as if Coke's score had dropped," she says.

That said, James says this year's results were striking because of the influence developing markets now have on global brand rankings.

Consumers in places like China, Brazil and India, she says, are now much more sophisticated, as their markets have become saturated with globally recognized brands. "That's huge because those markets have been driving global brand growth for so long. They are saturated, and consumers there are becoming much more discerning. If you look at likeability, for instance, across all brands, it has gone down consistently over the last couple of years, driven by emerging markets," she says.

Does global consumer perception predict global sales performance?

"Sony was knocked off the top in last year's study (based on interviews in 2005), and their performance did go down last year," says James. Again, that may have to do with what the study says about relative positioning of brands. Panasonic and Philips, for example, are mature brands whose ranking dropped significantly, but they are also competing against a crowded market segment that includes relative newcomers from Korea, LG and Samsung. "Even though LG is not on top, it has gone up consistently," says James.

She says brands would do well to offer consumers--through products and marketing--opportunities to engage the brand via product development and consumer-created content.

"Brands do well that allow consumers to customize. So, it's a challenge for companies not in categories that allow consumers to engage easily with either product development or market messaging," she says. "Many of our clients are asking us how to capture consumer ideas for new products--how do they allow them to be part of the research process, from pretty much every aspect of the brand and brand communications."