1. America, the World, and the New Challenges for Global Brands Tom Miller Managing Director, Centers of Excellence NOP World

2.  How the World Sees America Today  What’s Changed Since the 1990s  Americans Themselves: A Greater “Disconnect”  Is America in Tune with the World’s Values?  So What? The Impact on US Brands  The New Challenges for Global Brands Presentation to Cover:

3. National sample (North America 17%; West Europe 17%) National urban (Developed Asia 10%; Central Europe/Middle East 8%) National urban w/o lowest SES (Developing Asia 30%; Latin America 11%; Other markets 6%) Representative of 1.3 billion consumers worldwide Listening to 30,000+ consumers worldwide since 1995— 1,000 1-hour+ interviews per country with people aged 13-65 Roper Reports™ Worldwide 2004

4. How the World Sees America Today

5. What Are Personal Values? Rene Magritte: “Personal Values” “The things that act as the guiding principles in your life and give meaning to your life” or Whatever is important to you

6. American Culture: Wealth, Power, Freedom, Fun % who attribute listed value as important to American culture (base: value is extremely/very important to them) Total Population Weighting

7. % who do not attribute listed value as important to American culture (base: value is extremely/very important to them) American Culture: Not Modesty, Tolerance, Tradition Total Population Weighting

8. Countries Most Aligned With American Culture % who attribute their values as important to American culture (base: value is extremely/very important to them) 72% USA

9. Countries Least Aligned With American Culture % who attribute their values as important to American culture (base: value is extremely/very important to them) 72% USA

10. What’s Changed Since the 1990s

11. World’s Perception of America: More Power, “Striver” Values 2004 1999 Wealth Freedom Sex Having fun A varied life Health & fitness Enjoying life Adventure Power Self-reliance Material security Internationalism Knowledge Wealth Power Enjoying life Freedom Having fun Pleasure Status Ambition Health & fitness Material security Knowledge Self-reliance Sex Based on consistent values set and total population weighting (1999/2004) Top values attributed to American culture (base: values extremely/very important)

12. Most Notable Declines: Internationalism, Altruistic Values Drop Based on consistent values set and total population weighting (1999/2004) 1999 Rank2004 Rank Change in Rank Internationalism1129-18 Equality2842-14 Excitement1427-13 A varied life517-12 Adventure616-10 Curiosity1626-10 Sex313-10 Justice2635-9 Social tolerance4352-9 Social stability3341-8 Individuality1724-7 Open-mindedness2430-6 Preserving the environ.3036-6 Change in rank of values attributed to American culture (base: value is extremely/very important)

13. Values Alignment: Shifts from 1999 Change in rank (1999 v. 2004): % of total values attributed (by listed country) to American culture (base: total values that are extremely/very important to country)

14. Americans Themselves: A Greater Disconnect

15. Americans Associating Fewer Values with Their Own Culture Total Population Weighting % Americans who attribute listed value as important to American culture (base: value is extremely/very important to them)

16. Americans Associating Fewer Values with Their Own Culture Total Population Weighting % Americans who attribute listed value as important to American culture (base: value is extremely/very important to them)

17. Holding Steady: Power, Freedom, Fun, Family % Americans who attribute listed value as important to American culture (base: value is extremely/very important to them) Total Population Weighting

18. Unemployment 5.7% Then and Now: Disconnect Explained? Unemployment 4.1% 19992004 13% concerned about recession and unemployment 27% concerned about recession and unemployment 34% now is a good time to buy 26% now is a good time to buy KYOTO AGREEMENT Corporate Trust?

19. Is America in Tune with the World’s Values?

20. Top Global Personal Values Protecting the family 69% Honesty61 Health and fitness57 Friendship51 Self-esteem49 Freedom49 Knowledge49 Justice49 Self-reliance47 Stable relationships43 Enduring love43 % global respondents saying value is extremely/very important

21. Protecting the Family: Muslim Nations Disagree Global Average 76% U.S. Average 84% % who attribute protecting the family as important to American culture (base: protecting the family is extremely/very important to them) Top 10 and bottom 10 countries

22. Global Average 54% U.S. Average 60% % who attribute honesty as important to American culture (base: honesty is extremely/very important to them) Honesty: Western Europe, Middle East Say “No” Top 10 and bottom 10 countries

23. Global Average 87% U.S. Average 90% % who attribute freedom as important to American culture (base: freedom is extremely/very important to them) Freedom: Definitely Seen as an American Value Top 10 and bottom 10 countries

24. Global Average 67% U.S. Average 73% % who attribute justice as important to American culture (base: justice is extremely/very important to them) Justice: Middle East, Western Europe Less Aligned Top 10 and bottom 10 countries

25. So What? The Impact on US Brands

26. In 2002, Awareness and Use of Many Global Brands Were Rising Familiar Use/Own/ Watch 15.8 16.5 3.7 4.3 Change from ’01 to ’02* *Among brands consistent between 2001 and 2002

27. In 2003, Consumers Were More Hesitant Average number of brands familiar with* 20022003 17.417.6 Average number of brands own/use/watch 20022003 4.64.5 Average number of brands “really like” 20022003 5.55.9 *Among brands consistent between 2002 and 2003

28. And Now, Global Brands Have Started to Decline Slightly Average number of brands familiar with* 20032004 18.618.3 Average number of brands own / use / watch 20032004 4.94.8 Average number of brands ‘really like’ 20032004 6.05.8 *Among brands consistent between 2003 and 2004

29. 20032004 Familiar with American Brands 59%57% Familiar with non-American Brands 70%69% Like American Brands 30%29% Like non-American Brands 36%36% Use American Brands 30%27% Use non-American Brands 24%24% Global Brand “Fundamentals” Using a consistent set of 15 American brands and 13 Non-American brands between 2003 and 2004

30. A Brand I Trust 20032004 American Brands36%35% Non-American Brands48%47% Coca-Cola55%52% McDonald’s 36%33% Nike56%53% Microsoft45%39% Using a consistent set of 14 American brands and 11 Non-American brands between 2003 and 2004

31. A Brand Associated with Honesty 20032004 American Brands18%15% Non-American Brands19%16% Coca-Cola18%15% McDonald’s 19%14% Nike14%11% Microsoft18%12% Using a consistent set of 14 American brands and 11 Non-American brands between 2003 and 2004

32.  Growth in “fundamentals” has stalled, even declined  New opportunities arising for local brands, especially in rapidly-growing markets like India, China  American brands: a period of reassessment?  Worsening attitudes toward US culture could have impact in the marketplace  Basic attributes necessary for brand greatness remain  Quality, reliability, value, of course  Trust, honesty possibly more important than ever  Change in the balance of “glocal” strategies? New Challenges for Global Brands

33. Thank You