June 4, 2007 We are all familiar with brands and we have all developed long term relationships with these consistent names. Every day we all make choices about which brands we interact with and each of us has our own relationship with the brands we choose – creating a consistent and ultimately worthwhile relationship with the client/customer is an incredibly complex process. Every interaction with the brand helps to define our view - is it reliable, is it the best, does it reflect who I am? Put all those thoughts together and you vaguely define the incredibly complex brand organism. The second annual BRANDZ Top 100 Most Powerful Brands ranking was announced recently and the world has a new heavyweight champion. As a commercial entity, the number one spot is the holy grail, and the new champion is, astoundingly, Google. Millward Brown’s unofficial world championship ranking for brands ascribes Google a brand value of US$66 billion, 50% more than Coca Cola and double that of Toyota, McDonald’s, Nokia or American Express. The rise to the top of the heap took less than a decade with the final ascent seeing Google rocket past General Electric (founded 1878 - US$62 billion), Microsoft (1975 - US$55 billion) and Coca-Cola (1885 - US$44 billion). A free summary of the report is available for download here.
Developed by Optimor, research company Millward Brown’s specialist financial and ROI arm, the ranking identifies the most powerful brands in the world as measured by their dollar value. The study uses the company’s BRANDZ data that provides brand equity measures for more than 30,000 brands. The brand ranking was introduced last year and is unique because it is the first to combine consumer research with public financial data to measure the contributions brands make to the bottom line. Additionally, it is the only ranking to quantify consumer sentiment about a brand’s momentum and future prospects, and the first to focus on “market facing” brands as opposed to corporate brands.
"Success stories from this year's BRANDZ Top 100 demonstrate that winning brands leverage major market trends effectively to create business value," said Joanna Seddon, global CEO Millward Brown Optimor. "Strong brands are capable of extending into areas of opportunity to access new revenue streams and to help businesses respond to market changes."
The most notable trends emerging from this year's BRANDZ Top 100 include:
The rise of the East
Today, consumers in emerging markets, especially the ones known as the BRIC countries (Brazil, Russia, India, China) have more disposable income than ever before. In order to succeed in the BRICS, Western brands must offer products or services that are relevant to the local consumers. Fast food brands such as KFC (US$4.5 billion) and McDonald’s (US$33.1 billion) appeal to BRIC consumers looking for a Western dining experience. Apparel brands including Nike (US$10.3 million), Levi’s (US$1.0 billion) and Zara (US$6.5 billion) fill the gap between local brands and imported luxury brands by providing “affordable fashion” to young consumers. Luxury brands such as Louis Vuitton (US$22.7 billion), Rolex (US$5.4 billion) are also seeing significant growth in these markets as wealthy consumers look for brands that represent their status.
Convergence is the hot topic in technology. The ability to mix and match different services (voice, data, GPS, music, internet, email etc) and deliver them over different devices has the potential to improve the lives of consumers. In the face of increasing complexity, branding has been leveraged to simplify and contrast different offerings: from Apple's (US$24.7 billion) basics-but-smarter iPhone to Sony Ericsson's Walkman-branded music phones to Nokia's (US$31.7 billion) all-in-one mobile computers, manufacturers are crafting coherent offerings that are aligned with their brand identity. Like Apple and Nokia, strong brands are able to stretch so parent companies can increase revenue streams by investing in high growth ventures.
Delivering on Corporate Social Responsibility
Delivering on the promise of corporate social responsibility helped boost the value of major brands including BP (US$5.9 billion), Shell (US$ 4.7 billion) and Toyota (US$33.4 billion). BP was the first major oil company to address climate change with its 'beyond petroleum' brand positioning. BP executed on that brand positioning to become one of the top three global suppliers of solar energy. Shell followed suit. Toyota's success in marketing its hybrid model Prius contributed to its positive brand image and its continued leadership in the automotive sector.
Health conscious consumers
Rising concerns about healthy eating disrupted the fast food industry that had enjoyed continuous growth since the 1980s. Most fast food chains, including McDonald's (US$33.2 billion), repositioned themselves with the introduction of healthier food alternatives. Burger King (US$1.4 billion) took the opposite stance through marketing campaigns that called attention to the chain's original offering: the high-calorie and masculine hamburger. The 63% increase in Burger King's brand value proves that strong brands succeed whether they follow or defy market trends.
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