Interbrand Report: Brand Value
Proves Stable Against Volatile Stock Market Valuations
New York, NY, July 27, 2001 In the 2001 report card of the world's most
valuable brands, BusinessWeek has teamed up with Interbrand to offer a
ranking of 100 global brands by dollar value. The ranking by Interbrand
Corp. is based on a rigorous analysis of brand strength. While it is
generally accepted that strong brands increase sales and earnings,
Interbrand's survey attempts to figure how much of a boost each brand
delivers, how stable that boost is likely to be in the future, and how much
those future earnings are worth today.
"Companies have realized that a vibrant brand, with its implicit promise of
quality, is an important asset. It has the power to command a premium price
among customers and a premium stock price among investors. It can boost
earnings and cushion cyclical downturns and now, its value can be measured,"
notes BusinessWeek associate editor Gerry Khermouch. "This report will help
assess which companies are managing their brands with skill and which
Coca-Cola (#1) has continued
to lose brand value from last year but nevertheless increased its lead as
the world's most valuable brand. Starbucks (#88) tops the chart with
greatest growth of 32% in this year's table thanks largely in part to its
aggressive global roll-out. And despite an overall loss of brand value,
McDonald's (#9) continues to rise high as the world's most valuable retail
With a loss of brand value of 38%, the most dramatic decline in this year's
Interbrand survey is Xerox (#46) which has failed to redefine its
proposition to both customers and employees in an increasingly competitive
market. Once a leading brand in the business services sector, it has lost
ground to HP and Canon (#41) due to a lack of clarity in its brand
proposition. Meanwhile, Samsung (#43) has seen a significant increase in
brand value, up 22%, driven largely by a shrewd shift in focus away from
semi-conductors toward branded products and heavy brand investment - notably
through the sponsorship of the Sydney Olympics.
Among automakers, Ford has suffered a 17% loss of brand value due to the
Explorer/Firestone tires recall, but remains the 8th most valuable brand in
the world. BMW (#22), on the other hand, is among the top ten in growth of
brand value, with an increase of 7%.
"The relative stability demonstrated in the value of brands re-affirms the
theory that the brand is a company's most enduring asset," notes Jan
Lindemann, Interbrand's global director of brand valuation. "Despite a
period of great volatility in stock market value, brands have escaped
short-term fluctuations relatively unscathed."
Interbrand calculated the
brand values using the method it pioneered 13 years ago and has since used
to value more than 2,500 brands. The value of a brand is based on two
principles: The marketing principle that brands generate and secure customer
demand and the financial principle of net present value of future earnings.
Brand value is calculated as the net present value of the earnings that the
brand is expected to generate and secure in the future. The table identifies
the 100 most valuable global brands with a value greater than $1 billion.
Brands were selected according to two criteria: First, the brands had to be
global, generating significant earnings in the main global markets. Second,
there had to be sufficient marketing and financial data publicly available
for preparing a reasonable valuation.
BusinessWeek's cover story, "The World's Most Valuable Brands," (Aug. 6
issue) is available online at www.businessweek.com.
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Peter De Legge is an
eBusiness strategy and Marketing
Consultant with over 10 years of Marketing/Marketing Communications
experience, primarily in the business to business arena. To learn more about his services, visit his Web site at http://www.businessmarketing.net.
© Copyright 2001, Peter De Legge. All
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