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August 4, 2003
Interbrand, working in conjunction with BusinessWeek,
recently released its annual rankings of the 100 most
valuable brands in the world. A brand may relate to an
entire company (e.g., McDonald's Corp.), or just a portion
of a company (e.g., Marlboro). Brands that made the ranking
were all estimated to have a value of greater than $1
billion. They also had to be global in nature, meaning
they must derive at least a third of their sales from
outside their home countries and have significant
distribution throughout the Americas, Europe, and Asia.
Finally, they must have publicly available marketing and
financial data. These criteria excluded some of the larger
brands, including Visa International, the BBC, Mars and
(in all likelihood) Google.
Brand value was calculated by Interbrand as the net
present value of the earning that the brand is expected
to generate and secure in the future. The rankings were
based on a detailed analysis of how much of each product's
sales are driven by the brand name, weighted for such
other factors as market leadership, stability, and the
ability to cross national borders. Data to support the
brand rankings was supplied by J.P. Morgan Chase & Co.,
Citigroup, and Morgan Stanley.
Frankly, I think there is a lot of hocus pocus and
subjectivity that goes into these numbers. Nonetheless,
there clearly is value in these brands and undertaking the
process of making this kind of an analysis on an annual
basis can truly allow one to see real trends and relative
movements, regardless of the validity of specific numbers.
Here is Interbrand's listing of the top 10 most valuable
brands, including estimated brand value and company name.
I've also included a past or present slogan for the
organization -- slogans are a topic we will likely
revisit in a future article:
- $70 billion Coca-Cola - "Real"
- $65 billion Microsoft - "Where do you want to go today?"
- $52 billion IBM - "Solutions for a Small Planet"
- $42 billion GE - "imagination at work"
- $31 billion Intel - "Intel inside"
- $29 billion Nokia - "Connecting People"
- $28 billion Disney - "Where friends share the magic"
- $25 billion McDonald's - "You deserve a break today"
- $22 billion Marlboro - "Come to where the flavor is"
- $21 billion Mercedes - "The future of the automobile"
More important than absolute ranking is taking notice of which
brands gained and lost the most value over the past year.
The top gainers were:
- Ranking 25, Samsung gained 31% in value, going from
$8.3 billion to $10.9 billion (this is the second year
in a row that Samsung has been identified as the
fastest growing brand.)
- Ranking 12, Hewlett Packard gained 18% in value, going
from $16.8 billion to $19.9 billion -- emerged even
stronger after swallowing Compaq
- Ranking 35, SAP gained 14% in value, going from $6.8
billion to $7.7 billion
The top losers were:
- Ranking 76, Reuters lost 28% in value, going from $4.6
billion to $3.3 billion -- lost ground to Bloomberg in
a weak market.
- Ranking 34, Kodak lost 19% in value, going from $9.7
billion to $7.8 billion -- steadily falling sales
impacted by digitalization of photography.
- Ranking 14, Ford lost 16% in value, going from $20.4
billion to $17.1 billion -- Europe and Japan are gaining
ground.
Interactive media-related brands on the list included AOL,
ranked at 64 and losing 8% in value; Yahoo!, ranked at 65
and gaining 1% in value; and Amazon.com, ranked at 74 and
gaining 7% in value. I was surprised not to see eBay on the
list--most likely they were excluded from consideration for
not being sufficiently global in nature to meet the
selection criteria.
So how did Samsung, which has doubled in estimated brand
value over the past two years, achieve such stellar results?
It certainly didn't happen by accident.
"Chairman Kun-Hee Lee identified and emphasized the great
competitive value of building a premium brand in 1996."
said TaeHo Kim, Vice President, Corporate Communications
Department of Samsung Group. "Because of this, we have
launched a coordinated global program to make Samsung a
top international brand and have led the effort by
establishing a unified corporate identity that extends to
all of our marketing activities."
"The continuously strong rise of Samsung's brand value
reflects the company's commitment to invest in its brand on
a global scale and make brand value a key corporate target
throughout the organization from including the CEO and all
employees. Samsung has successfully made brand building the
key focus of its marketing strategy including product
development, selection of distribution channels, channel
marketing as well as external and internal communications,"
said Jan Lindemann, Global Managing Director of Interbrand.
"Samsung's key success factor is management's ambition and
determination to make Samsung the leading brand in its field
and to put the required investments and organization behind
the brand."
My sense is that Samsung came to the realization that the
critical factors in building its brand were the strength and
quality of the organization's relationships and the ability to
provide measurable benefits to customers. Samsung's vision
encompasses a world where interconnectivity, new levels of
interactivity and accessibility, and a globalized society
drive a demand economy. As Nick Wreden, "Brand Futurist"
and author of the book "FusionBranding: How To Forge Your Brand
for the Future," points out:
"Competition in the demand economy is based on the organization,
orchestration, and integration of supply chains, or an
ecosystem of suppliers, manufacturers, partners and customers.
That's because it will take a coordinated, interactive supply
chain to deliver tailored solutions to customers whenever and
wherever they want. No company will be able to brand, no matter
how much is spent on marketing, without an integrated end-to-end
supply chain."
Samsung's example allows observations of a set of principles any
organization can use to achieve substantial gains in brand equity:
- Samsung didn't just focus on the next quarter. A brand
management plan must look out five and ten years into the future
at a minimum.
- Samsung realized and had the courage to make substantial
organizational shifts and changes in conjunction with its brand
strategy.
- It has to start at the top. Samsung's Chairman Kun-Hee Lee
made a personal decision and commitment to increase the value
of the Samsung brand. He didn't delegate the job to his staff,
rather, he made it his own personal mission. Whether the leader's
title is chairman, CEO, president, managing partner, or brand
manager, the commitment and direction has to come from the top.
- Kun-Hee Lee may not be a rocket scientist, but he acted
like one -- he didn't just tell his employees he wanted to
increase the value of the brand, he assured that a detailed
plan was laid out to achieve the objective (see the The Korean
Herald article referenced at the end of this essay). And, very
importantly, the plan was not advertising centered -- rather, it
placed a focus on product development, selection of distribution
channels, channel marketing as well as external and internal
communications.
In most organizations, marketing is separated at arms length
from technology, product development and delivery. It takes a
very special individual or team to have the breadth and scope
of technical and marketing skills to transcend these barriers.
Brands that succeed in the future will do so by melding and
integrating brand considerations throughout the enterprise. And
that is only likely to happen if the organizational command
chain puts in place the processes that assure that it occurs.
- Samsung didn't run and duck for cover just because the economy
became weak. Rather, they appear to have viewed it as an
opportunity for to move ahead of potential competitors.
Alas, what if your business didn't make the top 100 this year?
Well, you are in good company. It just so happens that Interbrand
neglected to include ADASTRO - "Business IS Rocket Science" and
it's parent company, Starhold - "Envision & Engage" in the top
100 as well. But we rest assured knowing that processes are in
place to turn our own enterprises, as well as those of our
clients, into significantly more valuable businesses over
the coming years.
Business IS Rocket Science. If you plan and strategize key
decisions just like a rocket scientist would, you will maximize
your opportunities, increase the value of your business, and
shape the best possible future for your organization.
Additional Reading
BusinessWeek, August 4, 2003
America Has Image Woes, Not Its Brands
http://www.businessweek.com/magazine/
content/03_31/b3844021_mz046.htm
and
http://www.brandchannel.com/images/
home/bgb_2003.pdf
BusinessWire, July 25, 2003
Samsung Named the Fastest Growing Global Brand Second Year
in a Row by Interbrand
http://www.businesswire.com/cgi-bin/
cb_headline.cgi?&story_file=
bw.072503/232065196
FusionBranding: How To Forge Your Brand for the Future
by Nick Wreden
http://www.fusionbrand.com/
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