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Most Valuable Brand Names


Claim:   The three most valuable brand names on Earth are Marlboro, Coca Cola, and Budweiser, in that order.

OUTDATED

Example:   [Collected via e-mail, August 2001]

I saw this statement in an e-mail. Is this true?

"The 3 most valuable brand names on earth: Marlboro, Coca-Cola, and Budweiser, in that order."
 

Origins:   The value of a recognized brand name is both difficult to estimate and difficult to overestimate. Certainly companies with long established, widely recognized brand names don't overestimate their value, spending millions of dollars in advertising every year not to directly promote sales of specific products but simply to keep their brand names in front of the public. So of all the millions of brands in the world, which ones are at the top of the heap? Which companies have been the most successful at constantly nurturing their brands to keep pace in a rapidly changing world?

A long-circulated bit of Internet trivia attempts to surprise readers by informing them that the "three most valuable brand names on Earth"
are ones they wouldn't necessarily peg for the very highest spots, namely Marlboro, Coca-Cola, and Budweiser. But that tidbit was gleaned from brand rankings produced back in the 1990s, and a good deal has changed in the business world since then.

Assigning comparative values to brand names is a process that involves a number of subjective elements, so brand rankings vary depending upon who is doing the ranking and what criteria they use. One of the most prominent organizations in this field is Interbrand, a global branding consultancy that (among their other business activities) assigns values to brand names and publishes an annual list of brand name rankings, subject to some qualifications:
There are several criteria for inclusion in Interbrand's annual Best Global Brands report. The brand must be truly global and needs to have successfully transcended geographic and cultural boundaries. It must have expanded across the established economic centers of the world, and be establishing a presence in the major markets of the future. In measurable terms, this requires that:
  • At least 30 percent of revenues must come from outside the brand's home region.
  • It must have a presence in at least three major continents, as well as broad geographic coverage in emerging markets.
  • There must be sufficient publicly available data on the brand's financial performance.
  • Economic profit must be expected to be positive over the longer term, delivering a return above the brand’s operating and financing costs.
  • The brand must have a public profile and awareness above and beyond its own marketplace.
These requirements — that a brand be global, visible, and relatively transparent in financial results — lead to the exclusion of some well-known brands that might otherwise be expected to appear in the ranking. The Mars and BBC brands, for example, are privately held and do not have publicly available financial data. Walmart, although it does business in international markets, often does so under a variety of brands and, therefore, does not meet Interbrand's global requirements.
Interbrand's 2013 ranking of the Best Global Brands finds that things have changed considerably since the days when Coca-Cola, Marlboro, and Budweiser held down the top spots on the "most valuable brand name" charts, however. According to Interbrand, Coca-Cola is still in a strong third-place position, but Budweiser has slipped all the way down to #31, and Marlboro no longer appears in Interbrand's top 100 at all (possibly due to Marlboro's lack of a social media presence).

Millward Brown's BrandZ 2013 list of the "Top 100 Most Valuable Global Brands," which is more inclusive than Interbrand's and is based on a database of feedback from millions of consumers and professionals, shows the Coca-Cola and Marlboro brands still close to the top at #5 and #8, respectively, with Budweiser midway down at #34.

A comparison of the two organizations' most recent rankings shows a good deal of similarity in the top seven spots:

Interbrand (2013) Brandz (2013)    
#1 Apple #1 Apple
#2 Google #2 Google
#3 Coca-Cola #3 IBM
#4 IBM #4 McDonald's
#5 Microsoft #5 Coca-Cola
#6 General Electric #6 AT&T
#7 McDonald's #7 Microsoft

But Mark Ritson, writing for MarketingWeek, noted that the different approaches employed by Interbrand and BrandZ can also produce some quite disparate results:
The two most well-regarded brand valuations are provided by Millward Brown's BrandZ Top 100 and Interbrand's Best Global Brands list. Both produce the same thing: a ranking of the 100 most valuable brands in the world, and each year we get to see their latest assessments.

The problem for the two companies involved, and marketers in general, is how far apart their annual estimates of brand value tend to be. For example, in 2010 BrandZ estimated the value of the Google brand to be $114 billion, making it by far the world's most valuable brand and suggesting that approximately 75% of the overall market capitalisation of Google can be attributed to its brand value.

In contrast, Interbrand valued Google’s brand at $44 billion in 2010, well behind brands like Coke, IBM and Microsoft. That's more than a minor difference of opinion with BrandZ — that's $70 billion worth of disagreement. Or, to put it in perspective, the combined 2010 brand values of Porsche, Barclays, Audi, VW, HSBC, Ford, Nike, Burberry and Pepsi.

The vast $70 billion difference is not derived from a difference of philosophy — both Millward Brown and Interbrand calculate the value of a brand the same way. Both firms also have access to the same financial data for each brand. The difference comes from the method each uses to estimate a brand's overall strength. BrandZ uses its own internal survey of "2 million consumers in 30 different countries" to assess brand strength. Interbrand relies on its "pool of global experts from over 40 countries" who each complete a 10 item assessment of every brand's strength.
Additional information:
    Best Global Brands (2012)   Best Global Brands (2013)
  (Interbrand)
    Top 100 Most Valuable Global Brands (2013)   Top 100 Most Valuable Global Brands (2013)
  (BrandZ)
Last updated:   18 October 2013

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