Global forces: Truly valuable brands are global. Jane Bainbridge reports on Interbrand’s international brand survey

Globalisation is the word on every chief executive’s lips these days and a glance at this year’s league table of global brands shows why.

Globalisation is the word on every chief executive’s lips these

days and a glance at this year’s league table of global brands shows

why.



Most of the brands big enough to make it into Interbrand’s league have

seen their value grow substantially over the past year, although there

are of course some notable exceptions.



This is the second year Interbrand has compiled this brand value table

with the help of data from Citibank. With two full years’ worth of data,

it becomes an even more valuable indicator of the health of the global

elite.



What must be remembered with this league is that it is ranking brand

value. So, for example,despite a company like Amazon’s slide in share

price, its brand value has increased 233% with its focus on expanding

its service.



One of the biggest stories in 2000 is Coca-Cola’s declining brand

value.



Coke has always looked a little exposed among the top ten brands, with

its single product offering. In last year’s league, Interbrand’s brand

valuation director, Raymond Perrier, said rather aptly: ’To me Coke

looks more like a brand model of the past.’ It would appear he was

right.



Coca-Cola has gained the dubious honour of being the only top ten brand

to go down in value.



Interbrand director Jan Lindemann says: ’The overall expected demand

creation and growth has come to an end. Although its outlook is still

good, it isn’t as good as it was two years ago. Coke has lost its

invulnerability, I wouldn’t write it off, but in some markets it can’t

get the same consumption rates.’



He adds: ’There are some markets left, but in Europe and Latin America

it’s reached its peak. Coca-Cola is a difficult brand to stretch. It has

tried it, but it’s never really taken off. It wants to be more regional,

but I don’t know if that will work.’





Calculating value



The criteria for making it into the table remain the same: the brands

must be global; the companies must be public with publicly available

financial information; and non-commercial organisations are excluded.

Brand value is determined by a collation of brand strength (based on

factors such as leadership and market stability), financial and analyst

reports, revenue and profit figures.



But no matter how much Coca-Cola may be sliding, it looks likely to hold

on to its top slot for some time to come. Microsoft - its nearest rival

- may have seen its brand value grow by almost a quarter in the past

year, but it has problems of its own.



While the high-tech crisis in the US stock market has taken its toll on

Microsoft’s market capitalisation, it is too soon to see how the impact

of the recent US Supreme Court ruling will affect the company. At the

moment, all of Microsoft’s products are bundled together under one

brand.



If it is split in two, we are likely to see Windows and programs such as

Excel as brands in their own right.



Although the value of the business will suffer from the break-up, the

value of the brands may increase. At the moment, as a semi-monopoly, the

brand as a choice factor is not so important (less than 20% of its

market capitalisation is now due to the brand). If it is broken up, the

branding differentiator will be much more important, says Lindemann.



The technology sector is winning hands down in the brand stakes, with

the top five being heavily technology-based. IBM is a classic example of

a company that has turned itself around with some strategic business

innovations. While 20 years ago its profits were primarily from

hardware, now around 40% is from consultancy. It is a company that has

adapted very well, says Lindemann.





Exceptional performance



But it is Nokia which turns in one of the most exceptional performance.

Nokia’s brand has always outstripped that of rival Ericsson, but they

were reasonably close last year. Over the past 12 months, the Finnish

company that started out making TV sets has pulled way ahead, especially

in emerging markets. While Ericsson has been the stronger in the

business-to-business arena, Nokia has performed much better on the

consumer side and has been much more focused on its brand.



As you would expect with brands of this size, many of the larger ones

remain relatively static, although their brand value is still

growing.



General Electric, Ford, Disney and McDonald’s all fall into that

category.



But what of new media brands - surely the internet stock crash will have

taken its toll? Yahoo!, AOL and Amazon all feature in the top 75. While

their market capitalisation may have been affected by stock market

fluctuations, these global players have established brands which are

proving to be more stable. These are the brands that have, to a large

extent, created their category.



Yahoo! and Amazon are the more globally established, while AOL has

focused on the US market and on exploiting its existing client base.



Lindemann says: ’The brand value relative to market capitalisation is

still small. Even if share prices drop further there is still intrinsic

brand value. If Amazon went bust the brand would be bought.’





The lap of luxury



One sector that has performed particularly well over the past year is

the luxury goods market. Its increase in value is partly because the

Asian markets have bounced back, but also because many of the brands

have repositioned themselves so that they can appeal to the luxury and

mainstream markets at the same time.



The likes of Gucci and Luis Vuitton have developed items that are

affordable to consumers who could never purchase the vast majority of

their collections.



Interbrand thinks this repositioning is part of a longer-term trend in

the luxury goods market, as it increases brand value significantly while

maintaining stability.



Car manufacturers have also stretched their brands. The Mercedes A Class

has taken the brand more into the mainstream, but has ensured the model

is sufficiently different not to alienate its existing customer

base.



But other brands haven’t adapted so well. Kodak, Heinz, Guinness and

Xerox have all suffered. Guinness is facing the problem of a mature

drinks market, while the others are operating in markets that are

becoming commoditised, and in which they cannot sustain a premium.



New entrants in the table are, not surprisingly, technology-based:

Cisco, Compaq, SAP, Philips and Samsung all feature for the first time.

Cisco, in particular, has worked much harder over the past year to be

more marketing-led.



Once again, Interbrand separates portfolio brands so that the big FMCG

manufacturers get a fair showing. P&G is still significantly ahead of

the field in terms of brand value but a bad year for it means its

dominant position is threatened.



One of the most important aspects of this table is that it proves what

stable assets brands are. Only one brand, Marriot, has dropped out. The

most valuable brands are global and, if anything, the internet will only

accentuate that. To have a billion-dollar brand, a company has to be

global.





The top 75 brands are listed in full on www.marketing.haynet.com



WORLD’S LEADING BRANDS


Rank  Brand                Brand value     Brand value     % change

                                  2000            1999

                           (dollars m)     (dollars m)

1     Coca-Cola                 72,537          83,845         -13%

2     Microsoft-Windows         70,197          56,654          24%

3     IBM                       53,184          43,781          21%

4     Intel                     39,049          30,021          30%

5     Nokia                     38,528          20,694          86%

6     General Electric          38,128          33,502          14%

7     Ford                      36,368          33,197          10%

8     Disney                    33,553          32,275           4%

9     McDonald’s                27,859          26,231           6%

10    AT&T                      25,548          24,181           6%

11    Marlboro                  22,111          21,048           5%

12    Mercedes-Benz             21,105          17,781          19%

13    Hewlett-Packard           20,572          17,132          20%

14    Cisco Systems             20,068             N/A          N/A

15    Toyota                    18,824          12,310          53%

16    Citibank                  18,810           N/A**          N/A

17    Gillette                  17,359          15,894           9%

18    Sony                      16,410          14,231          15%

19    American Express          16,122          12,550          28%

20    Honda                     15,245          11,101          37%

21    Compaq                    14,602             N/A          N/A

22    Nescafe                   13,681           N/A**          N/A

23    BMW                       12,969          11,281          15%

24    Kodak                     11,822          14,830         -20%

25    Heinz                     11,742          11,806          -1%

26    Budweiser                 10,685           8,510          26%

27    Xerox                      9,700          11,225         -14%

28    Dell                       9,476           9,043           5%

29    Gap                        9,316           7,909          18%

30    Nike                       8,015           8,155          -2%

31    Volkswagen                 7,834           6,603          19%

32    Ericsson                   7,805          14,766         -47%

33    Kellogg                    7,357           7,052           4%

34    Louis Vuitton              6,887           4,076          69%

35    Pepsi-Cola                 6,637           5,932          12%

36    Apple                      6,594           4,283          54%

37    MTV                        6,411             N/A          N/A

38    Yahoo!                     6,300           1,761         258%

39    SAP                        6,136             N/A          N/A

40    IKEA                       6,032           N/A**          N/A

41    Duracell                   5,885             N/A          N/A

42    Philips                    5,482             N/A          N/A

43    Samsung                    5,223             N/A          N/A

44    Gucci                      5,150             N/A          N/A

45    Kleenex                    5,144           4,602          12%

46    Reuters                    4,877             N/A          N/A

47    AOL                        4,532           4,329           5%

48    Amazon                     4,529           1,361         233%

49    Motorola                   4,446           3,643          22%

50    Colgate                    4,418           3,568          24%

51    Wrigley’s                  4,324           4,404          -2%

52    Chanel                     4,142           3,143          32%

53    Adidas                     3,791           3,596           5%

54    Panasonic                  3,734             N/A          N/A

55    Rolex                      3,561           2,423          47%

56    Hertz                      3,438           3,527          -3%

57    Bacardi                    3,187           2,895          10%

58    BP                         3,067           2,985           3%

59    Moet & Chandon             2,799           2,804           0%

60    Shell                      2,786           2,681           4%


Rank  Brand                     Market   Brand value as    Branded sales

                       capitalisation*     % market cap      Actual 1999

                           (dollars m)           (2000)      (dollars m)

1     Coca-Cola                142,163              51%           17,825

2     Microsoft-Windows        420,992              17%           19,747

3     IBM                      194,236              27%           87,548

4     Intel                    447,719               9%           29,389

5     Nokia                    239,828              16%           19,910

6     General Electric         524,351               7%          105,840

7     Ford                      48,781              75%          121,603

8     Disney                    80,645              42%           18,722

9     McDonald’s                44,012              63%           13,259

10    AT&T                     118,671              22%           62,391

11    Marlboro                  60,740              36%           10,362

12    Mercedes-Benz             53,399              40%           65,249

13    Hewlett-Packard          124,875              16%           42,370

14    Cisco Systems            446,454               4%           12,095

15    Toyota                   171,166              11%          100,704

16    Citibank                 203,325               9%           29,242

17    Gillette                  36,471              48%            4,229

18    Sony                      85,349              19%           53,312

19    American Express          69,240              23%           21,278

20    Honda                     33,247              46%           60,902

21    Compaq                    43,405              34%           38,525

22    Nescafe                      N/A              N/A            4,073

23    BMW                       20,307              64%           25,270

24    Kodak                     18,432              64%           14,089

25    Heinz                     15,410              76%            7,440

26    Budweiser                 33,741              32%            6,797

27    Xerox                     13,825              70%           19,228

28    Dell                     127,576               7%           18,243

29    Gap                       26,565              35%            6,575

30    Nike                      11,212              71%            8,331

31    Volkswagen                11,930              66%           33,307

32    Ericsson                 165,767               5%           25,310

33    Kellogg                   12,066              61%            6,984

34    Louis Vuitton             40,558              17%            2,296

35    Pepsi-Cola                64,035              10%            2,757

36    Apple                     17,047              39%            6,134

37    MTV                          N/A              N/A            2,250

38    Yahoo!                    67,297               9%              544

39    SAP                       51,814              12%            5,146

40    IKEA                         N/A              N/A            8,000

41    Duracell                     N/A              N/A            2,726

42    Philips                   64,250               9%           31,679

43    Samsung                   40,821              13%           21,524

44    Gucci                      9,636              53%            1,223

45    Kleenex                      N/A              N/A            2,606

46    Reuters                   24,330              20%            4,185

47    AOL                      121,044               4%            4,321

48    Amazon                    12,774              35%            1,640

49    Motorola                  62,550               7%           30,931

50    Colgate                   34,527              13%            2,334

51    Wrigley’s                  7,349              59%            2,062

52    Chanel                       N/A              N/A            2,226

53    Adidas                     2,513             151%            4,497

54    Panasonic                 55,774               7%           60,314

55    Rolex                        N/A              N/A            1,451

56    Hertz                      3,138             110%            4,716

57    Bacardi                      N/A              N/A            1,937

58    BP                       216,745               1%           56,464

59    Moet & Chandon               N/A              N/A            1,303

60    Shell                    133,815               2%          105,366


Rank  Brand                    Country         Industry

1     Coca-Cola                US              Food

2     Microsoft-Windows        US              Software

3     IBM                      US              Technology

4     Intel                    US              Technology

5     Nokia                    Finland         Technology

6     General Electric         US              Electronics

7     Ford                     US              Automobiles

8     Disney                   US              Media

9     McDonald’s               US              Food

10    AT&T                     US              Technology

11    Marlboro                 US              Tobacco

12    Mercedes-Benz            Germany         Automobiles

13    Hewlett-Packard          US              Technology

14    Cisco Systems            US              Technology

15    Toyota                   Japan           Automobiles

16    Citibank                 US              Financial services

17    Gillette                 US              Household

18    Sony                     Japan           Electronics

19    American Express         US              Financial services

20    Honda                    Japan           Automobiles

21    Compaq                   US              Technology

22    Nescafe                  Switzerland     Food

23    BMW                      Germany         Automobiles

24    Kodak                    US              Household

25    Heinz                    US              Food

26    Budweiser                US              Food

27    Xerox                    US              Electronics

28    Dell                     US              Technology

29    Gap                      US              Fashion

30    Nike                     US              Fashion

31    Volkswagen               Germany         Automobiles

32    Ericsson                 Sweden          Technology

33    Kellogg                  US              Food

34    Louis Vuitton            France          Fashion

35    Pepsi-Cola               US              Food

36    Apple                    US              Technology

37    MTV                      US              Media

38    Yahoo!                   US              Internet

39    SAP                      Germany         Software

40    IKEA                     Sweden          Household

41    Duracell                 US              Household

42    Philips                  Netherlands     Electronics

43    Samsung                  South Korea     Electronics

44    Gucci                    Italy           Luxury goods

45    Kleenex                  US              Household

46    Reuters                  UK              Media

47    AOL                      US              Internet

48    Amazon                   US              Internet

49    Motorola                 US              Technology

50    Colgate                  US              Household

51    Wrigley’s                US              Food

52    Chanel                   France          Fashion

53    Adidas                   Germany         Fashion

54    Panasonic                Japan           Electronics

55    Rolex                    Switzerland     Fashion

56    Hertz                    US              Travel

57    Bacardi                  Cuba            Food

58    BP                       UK              Oil

59    Moet & Chandon           France          Food

60    Shell                    UK              Oil

Source: Interbrand/Citibank

* Market capitalisation calculated to June 30, 2000

** Not comparable with 1999 valuation due to improved data availability




WORLD’S LEADING PORTFOLIO BRANDS


Rank  Portfolio Brand       Brand Value    Brand Value    % change

                                   2000           1999

                            (dollars m)    (dollars m)

1     P&G                        48,352         49,193         -2%

2     Nestle                     40,250         38,769          4%

3     Unilever                   37,100         33,929          9%

4     Diageo                     14,557         13,704          6%

5     Colgate-Palmolive          13,636         11,333         20%


Rank Portfolio Brand        Market Brand value as   Portf sales  Country

                  Capitalisation *   % of mkt cap   Actual 1999

                       (dollars m)         (2000)   (dollars m)

1    P&G                    48,352      &n

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