Atlanta-based Coca-Cola Inc., the world's largest beverage maker, has been rated as the most valuable brand in the world, according to the latest The 100 Best Global Brands list jointly compiled and released by Interbrand consultants and BusinessWeek.
Despite losing 3 percent of its brand value through a fall in brand value to $65.32 billion from $67 billion in 2006, the cola giant has managed to retain its top position for the seventh year in a row, the report said.
Like other soft drinks and fast food companies, Coca-Cola has struggled to maintain its brand equity in the face of a growing backlash against supposedly unhealthy consumption. Moreover, its move into healthier drinks has yet to resonate.
Internet search giant Google emerged as the biggest gainer despite its 20th rank with a 44 percent rise of over $5 billion in brand value to $17.8 billion.
Google's focused brand and meteoric rise contrasts with 55th ranked Yahoo!, which, the report said, was born with similar potential but lacks (or perhaps lost) this singular, unifying purpose.
Its pursuit of co-branded partnerships may have seemed attractive in purely financial terms, but this detracted from the company's sense of self, causing the brand to fade, the Interbrand study added.
Yahoo!'s brand value stayed flat at $6.07 billion.
Both Google and Yahoo! started off in a similar position but Google has built a business that is growing all the time but still manages its brand in a very authentic fashion - it still feels like it's run by a couple of skateboarders even though it's much more sizable than it used to be, Graham Hales, executive director at Interbrand, said.
Other major risers include 64th ranked Zara, 44th ranked Nintendo, 88th ranked Starbucks and 33rd ranked Apple.
On Nintendo the report commented that it was a brand that seemed to be losing its appeal with consumers but the launch of the Wii console and hugely successful DS range has heralded a significant bounce-back in consumer interest.
The Interbrand report, conducted in conjunction with BusinessWeek, described Apple as the supreme master of demand creation.
Consumers are now happy to own multiple iPods that are styled for particular functions: home, video or exercising. And in a world filled with technology, the expectation created around the launch of the iPhone demonstrates the supreme desirability this brand has created, it said.
It was unthinkable some years ago that Apple could make a phone. Consumers wouldn't have given the brand permission to do so. But now Apple can transcend the 'old thinking' of limited boundaries. In this sense the brand has become its passport, to roam wherever its proposition can be applied.
The biggest losers were Ford which fell from 30th to 41st, GAP from 52nd to 61st, Kodak from 70th to 82nd, Pizza Hut from 66th to 74th and Motorola from 69th to 77th.
The Ford brand continues its long-term decline demonstrating how an iconic brand can lose its way, the report said. Ford, unlike the competition, has not invested in distinguishing itself in any meaningful way.
GAP is described by the report as trapped between several trends in the fashion market.
Kodak has been too late to read the signals of the marketplace and is a brand that still feels rooted in traditional film, while its strategy of moving into digital imaging suffers from a lack of any real point of difference, the report noted.
Motorola, despite the global success of the Razr handset, has enjoyed success with one-off products, but failed to capitalize on it as well as invest in a strong corporate brand. The mobile phone producer could, said the report, take some lessons from Nokia.
Coca-Cola is followed by Microsoft, IBM, GE, Nokia, Intel, Toyota, McDonald's, Disney and Mercedes-Benz in the top ten.
Except for Nokia of Finland, Toyota of Japan and Mercedes-Benz of Germany, the rest are U.S.-based companies.
The U.S. is the biggest home to the top brands with as many as 52 coming from the country. Germany has grabbed the second position with just 10 brands, followed by nine from France, eight from Japan and six from the United Kingdom.
There are only four Swiss brands on the list, three from South Korea, two from Italy and one each from Sweden, Spain, Finland and Bermuda, the brand list by Interbrand revealed.
The top four brands each have a brand value of more than $50 billion while even the last ten have been given a value of more than $3 billion.
Interestingly, despite having very limited opportunity to build its brand via advertising anymore, Marlboro still ranks as the 14th most valuable global brand at $21.2 billion.
McDonald's, which has suffered from similar problems recent years, came back strongly in this year's study. Its brand value rose by 7 percent to $29.4 billion, helped by innovations such as an updated menu and the publication of nutritional information.
HSBC, in twenty-third place, was the only British company in the top 50 and only five other UK companies made it into the top 100, which was once again dominated by American corporations.
US motoring giant Ford was this year's laggard, with its value dropping by 19 percent to $8.98 billion, putting it at No.41 in the league, as its ongoing focus on the North American SUV market demonstrated that it is increasingly out of touch with consumer behavior, according to Hales.
The report stated that Ford's long-term decline demonstrates how an iconic brand can lose its way.
The report has cited the carmaker's permanent discount policy in the U.S. as a factor that has eroded the value of its brand.
This was in marked contrast to Toyota, which, in sixth place, has among the most highly visible, seemingly committed approach to environmental issues.
Toyota has made the brave decision to invest in the Prius after looking at the impact of environmentalism on consumers, Hales said.
According to Greg Silverman, senior vice president of Analytics at Interbrand, the degree of impact on brand value depends on the company's industry. Because the fundamental connection between brand and value is the securitization of future earnings, in some categories green is much more important to stickiness of brand and in other categories it's less important, he said.
According to Silverman, it also depends on the substance of the program. Any strategy poorly executed is going to be a poorly executed strategy. It's the efficacy of the program that matters the most. Green can be good if it's good green, he added.
In reviewing the list of 100 Best Global Brands, GreenOrder, a strategy and marketing firm focused on helping companies maximize the value of sustainability, rated Toyota the most successful at using green initiatives to enhance brand value. Citing Toyota for the highest industry relevance - specifically, for leveraging green initiatives to successfully market hybrids - among the 100 brands on the list, GreenOrder also gave it high marks for messaging effectiveness, differentiation, and credibility.
According to GreenOrder, though direct competitor Honda is considered by many environmentalists to be the greenest car company - both in internal operations and product - yet, the value to the brand is in part tied to commercial recognition by the consumer and hence Toyota ranks higher.
According to Founder and CEO of GreenOrder, Andrew Shapiro, Toyota has taken strains to create the most effective impact on brand value. For instance, because of the prominence of its messaging, consumers are more likely to know about Toyota's achievements. It goes to the efficacy of the strategy that they've chosen. It's one of the things that they are emphasizing in their communications: style, value, environmental achievements, et cetera, he said.
But Shapiro warned that not every carmaker could emulate Toyota's success in brand positioning. Lots of companies are trying to get on the green band wagon because they perceive it to be a hot issue, and they are putting forward messaging campaigns that amount to little more than 'we care about the environment too,' he said. I don't think those empty statements are going to carry weight with consumers; [consumers] are becoming more educated and savvy about corporate environmental [practices]. They know when a company is making a broad claim that doesn't have much weight behind it.
Mary Nickerson, national marketing manager for Advance Technology Vehicles - including Toyota's Prius - agrees. According to her, Toyota's green programs are not the result of 21st century trends, but rather reflect a long standing culture at Toyota that began in the 1960s to provide modes of transportation that have the least impact on the environment. Green has long been in Toyota's DNA, Nickerson said. We're that way as a culture. It's not an initiative for this year, an initiative for next year....
Interbrand also commended Nokia Corp., which ranked fifth this year, staging a comeback by realizing the need for cheaper handsets for developing countries and responding to the need. Even as it releases high-end phones aimed at both the consumer and business user, Nokia is showing strength in emerging and mature markets alike, the study said.
According to the study, the top 100 brands in the world have a combined value of $1.15 trillion - more than the combined market value of over 4,000 listed companies in India.
Interestingly, none of the brands in the list are Indian, though several of the them are household names in the world's second largest consumer market.
According to industry watchers, though Indian companies are able to generate value outside their home territories, yet, they have failed to invest much in the area of branding their products, resulting in their failure to feature in the global rating.
The study describes brand value as the dollar value of a brand calculated as net present value or today's value of the earnings the brand is expected to generate in the future.
The brands are valued using sales and a consideration of how important the brand is in the sector - the same way any other corporate asset is valued on the basis of how much it is likely to earn for the company in the future.
According to Interbrand, it uses a combination of analysts' projections, company financial documents, and its own qualitative and quantitative analysis to arrive at a net present value of those earnings.
Interbrand takes many ingredients into account when ranking the value of the Best Global Brands. Even to qualify for the list, each brand must derive at least a third of its earnings outside its home country, be recognizable outside of its base of customers, and have publicly available marketing and financial data, the brand consultancy company said in a press release.
For more information, visit http://www.interbrand.com/best_brands_2007.asp.