Interbrand and BusinessWeek recently published the Top 100 GLOBAL Brands – A list of the Best Brands in the world, in accordance with the value they promised in the markets.
The Title is promising – “Here’s how we Calculate the power in a name“
Though originally I had heard of the Michael Berkin’s Model of evaluating the Brand Value – which Currently Infosys and Coca-Cola are using, a similar method is used by Interbrand also.
The method, in short, calculates the profits of the company due to the “brand” – reduces the investment made on the promotions of the brand – and then, after reducing the taxes, dicscounts the value to present day earnings (NPV)
Then, there is a multiple added – A modification factor – Brand Strength Multiple – to this value to finally come out with the Brand Value.
A similar method is used by Interbrand also. Just that the documentation has been done differently. The procedure mentions that the value is calculated “on the basis of how much they’re likely to earn in the future. Then the projected profits are discounted to a present value, based on the likelihood that those earnings will actually materialize”
A major difference is that there are certain “Eligibility criteria” that Interbrand had laid out, which entailed disqualification of some of the favorites (including my favorite!)
To qualify for the Evaluation, each brand
– must have a value greater than $1 Billion,
– get atleast a third of its earnings from Exports, and
– have publicly available Marketing and Financial Data
This left out Visa, Wal-mart, CNN, etc from the hit-list!
Also, parent companies and Airlines weren’t included, because of reasons you would find on their Report.
Here is the complete list of the Rankings
The Top 5 last year Remain the Top 5 this year-
– Coca-Cola (1)
– Microsoft (2)
– IBM (3)
– GE (4)
– Intel (5)
Nokia (8) lost the market to Samsung, and thus, the Ranking to Disney (6) and Mc Donald’s (7)! Yet, it remains one of the only 2 non-US companies featuring in the Top 10 !
Toyota (9), the other non-US company, did some aggresive Innovation and Expansion processes to rise 2 positions to Number 9 this year.
And finally, at number 10 comes the Smoking Zone – the Leader in Cigarettes – Marlboro (10), which pitched for higher Sales, inspite of rising Tax structure!
Incidentally, not even a single Indian Brand features in the Top 100… which is not much of a surprise though! Hmm… Are Indian Brand Managers listening?