Here’s one to make the accountants rub their hands together, and up their charges. How about including brand value in a company’s balance sheet? And before the accountants amongst our readers say “we already do” let’s point out an important point. Apparently, current accounting standards allow only for the recognition of acquired brands, not internally developed brands.
Coca Cola’s brand is worth a staggering $67 billion, and is still the world’s leading brand, ahead of Microsoft and IBM, says Interbrand.
It won’t surprise you to learn that Google has seen the fastest improvement in the value of its brand over the last year, jumping to 24th place, with Starbucks (91st place) and eBay (now at 47th place) the second and third fastest risers in Interbrands top 100.
But just as impressive was the performance put in by Nokia and Toyota. Sure, neither of the companies saw their brand value increase in percentage terms to the same extent as Google, eBay or Starbucks, but then as they were already in the top ten, it was always going to be harder for them to grow so fast.
They were, however, the fastest risers in the top ten.
Of late there have been signs that Motorola is slowly chipping away at the Finnish company’s share of the mobile phone market. While that may be so, and certainly helped by its “Hello Moto” ads, the company did see a big improvement in its brand value, but then again, while Nokia occupies a lofty 6th place, Motorola is way down the pecking order at 69th.
Of all the car manufacturers, Toyota is top in 7th place, Only Mercedes in tenth, and BMW in 15th put up any serous rivalry in the brand stakes. Honda is 19th, while Ford languishes at 30th.
That’s all very well, but how do Interbrand decide these things? This is what they say: “We identify the revenues from products or services that are generated with the brand. From these branded revenues we deduct operating costs, applicable taxes and a charge for the capital employed to derive intangible earnings. Intangible earnings are the earnings that are generated by all of the business’s intangibles, including brands, patents, RD, management expertise, etc…through our proprietary analytical framework, called #147;role of brand#148;, we can calculate the percentage of intangible earnings that is entirely generated by the brand. In some businesses, e.g., fragrances or packaged goods, the role of brand is very high – as the brand is the predominant driver of the customer purchase decision. However, in other businesses (in particular B2B), the brand is only one purchase driver among many, and the role of brand is therefore lower. For example, people are buying Microsoft not only because of the brand but mostly because the company has an installed base of 80% of the market and it would be for most users extremely difficult to switch their existing files to a new software platform.”
There are, however, some noticeable absences from the Interbnand list. It only includes PLC’s, so that means no inclusion for Mars (privately owned) and no BBC. Visa and the Red Cross are also excluded.
According to Interbrand in 2006, the top ten brands, the value of their brand in $bn and percentage change on last year are as follows.
#9;Top ten brands
#9;Top three risers
#9;Top three fallers
style=“clear:both;“gt;For further information
Best Global Brands 2006 Interbrand
To subscribe: visit this link
© Investment & Business News 2013