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July 30, 2006

The BusinessWeek/Interbrand Annual Ranking of the 2006 Best Global Brands

Turnaround Performances from Nokia and Motorola.

Global Brands

(New York) July 28, 2006 – Leading global brand consultancy, Interbrand, has again teamed up with BusinessWeek to publish their annual ranking of the Best Global Brands by brand value. Now in its sixth year, the Best Global Brands report identifies the top 100 global brands that have managed to create and sustain strong performance in today’s competitive market.

“In the majority of cases, those who made the ranking are proactively managing their businesses through a brand lens. They have recognized that their brand should be the central organizing principle given the incredible value they represent,” said Jez Frampton, CEO of Interbrand. “The need to measure and manage brand performance continues to be a critical priority for senior management as evidenced by the incredible interest shown in this ranking.”

Brand values were determined using the method Interbrand pioneered nearly 20 years ago and has since used to value more than 4,000 brands. Brand value is calculated as the net present value of the earnings the brand is expected to generate and secure in the future for the time frame from July 1, 2005 to June 30, 2006. To be considered the brands must have a minimum brand value of US$2.7 billion, achieve about one third of their earnings outside of their home country, have publicly available marketing and financial data, and have a wider public profile beyond their direct customer base.

The ranking has produced many insights this year, chief among them, the turnaround performance of certain brands and some dramatic declines. “The results from this year’s ranking clearly demonstrate if brand owners do no positively and proactively manage their brand, the market will do it for them, leaving them in a vulnerable situation”, said Jeff Swystun, “Those who have turned around their performance or generally climbed in the ranking have employed specific strategies to leverage and grow the value of their brands.”

2006 Best Global Brands Highlights

Turnaround Performances

After year over year decline from 2000 to 2004, Nokia (#6) has regained its leadership position in the mobile telecom industry with growth in both the high and low ends of the market. Nokia’s scale has always made it competitive in the rapidly growing low priced segment, but a resurgence in design and a concentration on desirable features has meant that Nokia is now able to maintain its average selling price and reinvigorate its brand image with the high end consumer.

Likewise, Motorola (#69) has historically struggled in the high end of the market...until the Razr. A hero product, it has in recent years helped the brand maintain its solid number two position in the category.

Top Gainers
The top gainer with a brand value increase of 46%, Google (#24) creates growth under with the strategy of “do no evil” positioning itself at the opposite end of the spectrum from the more corporate Microsoft. Overall growth of Internet commerce has perpetuated consumers’ acceptance of purchasing goods and services online enabling eBay (#47) to skyrocket in value up 18% and the third highest gainer this year.

In the second spot with a value increase of 20%, Starbucks (#91) has found financial success by leveraging the brand with a premium fast food and extending its product offering into music and publishing.

Top Decliners
The growth of mass retailers has taken market share from traditional apparel brands such as Gap (#52). Losing the most brand value with a decline of -22%, Gap has been unable to clarify its brand image and with a less distinct positioning the brand has been less effective at selling clothing causing reduced long-term stability.

Ford (#30) continues to lose money on every car sold – and brand value year after year. Down -16% this year, Ford’s American heritage is an insufficient brand attribute to hold off growing competition from Japanese and German automakers.

Down -12% this year, Kodak (#70) has made valiant strides to catch up with the digital world, however the reality is that competition is fierce and profitability is thin compared to Kodak’s film business and thus the brand’s value continues to decline.

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Edited & Posted by the Editor | 8:25 PM | Link to this Post

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