When discussing this topic in the office it created quite lively discussion, with the old guard jumping in and declaring Coca Cola in the top spot and of course Apple, Google, Microsoft and Facebook as runners up (in no particular order).

Everyone seemed to remember that one of the most often used words globally, in any language, was “Coke” and quoted a range of anecdotal evidence to support their assumptions. After all, you could simply see a silhouette of the famous bottle and immediately recognise the product and it’s heritage rich brand.” It must be Coca Cola – everybody drinks it!” and “Let’s retire to the pub – job done” was the ensuing conclusion.

Locking the doors to prevent the office emptying allowed a more scientific conversation to take place with the latest facts being tabled to confirm Apple in the number one spot yet again. With an average value in excess of $125 billion confirmed by the major brand valuation gurus of the world (Interbrand, Branding Institue AG et al) this half eaten fruit stands head and shoulders above the rest with it’s global competitor, Samsung, way back in second place at a mere $80 billion or so.

Indeed, with 8 out of the top ten position occupied by IT/ mobile players we drop to 11th spot before we find Coca Cola valued at a paltry $36 billion (and 60th slot sadly for our home grown communications giant BT – $16 billion according to The Branding Institute).

With a real estate valuation of almost twice that of the all conquering Google and Microsoft, Steve Jobs and his successors do seem to have done rather well from their early days of home made tech and dialler gadgetry.

So how do the magic bean counters arrive at these numbers? Well, you may be surprised to learn that there is actually an international standard for this black art – ISO10668 – which sets out the compliance rules for monetary brand valuation. At it’s heart are three critical questions which are crunched and validated to arrive at the final number.

  • What is the ROI based on operating profit after taxes minus the charge for capital?
  • How much does the brand alone drive a consumer purchasing decision?
  • How much ongoing and sustained loyalty does the brand deliver?

This is very much the simplified explanation. After all, there is the RBI to consider – Role of Brand Index – a percentage figure which is based on primary research and historical review (Datamonitor) and of course an expert panel review with long sentences and interesting graphs to justify further consultancy projects within the target client!!!!

No seriously, these valuations can effect investor decisions,stock market prices, lending and capitalisation decisions and even merger and acquisition strategies and are seen as one of the cornerstones of principles and practice within all of the world’s top 500 brands. Equally, the thinking behind them can inform forward strategies and tactics as companies seek to maintain competitive edge in a most dynamic world.

Away from the top 500 brands, I wonder if we could build a similar model for our client brands???

Watch this space.

ps – Facebook is in 30th place at $24 billion



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