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What's
In a Name?
By Michael Alan Hamlin
August 5, 2002
What's a name worth? According to
Interbrand's latest global brand ranking, a good name is worth up
to US$68.95 billion. At least that's what Coca-Cola's brand is worth
according to the world's dominant brand research group. Microsoft
comes in a close second, at US$65.07 billion. The top 10 places
are dominated by US firms, with the exception of Nokia, which ranks
number five at US$35.04 billion.
The most valuable Asian brand is
that of Toyota, estimated at US$18.58, which makes it the 14th most
valuable brand in the world. Sony comes in at number 20, followed
by Honda at 21. The only other country with a brand in the top 100
is South Korea, whose Samsung ranks a very respectable 42, with
a value pegged at US$6.37 billion, and growing. The value of the
Samsung brand grew 22 percent in the period covered by the latest
Interbrand ranking.
Interbrand is a New York consultancy
that evaluates just how much brands contribute to increasing sales
and earnings, the theory being that well-known brands protect products
and services from price competition, at least to some degree. The
value Interbrand attributes to a brand name reflects its ability
to do these things. Its annual ranking, published in cooperation
with BusinessWeek, has become a closely watched barometer of a company's
well-being. That's become especially true in recent years as the
value of what's called intangible assets - such things as innovation,
hiring and keeping smart people, and of course brand equity - and
their contribution to competitiveness has become widely accepted.
The past decade has seen an increasing
acceptance of the important role of strong brands in Asia, too.
But because most Asian markets have been protected from global competitors,
there has been relatively little effort made by Asian companies
to grow strong brand names for their products and services. Liberalization
leading to increased competition has lately caused much more attention
to be focused on brand building as companies seek to distinguish
themselves from their competitors. Globalization has also contributed
to the urgency with which Asian companies address the issue of building
strong corporate brands, forcing Asian executives to benchmark constantly
increasing global standards of quality, productivity, and efficiency.
Two other drivers of strong corporate
brand development in Asia are the Asian financial crisis and technology.
For many, the financial crisis may seem like ancient history, but
the pressure on Asian companies to increase transparency and return
on investment that came about as a result of the crisis continues
to grow. In fact, that pressure has been made even more intense
as result of the recent corporate accounting debacles in the United
States. If companies there are going to be under much more intense
scrutiny by investors and regulators, then it follows that so too
will Asian companies, at least by investors and increasing by regulators
as well.
Technology is an issue, especially
in Asia's more developed markets, because it empowers consumers.
Specifically, the Internet provides consumers the ability to almost
instantly evaluate competing products and services on the basis
of price and product and service attributes. All things being equal
between competing products and services, it is likely to be the
product or service backed by the best corporate brand that will
get the business.
Rankings by a number of regional
and international publications of Asian businesses have also helped
focus attention on the value of strong corporate brands. Among these
are the Far Eastern Economic Review's Review 200. The Review 200
ranks "Asia's Leading Companies" on the basis of a survey
administered by ACNielsen. The criteria include leadership, quality
of products and services, innovation, financial status, and "status
as a company others try to emulate." These criteria are components
of a strong corporate brand from the perspective of the Review.
The rankings include global brands
overall in Asia, and Asian brands in 11 Asian countries. The global
brand rankings closely mirror those of Interbrand. Not surprisingly,
the country rankings show that the companies that have worked hardest
to develop strong corporate brands - and not just big companies
in general - dominate.
What all this means, of course, is
that there is significant pressure on companies to do more than
simply advertise their products and services. They must also develop
strategic marketing programs designed to build strong corporate
brands. And one of the key features of effective strategic marketing
initiatives is that often non-traditional communication channels
are the most effective in terms of investment and impact. By non-traditional,
I mean such communication channels as events, direct marketing,
and public relations.
Whatever channels your firm chooses,
if you're not seriously focused on corporate brand building - regardless
of the nature of your business - you have at least one competitor
that is leaving you behind. There are lots of reasons to put off
building a strong corporate brand. But none of them are good. There's
just one good reason to invest in brand building: strong corporate
brands are a fixture not just of industry leaders, but of all enduring
firms.
Now, I need to make a quick correction.
My July 22 column attributed certain positive remarks about the
Philippines to Robin Martin, the Intel general manager in the Philippines.
Turns out, he didn't make these remarks, although he believes they
might have been taken from an interview. He does say that he wishes
he did make them, because they appear to have inspired and motivated
so many Filipinos.
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001). He can be reached
at mahamlin@teamasia.com.).
Copyright © 2002 Michael Alan
Hamlin. All Rights Reserved.
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