A Blog by Jonathan Low

 

Sep 30, 2013

Apple Surpasses Coca-Cola for the First Time as the World's Most Valuable Brand


For the first time since the index measuring global brand value was released 13 years ago, Coca Cola has lost its top ranking.

The brand that surpassed it, not surprisingly, is Apple. The question is what this means.

Six of the top eight brands belong to technology companies, illustrating the degree to which technology has come to dominate contemporary life. That Coca-Cola and McDonalds claimed the other two slots speaks to the power of their marketing efforts - as well as the importance of inexpensive if not exactly healthy food choices in global consciousness and diets.

The fact that Coca Cola finally surrendered its perch was, perhaps, inevitable. Records are made to be broken and there will probably be many who will be surprised to learn that this had not happened years ago. After all, Apple reigned as the world's most valuable company, ahead of Exxon, just a few years ago. So why would the most valuable business not have the most valuable brand?

First, what does value even mean in this context? No one is likely to attempt to buy Apple anytime soon, although it should be noted that Microsoft was once considered similarly unassailable and talk of its break up or sale is now rampant. So, the issue must become one of impact: to what degree are these brands likely to drive consumers to buy their products and, especially in the case of the technology companies, to pay a premium in order to do so. All of the companies in question assume pride of place for customers and investors, the stakeholders with the most power to influence financial performance. But beyond that, what does a business do with this information?

There have been questioned raised for years about the methodology employed by Interbrand, the company that does these calculations. The issues are arcane, rooted in statistics and mathematical modeling, and do challenge the ostensible precision with which the data are presented. What is value, whose point of view does it represent and how long does it last? All are legitimate concerns. But they may, ultimately, be beside the point. The ranking is as symbolic as the brand itself. Impressions and trends come and go. Coke and GE and Mickey D's have been around for decades. In the case of the two former businesses, for over a century. So the importance of this ranking is less in the quantification than it what it tells us about the nature of our economy, what matters to us and what we are willing to do about it. And there is certainly value in knowing that. JL

Adam Withnall reports in The Independent:

Apple has been crowned the world’s most valuable brand, knocking Coca-Cola off the top spot for the first time since the influential annual measure was created 13 years ago.

The highly-regarded Best Global Brand 2013 charts, released today by the image consultancy firm Interbrand, saw the long-term reigning champion soft drinks company actually slipping down to third, with a huge surge in value seeing Google take second place.
Apple’s brand value was estimated at $98.3 billion, up 28 per cent from the same report last year. Coca-Cola received just a 2 per cent increase, up to $79.2 billion.
 “Every so often, a company changes our lives, not just with its products, but also with its ethos,” the report reads.
“This is why, following Coca-Cola’s 13-year run at the top of Best Global Brands, Interbrand has a new #1—Apple. Few brands have enabled so many people to do so much so easily, which is why Apple has legions of adoring fans, as evidenced by the record-breaking launch of the iPhone 5c/5s.”
Interbrand said its methodology for working out value “brings together market, brand, competitor, and financial data” to allow companies to “articulate the contribution of your brand to business results”.
Referring to Coca-Cola’s deposition, the report said: “Though the soft drink giant slips to #3 this year, Coca-Cola has enjoyed a long and illustrious reign for good reason. An enduring classic that has evolved over its 127 years, Coca-Cola remains the most recognizable—and one of the most valuable—brands in the world.”
In a strong year for technology and web-based brands, the other really big risers were Facebook, into 52nd place with its value up 43 per cent to $7.7 billion, and Amazon, into the top 20 with a 27 per cent improvement in value to $23.6 billion.
While Interbrand’s global chief executive Jez Frampton said in a recent interview that it was “a matter of time” before Apple claimed the top spot, Patrick Barwise, Professor of Marketing at London Business School, was more cautious about its lasting prospects.
He told The Times: “We’re more and more moving to the weightless economy where service is very important and where a lot of buying is done for reputational reasons.
“Coca-Cola is a very mature, steady brand with a global presence, so the valuation for Coke will be pretty steady. With technology brands you see more volatility. Twenty years ago people were singing Motorola’s praises.
“Technology brands certainly influence buyer behaviour. They also tend to be very volatile. The table tells you that the most successful technology companies are very profitable and successful. It may also tell you there’s a bubble.”

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