The Financial Times yesterday identified the world’s top brands, some of which are worth more than $50bn. What gives some brands such extraordinary value?
To anti-capitalists, who view brands with the same enthusiasm as cattle faced with glowing irons, brands are pure corporate mind control. Certainly, some lifestyle products are inseparable from their logos, whether the personal achievement chic of the Nike swoosh to the look-at-me affluence of Louis Vuitton. Even though individual brands come and go, such labels are more valuable than ever because the consumers of the world have more money to spend on them.
Yet the more common and more important brands do a simpler job: they assure customers that the product works. Brands tell us that Toyota cars don’t break down, Nestle foods aren’t poisonous, and Durex condoms won’t split. Lifestyle doesn’t come into it; these brands are essentially about trust. Consumers cannot know whether the product performs as advertised until they try it. By then it is too late, and the price of failure too high to be risked.
These “trust” brands – the top ones include General Electric, Microsoft, and Wal-Mart – dominate the list of top global brands. They depend on the quality of the product, and lose their value if customers decide that the products do not live up to the brand’s promise.
That should settle a few nerves. Anti-corporate protesters should take notice that consumers are free to make up their own minds about whether a product is worth all the hype or not. Meanwhile, the managers of General Electric know that while they could be knocked off their perches by superior products, a competitor armed with nothing but a clever marketing campaign will not trouble them.
What of the future of brands? That is not clear. The Louis Vuittons seem likely to go from strength to strength, but the Coca-Cola brand has always been a mystery. It is hard to say what value is being added by the top brand, Google. Google may have become a verb, but does the brand add to the bottom line?
Google’s cool was never why searchers went to Google.com. They went – and they still go – because they get an excellent search engine. Google’s brand will not protect them if that changes.
Whichever brands prosper in future, some industries desperately lack a trusted brand – often those where the temptation to pull a fast one is just too great. We eagerly await the day that our list of top brands contains an estate agent.
