How Important is Your Brand? That Depends

(MoneyWatch)  Interbrand just released its annual list of the world's top brands. What, if anything, does that mean and should you care? Well, that depends. Consumers just look at the list and say, "Hey, Coke's still number one; that's nice," or "Look at Google climb the chart!"

But if you work for Pepsi, Ford, or IKEA, you might have a completely different take on it, especially if you analyze multiyear and competitive trends. You see, there actually is a way to determine the relative value of a consumer brand in buying decisions. Intebrand's Brand Value metric is based on three factors:

• Branded product profitability
• Brand influence on customer demand at point of purchase
• Brand loyalty - ability to secure ongoing or future customer demand

Keep in mind, this is not simply a function of marketing, advertising, PR, logos, names, or anything of the sort. It's a measure of how the branded products are doing and will continue to do in the marketplace.

For example, nobody would argue that the ascension of Apple's brand in recent years is for any other reason than that the company makes breakthrough products. That said, nobody's going to tell me that Coke's an intrinsically better product or tastes better to more people than Pepsi. Does Colgate really make better toothpaste than Crest? You can ask the same question of Nike and Adidas, UPS and FedEx, the list goes on and on.
So what differentiates some brands from others? Why do customers prefer one over another? Buying decisions are a composite of a number of factors including product design, features, quality, and performance; customer service; the buying experience; grass roots perception; and yes, advertising.

Big Changes in 2009
What can we glean from this year's report? Well, I like to look back a few years and compare. That way, the trends are unmistakable.

For example, back in 2001, Ford's rank was 8, Toyota's was 14, VW's was 35, and Hyundai hadn't even cracked the top 100 yet. Today, Toyota ranks number 8 (actually slipped from the number 6 position in 2008), Ford and VW have slid to 49 and 55, respectively, and Hyundai is number 69.

Should VW and Ford be worried? Absolutely. Wouldn't you be?

Apple - ranked number 49 in 2001 - is now the world's 20th most valuable brand. Sony Ericsson, on the other hand, dropped completely off the list from the 36 position in 2001.

Pepsi and IKEA have both been on a tear, climbing from 44 and 46 to 23 and 28, respectively.

In the pharmaceutical world, Merck and Pfizer, numbers 28 and 30 in 2001, didn't even crack this year's top 100.

And, as a sign of the economic times, Citi slipped from 19 to 36 in just one year.

Of course you'll want to know this year's top ten:

1. Coca-Cola
2. IBM
3. Microsoft
4. GE
5. Nokia
6. McDonald's
7. Google
8. Toyota
9. Intel
10. Disney

This link will take you to Interbrand's website, where there's quite a bit of commentary and, of course, archives from previous years. So knock yourself out.

Also, check out: What You Need to Know About Branding