The Best Brands in the World

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People will argue forever about whether they prefer Coke or Pepsi, but they surely won’t choose the random generic cola a little ways down the shopping aisle. Not every business is a brand, and not every brand does good business, but one lesson apparent in Millward Brown Optimor’s fifth annual BrandZ ranking of the world’s most valuable brands is that brand strength is a good indicator of financial success.

After hitting the iceberg of the banking collapse, business was bad for pretty much everyone last year — with the exception of tech companies, a category that saw net growth in brand value. But the strength of the companies in this ranking lies in something more ephemeral. While the bottom line will always be the bottom line, the customer loyalty and public presence of the world’s strongest brands make them much better placed to respond to both economic and public relations setbacks than their more low-profile competitors.

And PR problems have come hard and fast in 2010, including for some at the top of the rankings. They will hope that the strength of their brands weathers the storm, but the list may look significantly different in 12 months.

When assigning brand value, Millward Brown Optimor uses a methodology that takes into account revenue, customer relations, and growth potential. It’s not only about the number of customers (Chinese and Indian firms would definitely have an unfair advantage there) or the revenues of the biggest companies; it’s about the overall picture of how good a brand is at meeting the needs of its customers and at maintaining its public image.

Most people would have heard about most of the companies on this list, where the absences are just as notable as the inclusions. Multinational giants like Nike, Mastercard, or Starbucks are in the top 100, but far indeed from Coca-Cola and McDonald’s, both in the top 10.

We will look first at the top 10 global brands cited in the report, followed by 10 “best in class” brands to give a little taste of the best beer brand, car brand, retailer brand, etc. The numbers reflect Millard Brown Optimor’s brand valuation, and the percent change from last year’s report.

10th Most Popular Brand: Vodafone

Brand Value ($Million): 44,404

Change: -17%

British telecoms firm Vodafone, with operations and partnerships in 73 countries, is the largest such firm in the world by revenue. Despite its reduced performance in its home market (rival O2 beat out Vodafone to secure exclusivity for the iPhone in the UK), the company has pursued ventures abroad, and is a 45 percent owner of Verizon Wireless, the largest provider in the U.S. by subscribers.

Most will know the brand from its aggressive sponsorship of international sports: It is the title sponsor of a Formula One team, the Indian and Australian national cricket teams, and its history as sponsor of European soccer teams like Manchester United have all surely helped it capitalize on the loyalty that fans feel for those teams.

9th Most Popular Brand: General Electric

Brand Value ($Million): 45,054

Change: -25%

Founded in 1878, GE was one of the original companies listed on the Dow Jones Industrial Average. In 132 years it has moved from its beginnings as Thomas Edison’s electric company to a multinational behemoth with its fingers in all sorts of pies. Besides the kitchen appliances, lightbulbs, and washing machines for which it is best known, the company has interests in television (NBC Universal), aviation (jet engines), locomotives, computing – its early involvement in the computer business enabled it to register the ge.com website in 1986, before any of us knew what an Internet was.

Having dropped 25% in brand value (and one spot on the ranking) since the previous report, GE has not been immune to PR scandals. A $50 million fine from the SEC last year for (allegedly) defrauding investors surely affected its brand strength as much as it did its bottom line, but strong numbers in the first half of 2010 suggest that the GE brand will remain strong this year.

8th Most Popular Brand: China Mobile

Brand Value ($Million): 52,616

Change: -14%

Being in the biggest market in the world can’t hurt, but Chinese national telecoms provider at number eight on the list has more to thank for its high brand value. It’s the only state-owned enterprise on the list, a status that ensures substantial official protection of the company’s bottom line.

While the tax breaks and regulated competition (its two competitors are also owned by the state) are good, China Mobile also has its business strategy to thank for its success. Its network cannot support the iPhone (though this may soon change), so it focused on the rural market, offering a suite of services for rural customers like transferring money and receiving market prices for their products via their phones that have brought in more and more customers. As the largest telecoms brand in the world by subscribers, China Mobile is sure to stay high on the rankings in the future.

7th Most Popular Brand: Marlboro

Brand Value ($Million): 57,047

Change: 15%

It’s been a while since the laws changed to prevent tobacco companies from advertising pretty much anywhere, but that hasn’t prevented the iconic Marlboro brand from maintaining a strong global presence. It even rose three places in the Brandz rankings with its 15 percent increase in brand value over last year.

The 1998 settlement prevented tobacco companies from print or billboard ads in the U.S., and the European Union’s ban in 2005 of tobacco advertising in almost any medium, including sporting events like Formula One, took away a popular platform for Marlboro’s ad department. The company responded by turning its attention to direct marketing and non-traditional sponsorships. Nonetheless, it has recently come under fire for allegedly trying to circumvent restrictions by using subliminal advertising on its cars, suggesting that the company may be resorting to desperate measures to maintain their presence in a rapidly shrinking market for its main product.

6th Most Popular Brand: McDonald’s

Brand Value ($Million): 66,005

Change: -1%

The top fast food brand in the world, McDonald’s golden arches crown 31,000 restaurants in over 119 countries, offering the chain’s staple products alongside country- or region-specific specialties. Much press has recently been given to the perceived unhealthiness of fast food, but McDonald’s has proven quick to react, offering healthy alternatives for children and adults such as fruit juice, or carrots and celery in a Happy Meal instead of French fries.

While the company has experimented with other brands (it owned Boston Market until 2007, and had a significant stake in Chipotle until 2006), its focus has remained on the flagship franchise. It may take a hit in 2010 though, as McDonald’s is currently embroiled in a scandal surrounding souvenir glasses given away in children’s Happy Meals that contain cadmium, a highly toxic carcinogen.

5th Most Popular Brand: Coca-Cola

Brand Value ($Million): 67,983

Change: 1%

Since its founding in 1892, Coca-Cola has understood and exploited the power of advertising, and has used its ads to cement its place in American culture. Old display racks and posters regularly sell for hundreds of dollars at auction to a dedicated group of collectors.

With increasing attempts to impose a tax on carbonated drinks in the U.S., Coca-Cola has increased its lobbying efforts at various levels of government to prevent such measures, which have already been imposed in Washington State, Washington DC, and Colorado. Lobbying will surely continue into 2010, as First Lady Michelle Obama makes childhood obesity a priority of the administration.

4th Most Popular Brand: Microsoft

Brand Value ($Million): 76,344

Change: 0%

It was a stagnant year for Microsoft, with positives and negatives working to keep the brand value at the same level as the year before. It finally released Windows 7 late in 2009, allowing the company to sweep the poor performance of 2007’s Windows Vista under the rug, but increasing competition from Apple in the personal-computer market worked against the company. Its failure to objectively grow its brand caused the computer giant to dropped two spots on the brand ranking to number four.

In 2010, Microsoft lost its status as the most valuable technology company in the world, though it hopes its forays into cloud computing (Windows Azure), gaming (Xbox360), and mobile (Windows Phone 7) will help not only keep profits high, but strengthen the brand itself.

3rd Most Popular Brand: Apple

Brand Value ($Million): 83,153

Change: 32%

Posting a huge increase in brand value and a jump of three spots on this ranking, Apple has proven that innovative design and rigid quality control are essential to brand strength, having helped the company build a remarkably loyal customer base. In its laptops, desktops, iPod music players and iPhones, Apple has emphasized simplicity and ease of use that appeal to the technophobes of the world. By not licensing its operating system to other manufacturers, it ensures that all of its products maintain the same standards of quality and performance.

If last year’s success can be credited to the remarkable sales of the iPhone 3GS then 2010 is sure to just get better. Blistering sales of the iPhone 4 (despite widely reported antenna problems) and the company’s newest product, the iPad, have set records for the company, which looks poised to move up the ranking after another successful year.

2nd Most Popular Brand: IBM

Brand Value ($Million): 86,383

Change: 30%

Computing isn’t only in your home or on your phone, and IBM’s complete dominance in the business-to-business market has allowed the company to establish a presence all over the world in providing mainframe servers and data centers to its corporate clients.

Its new major initiative, referred to as “Smarter Planet” sees IBM marketing itself as the business solutions company of the future, with projects involving smart electricity grids, water systems, traffic management systems, even a crime prediction project being tested in the U.K. With an established presence in that market, IBM’s comparative weakness in personal computers and mobile computing may not stand in the way of continued growth for the company that went from fourth to second in the ranking.

Most Popular Brand: Google

Brand Value ($Million): 114,260

Change: 14%

Topping the list for the second year in a row is Google, the ubiquitous tech company whose slogan says, simply, “don’t be evil”. Having quickly grown beyond the niche of internet search that it started out in, Google has established itself as the leader in web advertising, online video (it owns YouTube.com), and location services, among many others. New products are constantly being added, and last year was no exception: the company launched Google Wave, a messaging and social-networking application, while acquiring new companies to develop its VoIP and mobile advertising.

2010 will see Google make its mark in the mobile communications world, having released its first branded phone, the Nexus One, in January. The phone runs Google’s Android operating system, released in late 2008, which has been a very successful platform for running mobile apps. By some accounts, phones running Android have even begun to outsell the iPhone, suggesting that Google may be able to fend off its rival for at least another year.

Most Popular Beer Brand: Bud Light

Brand Value ($Million): 8,153

Change: 22%

Beer was popular over the last year, with the category one of only four to grow in overall brand value. Economic hardship (and emotional hardship that goes with it) combined with a growing emphasis on counting calories in the U.S. to make Bud Light the leader of the six-pack. Less income meant people wanted cheap beer, and wanted to drink it at home, and brands like Bud Light extended their lines to meet the demand. Some free press from none other than President Barack Obama, who chose a Bud Light at the White House “beer summit” that reconciled Prof. Henry Louis Gates with the cop who tried to arrest him also helped put the brand in the public eye.

2010 has already seen some free press for Bud Light Lime, the competitor to Corona that the company introduced in 2008. Hard-nosed American general Stanley McChrystal was famously relieved of his duties after a profile in Rolling Stone Magazine that mentioned, among other things, the general’s preference for the beer.

Most Popular Liquor Brand: Smirnoff

Brand Value ($Million): 4,886

Change: -6%

Moving onto the harder stuff, top honors in the spirits category went to Smirnoff, the classic recipe that outperformed its more luxurious rivals in a famous taste test organized by the New York Times in 2005. It scored a double gold medal at 2009’s San Francisco Spirits Competition, proving its longevity. While the recipe hasn’t changed in over a century, the brand has added a whole line of malt beverages with lower alcohol content. One of them, Smirnoff Ice, has become the subject of a viral prank where people force their friends (or enemies) to chug one of the drinks on the spot. While the implication is that the drink is a form of punishment, Smirnoff may see that any publicity is good publicity when it comes to brand strength.

Most Popular Car Brand: BMW

Brand Value ($Million): 21,816

Change: -9%

Sales were down last year for the German carmaker BMW, though its brand value decreased less than the average for the car category, which declined overall by 15 percent. The brand’s luxury status put it in a difficult position as car buyers went increasingly for value models. It has also received some criticism for its halfhearted focus on alternative engines but with both sedan and SUV hybrids in its line, as well as a hydrogen model, it will hope to capitalize on the public’s increasing interest in green models and see a rebound in sales.

Most Popular Oil & Gas Brand: BP

Brand Value ($Million): 17,283

Change: 0%

In light of the BP oil spill that filled the Gulf of Mexico with unfiltered crude from April to July this year, it is not at all likely that the company will remain the highest-valued brand in the Oil & Gas Industry for long. Study data was collected before the spill happened, so the next ones on the list, Exxon Mobil and Shell, look poised to vie for the top spot in a year’s time.

BP’s performance before the Gulf spill was full of scandal as well, with a chemical leak in Texas just two weeks before, a spill in Alaska in 2006, a number of refinery safety violations, and a price-fixing scandal in one of its Russian operations in 2008. Its strong brand has likely helped BP survive many of these scandals, though only tides will tell how disastrous the Gulf spill turns out to be for the beaches–and the brand.

Most Popular Apparel Brand: Nike

Brand Value ($Million): 12,597

Change: 5%

A five percent increase in brand value in a year that saw the overall brand value for the apparel category shrink by four percent is significant. Responding to the slow economy, Nike reworked its brand in 2009 to focus on the basics of health and fitness and went through a round of layoffs to cut costs.

The outlook for 2010 is good, thanks in part to the FIFA World Cup that generated a ton of press for the brand (players on every team were wearing Nike’s new carbon-reinforced cleat, the Mercurial Vapor Superfly. Nike will surely benefit from the soccer fever that captured sports fans as they watched the U.S. team in July.

Most Popular Coffee Brand: Nescafé

Brand Value ($Million): 5,309

Change: -6%

Well, it was a difficult year for coffee. While the category posted an 18 percent increase in last year’s ranking, 2010 saw an overall drop of six percent. Nescafé, Nestlé’s 80-year old instant coffee brand, has weathered the storm with a wide range of instant coffee flavors, but the real innovation is coming from the health and wellness side of the company, offering new blends high in antioxidants (Nescafé Protect), and a diet brand (Nescafé Protect Proslim). With customers worldwide showing interest in more healthy products, Nescafé may be able to stay at the top of the list next year as well.

Most Popular Financial Institutions Brand: ICBC

Brand Value ($Million): 43,927

Change: 15%

The Industrial and Commercial Bank of China grew 15 percent in brand value last year, reflecting the vigorous growth of the largest market in the world: China’s GDP grew by almost 9% in 2009. Despite widespread recession, the banking and investment sector overall posted the highest overall rise in brand value, at 12%.

The state-owned ICBC, China’s largest bank, has grown thanks to its ventures abroad, which include opening up operations in the U.S. in late 2008 and acquiring a bank in Canada and the Middle East. As it continues to expand in 2010, ICBC looks set for another positive year.

Most Popular Gaming Consoles Brand: Wii

Brand Value ($Million): 9,987

Change: 21%

From toddlers to seniors, the Nintendo Wii game console revolutionized the gaming business in 2006 with its reinvention of the game controller. It also redefined what gaming is all about, with “games” that lead players through yoga or exercise moves, and its record-breaking sales in December of last year proved that the Wii is perfectly situated in a changing market focusing more on home entertainment than costly nights out.

Most Popular Retail Brand: Wal-Mart

Brand Value ($Million): 39,421

Change: -4%

A brand synonymous with value, Wal-Mart was perfectly positioned to meet Americans’ demand for affordable products. Wal-Mart’s emphasis on food products also helped keep sales high (even in a recession, you still need to eat), and its aggressive move to selling online did much for the bottom line, though not enough, as the company’s brand value decreased by four percent.

Having survived a $40 million settlement with frustrated former workers in 2009, Wal-Mart has already had a scandalous 2010. A gender-discrimination suit involving up to 500,000 female employees was greenlighted for trial and many expect another, much larger, settlement. It will have to compensate somehow if it wants to keep its place as the strongest retail brand in the world.

Most Popular Luxury Brand: Louis Vuitton

Brand Value ($Million): 19,781

Change: 2%

A favorite of both hip-hop artists and wealthy heiresses, Louis Vuitton probably gets more publicity from its high-profile customers than its iconic advertising featuring, most recently, soccer legends Diego Maradona, Pele, and Zinedine Zidane. The company even raised its prices 10% at the beginning of 2009, with CEO Bernard Arnault boasting, “We are the one brand in the world that never gives discounts.” The strategy paid off, as it grew 2% in brand value in a category that saw an overall 3% drop. With its most luxurious store open in London this year, 2010 might be another growth year for the iconic LV brand.

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