New York: The battle for brand supremacy rages on, with Apple, Coca-Cola, and Microsoft taking the top three spots in Forbes’ World’s Most Powerful Brands list, published today on Forbes.com, with consumer perception data provided by Landor and Penn Schoen Berland (PSB). The results will also appear in the 22 October print edition of Forbes magazine.
“Brand managers often look within their organizations when trying to outsmart and outdo the
competition, but we believe the consumer is often king and these results support that,” said Billy Mann, managing director at Penn Schoen Berland. “The brands that made this list are those that make it a point to enable people to do things – better, faster, and in a more authentic way. It’s the reason why there are so many tech and consumer brands that resonate with us in an intrinsic way on this list.”
Surveying 2,000 adults in Brazil, China, Germany, India, the UK, and US, Landor and PSB evaluated brands on 12 attributes of purpose, to give Forbes a list of brands that consumers perceive are leaders in their categories. Among the attributes tested were Is honest and trustworthy; Invests in its customers; Positively impacts the everyday lives of consumers; and Invests in innovative ideas and research.
In his analysis of the findings for Forbes.com Allen Adamson, managing director of the New York office of Landor, said, “It used to be that consumers judged brands on pretty simple criteria, but today they’re being judged on factors that go above and beyond just delivering a decent product or service. To have an edge and keep it, brands have to deliver on a higher purpose. And, while all brands should aspire to be number one on every dimension of purpose, they should first take the time to understand what each really means – to them and their customers.”
Methodology
To determine the best brands, Forbes started with a universe of more than 200 global brands. Each brand had to have more than a token presence in the U.S., which eliminated some big brands like Spanish apparel retailer Zara and China Mobile, which is the world’s largest mobile phone provider.
Forbes then valued the brands based on their financial metrics; the first step was to determine earnings before interest and taxes for each brand. Forbes averaged those earnings over the past three years and subtracted from earnings a charge of 8% of the brand’s capital employed, figuring a generic brand should be able to earn at least 8% on this capital.
Forbes applied the maximum corporate tax rate in the parent company’s home country to that net earnings figure, then allocated a percentage of those earnings to the brand based on the role brands play in each industry. (Brands are crucial when it comes to beverages and luxury goods, but not so much, say, with airlines, when price and convenience are more important.) To this net brand earnings number, they applied the average price-to-earnings multiple over the past three years to arrive at the final brand value. For privately held outfits we applied an earnings multiple for a comparable public company.
Forbes then provided Landor and PSB with 130 brand names that were each valued at more than $2.5 billion. The firms surveyed 2,000 global consumers on their perceptions of the brands on 12 attributes like: “invests in innovative ideas and research,” “positively impacts the everyday lives of its customers, “maintains high standards of quality in its products” and “understands and addressees my unique needs.” Landor and PSB averaged the ratings for each attribute and added the scores together to derive at a sum score for each brand.
Forbes indexed the consumer perception scores and brand values so the most valuable brand (Apple) scored 100 for value and the best with consumers (Microsoft) scored 100 on perception. Forbes averaged those two score together to determine the World’s Most Powerful Brands. The brand value ultimately carries more weight because of the wide disparity in values, which range within the top 100 from Apple at $87.1 billion to Armani at $3.1 billion.
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