The world's most valuable brands

The latest edition of the “Brandz Top 100 Most Valuable Global Brands” was released last week. An annual ranking of the world's most valuable brands, it is keenly awaited by marketers worldwide. This year's results made headline news immediately, because Apple took the top spot, effortlessly overtaking giants such as Google (last year's leader), IBM, McDonald's and Microsoft.

The Brandz rankings are based on the Millward Brown Optimor model. The study uses information from an amazing two million in-depth consumer interviews in 30 countries, as well as publicly available financial information, to arrive at the power list of global brands. It is widely accepted as one of the most comprehensive annual rankings of brand value. Each year, it also throws up big consumer trends and marketing lessons. Here are some interesting highlights, trends and surprises in this year's Brandz rankings.

Apple: the most valuable brand in the world

Apple occupies the No. 1 global rank, with a phenomenal brand value of $153 billion. Its brand value is now the equivalent of Peru's GDP. As the Brandz report says – “When a single brand creates as much value as the entire economy of a fast-growing Latin American country, it's time to stand and take notice.” Powered by an immensely successful new product, the iPad, as well as new versions of existing products such as the iPhone, Apple's brand value grew by a stupendous 84 per cent over the past 12 months. This is the triumphant story of excellent consumer insight translated into brilliant products. Apple understood consumers were hungry for easy-to-use access to data and images wherever they went. It met this latent need with the iPad and the iPhone 4. By end-2010, nearly 20 million consumers worldwide owned either an iPad, or one of the many other tablets launched in its wake. No wonder brand Apple is right at the top.

The top ten brands

Apart from Apple, the other brands in the top ten ranks this year are Google, IBM, McDonald's, Microsoft, Coca-Cola, AT&T, Marlboro, China Mobile and GE. Notice how this list is dominated by technology and telecom brands – six of the top ten brands are from these two categories, reflecting their growing influence over our lives. In sharp contrast, brands from traditionally large industries such as cars, banking and consumer durables do not feature in the top ten. It is also relevant to note that nine out of these ten top brands are born and headquartered in the US. Despite all the talk about the rise of Asia and Latin America, the US remains by far the most dominant influence in the global world of brands.

The China effect

While the US continues to be the epicentre of the world of brands, China has begun making an early impact. This year, 12 Chinese brands feature in the Top 100. These include China Mobile (the only non-American brand in the top ten), the Chinese search engine Baidu, China Life Insurance, and a social network brand called Tencent/QQ. Many of these brands reflect the huge size of the Chinese market, and the growing affluence of its population. For instance, the social network Tencent/QQ has over 800 million (!) users in China, which is more than the number of people who use Facebook worldwide. Similarly, Baidu has established a market share of over 80 per cent in the Chinese search market, driven by its deep understanding of China's diverse cultures and languages.

In contrast, only one Indian brand (ICICI Bank) features in the 100 most valuable brands. Are Indian brands missing a trick, or is it just that India is lagging China by a few years, in market size and affluence?

Amazon overtakes Wal-Mart

A surprise this year is the top ranker in the retail category. Amazon, the online retailer, overtook the giant Wal-Mart to become the most valued retail brand. It achieved a brand value of $37 billion, despite having no brick-and-mortar stores at all. This is a clear pointer to where the future of retailing lies. With the increasing use of Internet search engines, Facebook networks, tablet computers and smart mobile phones, online shopping has suddenly become very big in several countries. Amazon has leveraged this trend superbly, with an unparalleled selection of products, an excellent e-commerce foundation, and the recent addition of new merchandise categories including food. eBay is not far behind, it is already the sixth most valued retail brand in the world.

Diet Coke overtakes Pepsi

In the beverages category, Coca-Cola has always occupied the No. 1 rank, and Pepsi has for several years been ranked second. Once again this year, Coca-Cola retained the top slot. But in yet another surprising change, Diet Coke knocked Pepsi out to emerge as the second most valued soft drink brand. This shift reflects the global trend towards health and wellness, and growing concerns about obesity, particularly in rich nations. The move towards functional and energy drinks was further emphasised by the growing brand value of Red Bull, which moved to the No. 4 rank ahead of Fanta and Sprite; and also by Gatorade, which is now ranked seventh.

Toyota retains its top spot

Toyota retained its ranking as the most valued brand of cars in the world, despite quality issues and the widely reported recalls of over eight million cars. In fact, Toyota increased sales by a handsome 8 per cent worldwide during the year, selling over 8.4 million cars during 2010. This is an illustration of how a strong brand can withstand and overcome problems, by being transparent with its consumers, and by implementing necessary actions swiftly. Not merely did Toyota order the recalls of these faulty cars at enormous cost, but it also introduced an extended warranty on its new cars to reassure consumers immediately. The brand also continued to invest strongly in Toyota Prius, pushing the agenda on fuel efficiency. Indeed, as the Brandz study points out, Toyota's recent travails and smart recovery is a textbook example in brand resilience.

Luxury is back

Luxury brands have recovered surprisingly rapidly, post two years of recession. The brand value of the most powerful luxury marque, Louis Vuitton, surged 23 per cent within a year, to $24 billion in this year's rankings. Similarly, the value of Hermes rose 41 per cent to $12 billion, and Cartier strengthened by 34 per cent to $5 billion. Luxury brands make people feel good about themselves in a timeless sort of way, and affluent consumers who had shunned conspicuous consumption during the depths of the economic downturn were no longer apologetic about buying into these labels. However, in an attempt to develop a new and more responsible ethos of luxury, many of these brands emphasised social responsibility – such as impact on the environment, on African mines, on people in manufacturing units.

McDonald's becomes McStronger

If you thought McDonald's is on the decline because high-calorie junk food is going out of fashion, think again. The world's largest fast food brand increased brand value by a handsome 23 per cent, to $81 billion. It achieved this increase by riding the trend towards health, while continuing to woo young tastebuds with burgers and French fries. For instance, it introduced oatmeal in many of its restaurants, and added a $1 healthy breakfast option as well. These new introductions suddenly provided many more family dining possibilities, and drove significantly higher traffic into the Golden Arches. They also helped counter the rapid rise of health-and-freshness focused brands such as Subway, which had, earlier this year, overtaken McDonald's in the total number of outlets worldwide. A lesson in how brands can become stronger by extending themselves smartly, if they leverage big consumer trends.

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