The World’s Most Misunderstood Consumer Brands

The process of brand valuation is more an art than a science, or at least that is the conclusion of research done by 24/7 Wall St. The most well-regarded “brand evaluators” rarely come up with similar figures–except for among the very largest brands. Some of their opinions diverge dramatically.

24/7 Wall St. looked at the brand valuations and methodologies of BrandZ, Interbrand, and Brandirectory. The first two list 100 brands each in their public studies. Brandirectory lists 500. Each would defend its valuations which use different “black box” systems for calculating value. That is probably because all three charge hefty fees for their services.

The explanations for their methodologies are even more convoluted.

Here is what BrandZ says: “The brand value published is based on the intrinsic value of the brand – derived from its ability to generate demand. The dollar value of each brand in the ranking is the sum of all future earnings that brand is forecast to generate, discounted to a present-day value. Given the high volatility of financial markets over the past 12 months, the brand value is in some cases high relative to current market capitalization, reflecting true value rather than current market swings.” Where is the heart of that exercise? It is impossible to say.

Interbrands has three criteria: “1) Financial performance measures an organization’s raw financial return to the investors, 2) Role of brand measures the portion of the decision to purchase that is attributable to brand – this is exclusive of other aspects of the offer like price or feature, and 3) Brand strength measures the ability of the brand to secure the delivery of expected future earnings.” Without the exact data that Interband uses and details of how it is arranged to derive a value, it is impossible say how its process works.

Brandirectory describes its methodology this way: “The methodology employed in the BrandFinance Global 500 uses a discounted cash flow (DCF) technique to discount estimated future royalties, at an appropriate discount rate, to arrive at a net present value (NPV) of the trademark and associated intellectual property: the brand value.”

All three brand valuation companies admit that sales play a critical role in brand valuation. All three claim that their forecasts of future contributions of the brands to earnings are part of their proprietary analysis. All link brand value to the overall value of a brand’s parent company.

Again, the most telling part of the comparison among the three firms is that they differ very little on the 20 most valuable brands. Oddly enough, the best way to highlight the flaw in the three valuations methods is to look at Marlboro. Its value is ranked seventh best by BrandZ at $57 billion, 18th on the Interbrand list with a value of $20 billion and 499th on the Brandirectory list with a valuation of $2.3 billion. Marlboro is the primary brand of both Philip Morris and Altria. Altria has annual sales of $24 billion. Philip Morris sales are $67 billion a year. Even in the most cerebral and bizarre world, Marlboro could not be worth as little as $2.3 billion.

24/7 Wall St., to make its point about whether brand values can be fairly measured, looked at ten brands which are ranked high on one of the three brand value lists and much lower on others. We considered the brand value from the lists, the extent to which each brand is internationally known based on overseas sales, total annual revenue, and in many cases the age and durability of the brand.

Each of the brands on the 24/7 Wall St. list is not only a well-known name in the US but also in most places around the world. A review of the BrandZ, Interbrand, and Brandirectory lists leads to the conclusion that most brands are not valued properly. The ten we have chosen are particularly notable because the so-called experts have widely differing views on how much they are worth.

1. Xerox

Interbrand Brand Value: $6.109 billion

Total Sales: $15.2 Billion
% sales international: 46%
Market Cap: $14.2 Billion

The name “Xerox” has become synonymous with photocopiers, as well as the act of photocopying. The company, which has been around for more than a century, invented the first electro-photography plain paper photocopier. Xerox is in the top 200 of the Fortune 500, and remains a well-known brand around the world. The company’s revenue was more than $15 billion in 2010, with just over $7 billion coming in from outside of the United States.
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2. Yahoo!
Interbrand Brand Value: $4.958 billion
Total Sales: $6.3 Billion
% sales international: 33%
Market Cap: $21.4 billion

Yahoo! was one of the first major web portals. Founded in 1995, the company survived the burst of the dot-com bubble and remains valuable today. Yahoo! is the second largest search engine in the US behind Google. Yahoo!, as of 2010, had the largest market share of online display advertising in the world, according to JP Morgan. Of the $6.324 billion the company made in 2010, just over $2 billion was made internationally.
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3. MTV
Interbrand Brand Value: $6.719 billion
Parent Company Viacom’s Total Sales: $13.4 billion
% sales international: N/A
Parent Company Viacom’s Market Cap: $27.2 billion

MTV has grown into an international media giant since its beginning in 1981. According to owner Viacom, the channel reached approximately 99 million television households within the United States in September 2010. On an international level, MTV Networks’ operations reached approximately 635 million households in more than 160 countries in September 2010. MTV has also expanded into film with its MTV Films division, which has produced such popular films as Zoolander and Jackass.
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4. Heinz

Interbrand Brand Value: $7.534 billion
Total Sales: $10.5 Billion
% sales international: 62%
Market Cap: $15.6 billion

Heinz’s 57 is easily the most recognized brand of ketchup the United States, and is featured on most restaurant and diner tables in the U.S. While it is the most recognizable in the U.S., more than half of the company’s $10.5 billion in annual sales comes from abroad. Besides ketchup, Heinz sells a variety of condiments, including mustard, relish, and horseradish. The last of these was actually the first product Heinz produced.
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5. Kellogg

Interbrand Brand Value: $11.041 billion
Total Sales: $12.4 Billion
% sales international: 37%
Market Cap: $19.7 billion

Battle Creek, Michigan-based Kellogg was founded in 1906, and is responsible for some of the most popular breakfast cereals in the world, including Corn Pops, Corn Flakes, Crispix, Frosted Flakes, Raisin Bran and Rice Krispies. Kellogg competes with General Mills as one of the two largest breakfast food makers in the world, producing other extremely successful products such as Eggo waffles and Pop Tarts.
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6. Phillips

Interbrand Brand Value: $8.696 billion
Total Sales: $25 billion
% sales international: ~98%
Market Cap: $31.3 billion

Dutch-based Philips Electronics is one of the largest electronics companies in the world, competing against Sony and Panasonic. The company employs about 120,000 people around the world and sells merchandise in more than 60 countries. The company invented or helped invent nearly every modern form of media storage. Along with Sony, the company has been the go-to brand for the compact cassette, the CD, the DVD, and the Blu-Ray disc. The company also sells electronics, including a popular line of televisions and sound equipment.
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7. KFC

Interbrand Brand Value: $5.844 billion
Parent Company Yum! Brands Total Sales: $11.343 billion
% sales international: N/A
Parent Company Yum! Brands Market Cap: $23.76 billion

Originally founded in 1930, KFC is now one of the largest brands owned by Yum! Brands, along with Pizza Hut. According to Yum!, as of the end of 2010 there were 5,055 KFCs in the United States and 11,798 in other countries. A surprising 3,244 of these restaurants are in China. KFC has restaurants in 110 countries and territories worldwide. In 2010, Yum! Brands had a total revenue of $11.34 billion.
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8. Danone

Interbrand Brand Value: $6.363 billion
Total Sales: $24.2 Billion
% sales international: 75% or more
Market Cap: $28.6 Billion

Group Danone, the French food-products company which markets its products in the United States under the brand name Dannon, had sales of just over $24 billion in 2010. According to the company, Danone is “the world’s leading producer in volume of Fresh Dairy Products.” The company is best known for its yogurts and bottled water. It moved into baby food after purchasing Numico in 2007.
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9. Caterpillar

Interbrand Brand Value: $4.704 billion
Total Sales: $42.5 Billion
% sales international: 70%
Market Cap: $68.2 Billion

Caterpillar is the largest manufacturer of construction equipment in the world, with annual sales of more than $42 billion, more than 100,000 employees and 178 dealers. Caterpillar’s “Cat” brand is well- known among the public and construction firms alike.
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10. Adidas

Interbrand Brand Value: $5.495 billion
Total Sales: $17.03 Billion

% sales international: N/A

Market Cap: $18.45 Billion

Adidas, the German sports apparel company, had sales of just over $17 billion in 2010. The company is the second largest sportswear manufacturer in the world, behind Nike, and the largest in Europe. Parent company Adidas AG also owns the popular brands Reebok and Rockport.

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©2011 24/7 Wall St.

Search Engine Optimization: You Can Do It!

For quite some time many of our clients have been asking about Search Engine Optimization (SEO). SEO is simply doing "stuff" so your website appears early on a search results (page 1 or 2) when someone conducts a search related to what your company provides.

Unfortunately, that is about as thorough an explanation given by "providers" of SEO services. Even worse, that is the extent of the understanding of those that contract out for this service.

Here are some tips and tricks that anyone with basic website development skills can learn and do.

1) To improve your position on a search engine result, ensure your metatags, page titles and homepage text have the key (aka common) words or words that searchers will use to search for what THEY need.
Those should include the goods or services your company provides, the industry and markets your company serves, the name of your business and the location(s) served by your business. The more inclusive and specific the list, the better your position will be.

2) Another important key to getting on or close to page 1 of search results is the amount of links to your site. How do you achieve that? Blogs, social media, partner websites and cooperative linking with other sites will improve your position on search engines.

3) Update your homepage often. Web crawlers like finding new stuff. Web crawlers look through your site for key words and relevancy to searches. Thus when content is changed, it triggers newness. When you add new or change text and key words, your position greatly improves and starts move closer to the top of the list. Why? Websites with old text are thought to be inactive or abandoned. Search engines provide value if they give you useful results. So the search engine's approach is that newer stuff is better and more useful so it gets move forward on the search results list.

If you have any questions or concerns about your current website or your SEO provider, contact us.

Silly String, Now Silly Bands hhhhhhm!

Every once in awhile I am amazed by the creativity of some marketing professionals. Some winners of my "amazement award" are the Cabbage Patch Doll, Pet Rocks, and Silly String. The most recent winner is SILLY BANDS. We never sit in judgement of a product's success. If we did, we would be questioning the judgement of consumers and users. We would never do that. If they (consumers) want to buy it, marketers should market and sell it.

We sell Silly Bands and alot of them. The real amazement comes from how fast they are flying off our shelves. We have all kinds of organizations buying these things from Girl Scout Troops to teachers to restaurants. What the heck is the appeal? It is a rubber band molded into different shapes which is not too flexible. Once you use it for whatever reason, it loses its shape.

We don't get the product appeal but know there was a great marketer behind the buzz. Can anyone tell us the message(s) that started this success?

Creating Competitive Culture (C3) Conference

Inc., the magazine for growing companies, has partnered with Winning Workplaces to discover and recognize private companies with exemplary workplaces that motivate, engage, and reward employees. Honorees will appear in the June 2010 issue of Inc., and the achievement of these companies will be commemorated at the 2010 Inc. and Winning Workplaces Conference on Creating Competitive Cultures (C3).

The event begins October 27 with pre-conference workshops that delve deeper into one of three workplace topics before a welcome reception in the evening. The next morning opens on the main stage with a presentation revealing the tangible tools for creating competitive cultures before the day culminates with an awards dinner recognizing this year's honorees. The final day of the conference will offer more main stage presentations and more intimate sessions with opportunities for greater networking and education.

At C3, you'll learn about innovative approaches from award-winning companies and extraordinary entrepreneurs, the inspirational tools and processes they deploy to build teams and workplace environments that have a lasting impact on financial results and personal satisfaction. Creating Competitive Cultures presents the newest leadership strategies for developing the best possible company culture, one that results in a loyal, motivated, inspired, and focused team.

Conference Program
The conference runs from Wednesday, October 27, 2010, through Friday, October 29, 2010.

Features:

• Keynote presentations by founders of prominent entrepreneurial companies and business celebrities
• Breakout sessions organized by themes and audience that provide networking and learning opportunities among business leaders
  

Visit the AGENDA page for more details.

Price: Early Bird Rate: $595 (expires 8/31) Conference Rate: $895

Where
All conference events will take place at the Denver Marriott City Center
1701 California Street
Denver, Colorado 80202

Answer this question...if you

We'd like to know what you think MARKETING is?

There is no such thing as a wrong answer. Lists, examples, opinions, questions, etc are all welcome.

Feel free to speak your mind as condescending responses to your comments will not be posted unless you say you are OK with them!

The 11 Keys to Success

By Julie Jansen, author of "I Don't Know What I Want, But I Know It's Not This"

In his best-selling book "Emotional Intelligence," Daniel Goleman writes, "There are widespread exceptions to the rule that IQ predicts success ... at best, IQ contributes about 20 percent to the factors that determine life success, which leaves 80 percent to other forces."

Goleman goes on to explain, "These other characteristics are called emotional intelligence: abilities such as being able to motivate oneself and persist in the face of frustrations; to control impulse and delay gratification; to regulate one's moods and keep distress from swamping the ability to think; to empathize and to hope."

This book is full of assessments, tools, resources and how-tos to help guide you in finding new work that will better meet your personal and financial needs. No matter which category you fit in, however, unless you are able to demonstrate and master a specific set of life skills and traits, you will find it difficult to find the work you want.

Observing people in the workplace has yielded 11 keys to success. Time and again, it is apparent that those individuals who exhibit these 11 keys and use them most productively are consistently the most successful and well-liked individuals overall. The good news is that most people are born with at least some of these keys or learned them at a very young age, and all of these keys can be developed or learned later in life.

These are the 11 keys to success:

1. Confidence: an unshakable belief in oneself based on a realistic understanding of one's circumstances; a trait that most people admire in others and strive to acquire themselves.

2. Curiosity: being eager to know and learn; always showing interest and giving special attention to the less obvious; always being the person who says, "I want to know more about . . . ."

3. Decisiveness: arriving at a final conclusion or making a choice and taking action; making decisions with determination even when you don't have all the information you think you need.

4. Empathy: demonstrating caring and understanding of someone else's situation, feelings and motives; always thinking about what it's like to walk in someone else's shoes.

5. Flexibility: being capable of change; responding positively to change; being pliable, adaptable, nonrigid and able to deal with ambiguity.

6. Humor: viewing yourself and the world with enjoyment; not taking life or yourself too seriously; being amusing, amused and, at times, even comical.

7. Intelligence: thinking and working smartly and cleverly; being sharp in your dealings; "not reinventing the wheel"; planning before acting; working efficiently and focusing on quality over quantity. (Important note: This is different from IQ, the common abbreviation for intelligence quotient.)

8. Optimism: expecting the best possible outcome and dwelling on the most hopeful or positive aspects of a situation; believing that the glass is half full rather than half empty.

9. Perseverance: having passion, energy, focus and the desire to get results. Motivation, persistence and hard work are all aspects of perseverance.

10. Respect: remembering that it is just as easy to be nice; protecting another person's self-esteem; treating others in a considerate and courteous manner.

11. Self-awareness: a sophisticated form of consciousness that enables you to regulate yourself by monitoring yourself, observing yourself and changing your thought processes and behaviors.

Which of these keys are among your strengths? Which of the 11 are among your weaknesses? Self-awareness, the 11th key, is really the foundation for understanding yourself. If you are not sure how self-aware you are, ask several people whom you trust which of these 11 keys they believe are your strengths and which are not.

Again, while no one person possesses all of these keys in equal amounts, each of them can be developed and improved.

Copyright 2010 Julie Jansen All rights reserved.

Some Resolutions on Planning

Some Resolutions on Planning

By KEVIN VANN

As the calendar turns to 2010, business owners and managers should be thinking about resolutions, especially those involving effective planning.

Here are several types of planning that decision makers should consider critical for the year ahead.

Strategic Planning: Take time to research how to go about doing strategic planning and with whom. Perhaps the company can do it on its own, or perhaps it should hire a facilitator. In any case, set aside one or two days for strategic planning. This is one of the most critical blueprints every business should have, and it should be done at least once a year. This process should include owners and key staff members and perhaps outside consultants and independent parties as well.

Technology Planning: Each business should minimally have an internal staff member or an outsourced consultant to guide every company through the rigors of changing and updating technology. Time should be set aside for owners and key staff to be educated on a continuous basis. Technology will drive efficiencies, productivity, and revenue for most companies.

Employee / Staff / HR Planning: Each business today minimally needs either a staff person or an outsourced consultant to keep them up-to-date with the constantly changing compliance issues involved with having employees. Additionally, this planning model should include internal company issues, benefit packages, recruiting, retaining, and staying competitive. Any company that has employees should have a handbook minimally. The handbook should be reviewed annually.

Succession and Long-term Planning: Depending on the size of the company and the owner’s philosophy about life and business, succession and long-term planning for a company, the owners, and key staff should be a priority. If the owner of a company has done a good job addressing his or her own retirement and succession issues, then the company will continue to thrive. Fear of the unknown is the greatest fear, so the more effort the company puts into proper planning for the owners and key personnel, the better chance it has to continue. Even if an owner indicates an unwillingness to do succession planning, then certainly having a plan that indicates when and how to sell or liquidate the company is important.

Tax Planning: This has been pretty much accepted as an annual task by most business owners and key personnel; however, it’s still surprising just how many businesses make decisions, take on risk, and do business without properly understanding the tax consequences of their decisions.

Budgeting and Financial Planning: I just can’t imagine a business — or an individual, for that matter — not making budgeting and financial planning a priority on an annual basis. Unfortunately, many, many businesses fail to do annual budgeting and financial planning. The budgeting process should include solid projections relative to revenue, expense planning, and profit expectations. This planning should also include cash-flow projections that take into account what capital expenditures need to be made, how much debt will be paid down, or how much debt or equity will be required to run or capitalize the business. The budget or financial plan should include the company’s ‘wish list’ for the coming year, and typically that list includes the items or initiatives from the strategic plan and all of the other planning during the year. The budget should be the by-product of all of the annual planning that has been done.

PODCAST: What Great Bosses Know

This is a PODCAST on the subject of presenting and presentation delivery. No matter how good you are you can always get better.

"What Great Bosses Know". Click this link to check it out: http://poynter.podOmatic.com/entry/2009-11-05T10_00_15-08_00

Overqualified employees are a waste

Having hired overqualified individuals, I can attest to some of the challenges and waste of resources. Overqualified individuals tend to get bored. That is a nice way to say they under perform. They find that the work they are doing is either beneath them or not where they want to be in their career. So they find it hard to motivate themselves to perform well. They tend to go through the motions to achieve bare minimum.

The other negative of hiring someone who is overqualified is that they will leave as soon as something "better" is offered. In this case the employer wasted time in the hiring and training process. When the overqualified employee leaves quickly, the employer is back to square one.

The last thing is that some overqualified employees try desperately to change the scope and responsibilities of their work so that it is closer to their career goal / path. They focus on what they like and tend to let the other things slip.

Eventually the overqualified employee will quit to do something "better" or get fired for poor performance. It may seem like over-qualified candidates are always a bad move. Not true...the always part that is. There are occasions when they work hard and become fast trackers to success. These are the real professionals who are not selfish and are keepers. The odds are not in the employer's favor, so employees and employers do both of yourselves a favor and match the skills and career path to the position.

What is branding?

It is interesting how many non-marketing professionals use the term branding incorrectly. Branding is a powerful strategy and marketing objective. When implemented and created effectively, the brand can become a real competitive advantage.

Branding involves the analysis of four areas:

1. your capabilities relative to your competition for your target market and customers,


2. your marketing message that communicates your capabilities that are different and more desirable for your target market and customers,


3. the decoded marketing message understood by your target market and customers,


4. and, your target market's and customers' perception of your product and or service quality.

Branding is the mental and emotional connection that the consumer, customer, prospect or user of your product and or service has associated with your name. This connection could be good or bad.

A strong branding strategy is more than just creating an attention-getting advertising campaign or slogan. The communication campaign should infer a promise of a certain quality level. That quality level now becomes the expected quality for the consumer. So the company must at least deliver, but preferably exceed, that expected level of quality. The communications campaign should also position your company, product or service to differentiate it from your competition. The final component is delivering quality. That quality is the perceived quality of the customer. You must deliver better value, image, or solutions than what your competition can deliver. The use or your product or service will also convey a message and will help stimulate perceived quality.

If you miss the mark on any of these, you certainly do not have a strong brand and some might even argue that you have no brand.

American car companies must refocus on the PRODUCT portion of the Marketing Mix

The American car companies have been mismanaged for decades. The focus for this time period has been money and profits. Improving quality and addressing customer demands have not been used to drive the business objectives. It is terrible business practice when the accounting and finance departments are driving decisions that affect product quality and customer demands.

American car companies have no valid plan for getting it right. If they focused on basic customer needs such as extended reliability, defect reduction and increased miles per repair costs, they would have never needed bail out money.

Detroit ask car customers (yours and the competitions') what they want in a car. Ask them to elaborate so you can fully understand. Listen closely and read between the lines and then ask more questions. Then focus on meeting their needs. The Japanese get it and the Korean car makers are getting it. If you don't play correctly you are going to continue to lose and should just go away. It is that simple!

Hispanic Marketing Day 2009 (May 7, 2009)

“The San Diego Hispanic Market: An Economy Within An Economy”The San Diego Ad Club is proud to present the 16th Annual Hispanic Marketing Day designed to bring you the latest information on this vibrant economy within our economy. All attendees will receive the newly updated Hispanic Marketing Resource Guide.

11:30am – Networking and Check-in
12noon – Guests move to ballroom
12:30pm – 1:15pm – Presentation Panel discussion moderated by Robert Santiago, Director of Client Services, La Agencia de Orci & Asociados

Panelists:
Jeff Overton, Executive Vice President, Business Operations San Diego Padres,
Joe Benites, President,The Benites Group, Inc.
Laura Hernandez, Senior Hispanic Media Relations and Marketing Specialist, Sharp Healthcare 1:15pm – 1:40pm – Lifetime Achievement Award1:40pm –
1:45pm – Wrap Up, Adjourn

Location:
The Prado at Balboa Park 1549 El Prado San Diego, CA

Ethnographic Research

Ethnographic research has become an indisputable way to understand your customers. This type of research requires that the user/consumer (not customer) of your product be observed while using your product. Many times a company thinks they fully understand how the customer uses their product. Unfortunately customer usage is usually not understood by companies.

Ethnographic research is very enlightening to product managers, engineers and developers of products. The research involves interviewing the user to understand why they used the product the way they did. Interview questions should attempt to understand why features and alternative methods of your product were not considered or used.

Ethnographic research is a real "outside-in" approach to researching users' opinions and demands. No one can argue with it. The information is coming directly from the user while using your product, not while imaging or recalling how they once used it. Marketing Excellence has been using this type of research for many years. We have been very successful conducting ethnographic research with software and computer-based products as well as products that are complex to operate (electronics), personal (garments/clothing), or seldom used (home improvement tools for the do-it-yourselfers).

Marketing is more than just advertising and sales

Why is it that the most diverse profession in the world is always associated with only two functions, advertising and sales? Perhaps its ignorance or complexity or a little of both!

Marketing begins with marketing research, the gathering and analysis of data about customer profiles and buying behavior, competitor's capabilities and weaknesses, industry trends, and many more topics.

This input is used to identify problems and create possible solution(s). From there marketing looks at logistics, messaging, value propositions, gap analysis, benefits, technology trends, cost and profit margins, psychological impact, distribution channels, naming, colors, features, ... and on and on.

I think you get the idea. Marketing is the most diverse and thus complex of all professions as it touches every business function in an organization.

Excellence is NOT interchangeable

Marketing is my beloved profession. In my almost 15 years in marketing I have seen many excellent performers in other fields make an attempt to work in marketing. Many different challenges are encountered:

1. Engineers: Good ideas can only be proven with an "engineering" formula


2. Salesperson: Sell it at any price because some money is better than no money


3. Finance & Accounting: Margin analysis and risk mitigation need 3 years worth of history
4. and many more

A true marketing professional must always be looking at the big picture which includes all of the above AND much much more. All too often these individuals who are not real marketing professionals are looking for the "Silver Bullet" (as found in a marketing book or business magazine).

When selecting that marketing manager or marketing firm wouldn't you agree that the marketer who brings a complete view on your problem or opportunity is the way to go. The moment that the marketing "pro" zeroes in on one aspect of your problem or opportunity, they have missed or will miss all the other necessary inputs and contributors. One of those that are missed is sure to be important.