To calculate the value of each brand is not a simple thing. Milward Brown first takes the earnings of a company, and calculates what portion of that is attributable to a product or service that has a particular brand. After subtracting taxes and capital charges, they then calculate what portion of the "brand intangible earnings" are attributable strictly to the brand, and not to price or location. Then they use a "brand contribution" number which was concocted as a result of a survey of one million loyal users in 30 countries. Then they calculate the brand's future earnings, and multiply everything together.
In short, it's a complicated way to assign a tangible number to an intangible asset. And, of course, it doesn't take into account any product recall, oil spill, or CEO scandal that can devalue a brand instantly and alter the image of the brand for generations. But really, who can argue with Millward Brown's rankings? Their methodology is just as plausible as any other complicated calculation that anyone would concoct.
Interestingly enough, although the Wal-Mart company is the largest retail company in the world in terms of revenue, according to the BrandZ rankings, the Wal-Mart brand is not the most valuable retail brand in the world. Another retail company's brand which is considered to be invaluable by its CEO has never made the "Top 100 Brands" list. Apparently the Abercrombie & Fitch brand isn't quite as valuable as Mike Jeffries seems to think it is.
Is the value of the Marlboro cigarette brand really greater than the value of the Amazon.com brand? That would probably depend on whether you're a smoker or not, and whether you shop online or not. The bottom line is that no matter how you quantify it, the value of a brand rests in the mind of the consumer. A company can work for years to cultivate the value of a brand, and that value can be strengthened or destroyed in any one of millions of touchpoints with consumers every single day. Managing a brand is somewhat like chasing rainbows.
What follows is a list of the retail brands that were included on the BrandZ Top 100 Global Brands ranking list in 2010. Some of the companies that are listed below are not strictly retail companies, but their retail operations are significant, whether they're carried out in physical stores, or via direct marketing channels. The number in the left column is the ranking number assigned to the brand, out of a total of the 100 brands that were designated as the "top" brands in 2010.
2010 BrandZ Top 100 Global Brands:
81 Home Depot
More About the Value of Retail Brands:
- Retail Mission and Vision Statements
- Most Admired Retail Companies Most Reputable Retail Organizations