Globalization through Global Brands:
Purely an American-Made Phenomenon?
Abstract
Globalization is a highly controversial issue among many in academia,
business, and government. It has been faulted for a number of problems
afflicting societies and credited for the benefits it bestows upon
others. Those opposing globalization usually place blame on America as the
primary force behind the phenomenon. This paper looks at global brands, a
potent symbol of globalization representing a country's economic and
cultural might, to determine if America is the driving force behind
globalization.
Paper submitted to the International Communication Division of AEJMC
Daniel Marshall Haygood
University of North Carolina – Chapel Hill
Park Doctoral Fellow
700 Bishops Park Drive
#302
Raleigh, North Carolina 27605
(919) 834-4917
[log in to unmask]
[log in to unmask]
Globalization through Global Brands:
Purely an American-Made Phenomenon?
Abstract
Globalization is a highly controversial issue among many in academia,
business, and government. It has been faulted for a number of problems
afflicting societies and credited for the benefits it bestows upon
others. Those opposing globalization usually place blame on America as the
primary force behind the phenomenon. This paper looks at global brands, a
potent symbol of globalization representing a country's economic and
cultural might, to determine if America is the driving force behind
globalization.
Paper submitted to the International Communication Division of AEJMC
Globalization through Global Brands:
Purely an American-Made Phenomenon?
On Sunday, August 12, 2002, José Bové, a French farmer, returned to the
Millau, France McDonald's, the site and origin of his recent fame, to lead
several thousand of his supporters, mostly members of the Small Farmers'
Union (Confédération paysanne), in a protest of unchecked, rampant
globalization and assert their demand for support from the French
government for French farmers. The impetus of this particular protest was
the surcharge employed by the United States on Roquefort cheese. But, it
was just three years ago, in 1999, when Bové and his supporters dismantled
that same McDonald's restaurant, while in construction, in this small
village in southern France instantly gaining affection among those uneasy
with the steady growth of foreign companies and influence on French
soil. Since then, Bové has become a symbol and almost mythical figure for
the forces from around the world aligned against any form of
globalization. Indeed, he is the anti-globalization movement's folk hero,
even garnering the nickname of "Asterix," the Gallic comic hero who fights
against the Roman army occupiers of more than 2000 years ago (Keaten, 2002 ).
For these anti-globalization forces in Millau both in 1999 and in 2002,
their complaints were perhaps misdirected. In fact, the irony in the case
of the French farmers using McDonald's as a symbol for their protests is
that the 850 plus McDonald's restaurants in France purchase 80% of their
products in the French market providing economic assistance to the
approximately 45,000 French beef producers. European countries provide the
other 20% (Keaten, 2002). Thus, the overwhelming majority of the food
served at the French McDonald's originates in France. In addition, all the
local McDonald's jobs are filled by the local French workers. Most of the
actual McDonald's restaurants are owned by the French. And the head of
McDonald's in France is a Frenchman. So, what exactly were the farmers
protesting?
Perhaps one no was really sure. But then again, the anti-globalization
crowd is not particularly known for the depth and thoroughness of their
thinking. The Millau protests and the protests at the World Trade
Organization meeting in Seattle several years ago were really about
globalization. For many, this broad concept, against which these
protesting forces are mobilized, means the spreading of American or western
values through the exportation of western style capitalism to other
countries. But globalization can be hard to pin down. For various groups,
it can take on different meanings. For some, it is the instantaneous
electronic transfer of capital to any part of the world. It means a
multinational corporate feeding frenzy on small, local unprotected
markets. It means the imposition of strict, market-opening trade rules in
return for "unfair" western debt restructuring on vulnerable countries that
have no choice but to accept. For others, it means the wiring of the world
so that a select few media conglomerates have the ability to reach billions
with a western spin on news, information, and entertainment. And for most,
there is a big American component to globalization.
For those French farmers in Millau, McDonald's was simply the most
convenient and most conspicuous symbol of globalization. But it could have
been Coca-Cola, Starbucks, or CNN, all vivid and highly visible symbols of
globalization. McDonald's, the iconic American fast food brand, and its
fellow global brands provide fresh fodder for the legendary complaining so
popular among the Europeans, cozily camped out in their cafes and
bistros. McDonald's represents to many Europeans, particularly for the
increasingly frustrated French, what they resent about America and its
overwhelming influential cultural, economic, and military position in the
world.
Actually, brands may provide an intriguing measure of globalization. This
is because they represent not only economic power but cultural influence
and a form of cross border communication as well. Specifically, brands are
an extension of country's economic reach across its borders into the
marketplace of another. Regarding cultural influence, brands are usually
reflective of the beliefs and values of the country of origin. In fact,
some would argue that brands are simply another form of United States
economic and cultural hegemony. Plus, there is a strong communication
element to brands. Brands are supported by millions of dollars of
advertising that are communicated over the local country's airways, printed
in its local newspapers and magazines, and plastered on billboards and its
transit system.
This paper will attempt to determine a key driving force behind
globalization by looking at global brands and their country of origin. Is
the United States really the driving force of globalization?
Literature Review – Branding and Globalization
This literature review section will review the key literature on both
branding and globalization. First, brands and the concept of branding have
become highly prevalent in business and society. In fact, over the past
several decades, branding has emerged as a specialized field in marketing
and advertising, and the literature has mirrored this dramatic
growth. Specifically, business leaders and scholars have contributed to a
growing body of work around the brand-building concept. Almost all of the
existing work centers on the fundamental concepts involved in branding such
as brand definition, evaluation, and the tools used in building
brands. Plus, there is a growing body of work that extends the concept to
other areas. For example, there are books and research regarding building
Internet brands and the necessary skills required to develop and maintain
brands using the Internet. However, there has been no research that
attempts to understand globalization through the measurement of global
brands. Yet, we can begin to understand the importance and value of
branding and its role in the global economy by tracing the broad outline of
the existing work on brands from its early stages in defining the branding
concept to current published work that features more refined techniques
such as how to heighten consumers' "brand experience" on the Internet.
One of the earliest and most important publications on brand-related
issues was from Ries and Trout (1981). The book, Positioning: The Battle
for Your Mind, deals with the fundamental issue of creating a basic
position for a brand and communicating that position in advertising in a
single-minded way. Additionally, this book recognizes the power of a
strong, clearly positioned brand in creating extensions and flanker
products, which feed off the strength of the base brand.
Perhaps the key publication signaling the growing importance of brands is
Aaker's Managing Brand Equity (1991). In this work, Aaker (1991) helps to
define brand equity beyond the broadly accepted definitions of "brand
heritage" or "general collection of brand images" in consumers'
minds. Aaker breaks down the brand to five, key components: brand loyalty,
brand awareness, perceived quality, brand associations, and proprietary
brand assets.
Feeding off Aaker's thinking, books and articles about "managing" brands
for long-term health emerged. Strategic Brand Management's (Kapferer,
1992) focus is on successfully managing a brand over time by avoiding
common obvious mistakes, maintaining a contemporary image, introducing
extensions, and optimizing the brand portfolio.
Additionally, much of the early thinking on branding was centered on
"brand personality" whether communicated by television ads or other forms
of communication (Durgee, 1988; Aaker, Stayman, & Hagerty, 1986). The
personality represents the "voice" or "attitude" of the brand and is a
major differentiation point versus competitors.
Plus, brand personality is recognized as a key component of brand goodwill
with consumers (Batra, Lehmann, & Singh, 1993) and a crucial element in
developing a "relationship" with consumers (Blackston, 1993). Refining the
idea further, Aaker (1997) identifies five distinctive, personality
dimensions of brands and within those dimensions, a set of numerous
personality traits with which consumers identify brands through advertising.
The discourse on branding eventually evolved to how to measure the success
of brands, particularly brand equity. Keller (1993) refines the definition
of brand equity as "consumer-based" brand equity or consumer knowledge
about the brand over and above that of a generic product in the
category. Thus, it is a definition of brand equity based on the outcomes
or effects of the marketing efforts of a particular brand. Keller further
outlines this definition in Strategic Brand Management (1998), which
incorporates techniques for building, measuring, and managing brand equity.
Recently, the literature has focused on the broader issue of building
strong brands. In Building Strong Brands, Aaker (1996) presents a complete
process for creating a strong brand. The process begins with a strategic
brand analysis, developing the brand identity, implementing the identity
via positioning and advertising execution, and finally tracking the brand
health through research. Aaker recommends the "Brand Equity Ten," ten
measures designed for measuring the success of advertising in creating a
strong brand. Keller (2000) offers an alternative outline for the creation
of strong brands. This is a set of ten characteristics that strong global
brands have in common such as delivering solidly against consumer wants,
staying relevant, maintaining a proper position, and receiving proper
support consistently over a long period of time.
Finally, a broad range of new work is emerging regarding branding in the
age of the Internet, reinforcing the need for brand building skills in the
high-speed economy. Deep Branding on the Internet outlines ways in which
the Internet can help build brands through a consumer's meaningful and
productive experience on a brand's Web site (Braunstein & Levine,
2000). The 11 Immutable Laws of Internet Branding reviews the necessary
elements in building Internet brands (Ries & Ries, 2000). And Warp Speed
Branding reveals how technology and speed of business places even more
importance on using the Internet to build brand relationships with
consumers (Winkler, 1999).
Regarding the literature on globalization, it is common to see
globalization defined in a number of ways, often based on the writer's
agenda. Perhaps Thomas Friedman (1999) captures it best when explaining
that it is a post-Cold War system in which capital, technology, and
information are integrated across traditional national borders. The result
is the formation, to some extent, of a much closer and connected world or a
"global village" (Friedman, 1999).
In similar fashion, Joseph Stiglitz (2202) defines globalization as "the
closer integration of the countries and peoples of the world which has been
brought about by the enormous reductions of costs of transportation and
communication, and the breaking down of artificial barriers to the flows of
goods, services, capital, knowledge, and (to a lesser extent) people across
borders" (Stiglitz, 2002).
Freidman and Stiglitz reflect a sober, reasoned approach to
globalization. However, there are other views, much more negative in tone
and content, that are best represented by Naomi Klein (2000). Clearly,
Klein disdains the forces of globalization and its consequences. She
claims that the ills of society are largely due to the incessant greed of
multinational corporations. In Klein's full-fledged assault on brands, No
Logo, she is one of the first authors to make the connection with
globalization and global brands (Klein, 2000).
And yes, for the most part, she points her finger right at American
corporations. Most all of the references and examples in her book are
about American corporations. One wonders if Miss Klein travels much or if
she can even recognize foreign-made brands. Her bottom line is that we are
all consumed by this American-led, soul-sapping movement embodied by brands.
So, do other authors portray globalization as being a product primarily of
America? Stiglitz (2002), like many scholars and writers, acknowledge that
many place the blame of globalization's failures at the United
States. However, Stiglitz presents an analysis of the successes and
failures of globalization and proposes a number of actions to remedy what
has gone wrong. He avoids the convenient and popular reaction of decrying
the United States. Rather, he writes that the International Monetary Fund
is the primary culprit for the disappointments of globalization (Stiglitz,
2002).
Friedman (1999) as well notes that most view this "system" as
American-made, therefore they blame America. "For some people,
Americanization-globalization feels more than ever like a highly
attractive, empowering, incredibly tempting pathway to rising living
standards. For many others, though, this Americanization-globalization can
breed a deep sense of envy and resentment toward the United States – envy
because American seems so much better at riding this tiger and resentment
because Americanization-globalization so often feels like the United States
whipping everyone else to speed up, Web up, downsize, standardize and march
to America's cultural tunes into the Fast World….It is about the other
backlash against globalization – the rising resentment of the United
States that has been triggered as we move into a globalization system that
is so heavily influenced today by American icons, markets, and military
might. (Friedman, 1999).
The research progression reviewed above indicates that there are several
gaps in the existing research. First, with the exception of Klein, little
has been written about global brands and their connection to
globalization. And second, there has not been an analysis of global
brands, their home country, and the extent to which brands are marketed
internationally. Which country is creating all these brands and
distributing them around the world? Could it really be the United States,
the country often derided in international business circles as being
stunningly incompetent outside its own borders?
Theoretical Framework
The theory on which this paper is based is "framing." Robert Entman (1993)
defines framing as involving the selection and salience of a message that
is intended for communication. Branding is essentially all about
framing. It is the selection of a message, or what the brand stands for in
the context of the competitive brand environment, and communicating that
message in all forms of brand communications. This includes advertising,
packaging, public relations, product delivery, service, all consumer
contacts, etc. Regarding framing, effective communication involves
selecting or highlighting a frame, or a word or number of words, that
communicates the essential message (Kahneman & Tversky, 1984). By simple
selection or highlighting of an item, this elevates the item's
salience. Communicating with a salient message enhances the chances for
successful communication with a target audience (Fiske & Taylor,
1991). But just as important as choosing what to highlight is choosing
what to omit. Inclusion and omission of elements in a message are both
important in communicating a message (Sniderman, Brody, & Tetlock,
1991). Essentially, framing and branding are very much the same.
Overall, this paper is an effort to study globalization through the
presence of global brands. Is the United States the primary driver of
globalization? If so, then would it not be true that US brands dominate
other countries' brands in markets all over the globe? Or are brands from
other countries just as powerful in their presence and strength as the
brands from the United States?
Method
The primary method for this study will be to quantitatively analyze a
database of strong brands. The data used for this study is from
Interbrand's "World's Most Valuable Brands." It is a ranking of the top
100 global brands, brands with a value of at least $1 billion. This year,
2002, is Interbrand's fourth consecutive year of creating a "Most Valuable
Brands" list.
Interbrand, a well-known branding consultancy, developed a technique for
assessing the monetary value of brands. In fact, Interbrand was one of the
pioneers in establishing a formula for brand valuation. This Interbrand
formula has become the standard for companies from around the globe and is
accepted by marketing and financial entities such as management
consultancies, academics, accounting firms, auditors, banks, advertising
agencies, and other professionals. Over the past thirteen years, the firm
has worked with over 2500 global brands in providing branding valuation
services (Khermouch, 2002).
There are two primary criteria for inclusion in Interbrand's survey: (1)
brands must be global with significant revenue coming from the primary
global markets, and (2) sufficient marketing and financial data has to be
available to the public in order for a proper valuation of brand
value. This last criterion is extremely important. Depending largely on
public available date, Interbrand works with Citigroup in developing the
financial forecasts involved in the valuation. Thus, companies that
provide inadequate data publicly are not included in the research;
companies such as Mars, BBC, CNN, and VISA (Khermouch, 2002).
The specific model used to determine brand value calculates the net present
value of the earnings the brand is expected to generate in the unspecified
future. This is brand value. Below is a very broad explanation of the
model and its key four elements. It should be noted that the specific
details of the model are proprietary information of Interbrand's and not
released for public consumption.
(1) Financial Forecasting – This element is the projected revenue the brand
is expected to pull into the business in the future minus all operating
costs, taxation, and capital used to operate the brand business. This
leaves the intangible earnings, which represents earnings generated by the
intangibles of the branded business. In other words, this figure tries to
capture the value added by the brand versus the functional aspect of the
product.
(2) Role of Branding – This is the analysis that calculates brand earnings
as a portion of intangible earnings. These are the earnings that are
identified as being brand generated only. This is done by a study of the
primary drivers of consumer demand in the product category.
(3) Brand Risk – This analysis discounts the brand earnings variable to a
present value for the brand. It assesses the risk profile of the projected
earnings in conjunction with a measure of brand strength, which includes
market characteristics, stability, leadership, support, trends, geography,
etc.
(4) Brand Value Calculation – The final calculation leads to the brand
value. The actual value depends on good financial performance and a strong
position in the brand's market. Thus, investment in the brand can often
offset poor short-term earnings.
The research for this paper uses data from Interbrand's four rankings from
1999 through to 2002. This writer located the country of origin and region
for each brand and then constructed a database from this information. This
writer also created additional variables such as the brands' industry
segment and whether or not a brand was considered a "consumer" brand that
is largely used everyday versus an industrial brand.
Research Questions
Overall, this research will determine if globalization, defined through
global brands, is an American driven phenomenon or whether it is a force
driven by a number of countries from different regions.
The specific research questions are as follows:
RQ1: Is globalization, in terms of global brands, largely an American
phenomenon?
RQ2: What is the country composition of this phenomenon?
RQ3: Has the country composition changed over time?
Results
RQ1: Is globalization, in terms of global brands, largely an American
phenomenon?
American brands dominate the list of Interbrand's "World's Most Valuable
Brands" accounting for a full 65% of the brands on the list. In contrast,
non-US brands make-up 35% of the brands on the list. Demonstrating the
extent to which American brands dominate is the fact that the countries
with the second most brands on the list are Germany and Japan, both with
only six brands each or 6% of the total brands.
_________________
Table 1 About Here
_________________
These 65 US brands represent the pearls of the United States business brand
portfolio: brands such as Coca-Cola, Microsoft, Disney, McDonald's, Nike,
Harley Davidson, Budweiser, and an array of other premier US brands.
The dominance of American brands is further reinforced when looking just at
the top ten brands and the prominence of American brands in that
listing. Coca-Cola, Microsoft, IBM, GE, and Intel, all US brands, are the
top five brands on the list. Only two of the top ten brands are non-US
brands, Nokia from Finland and Mercedes from Germany.
Another way to look at the extent of American presence in the top 100 list
is to review brand value as determined by InterBrand. The total brand
value of the top 100 global brands is $971,618,000,000. Of that amount,
American brands represent 74% of the total brand value.
_________________
Table 2 About Here
_________________
Looking at the top ten but in terms of brand value, America dominates
again. The total brand value of the top ten global brands is
$387,850,000,000. Of that amount, the brand value of the American brands
is $336,870,000,000 or 87% of the total. Thus, the United States presence
in terms of brand value is even greater than that of the number of brands.
Not only are brands from America prominent in sheer number and value, but
also the US brands represent a very broad cross section of industries. The
Interbrand list has eighteen different industry groupings or segments, and
US brands are represented in seventeen of the eighteen. The only exception
is the "electronics" segment where the United States has no brands.
_________________
Table 3 About Here
_________________
The non-US brands are included in thirteen of the eighteen industry
segments. However, non-US brands are not represented in the following
industry segments: financial services, industrial, pharmaceutical,
technology, and travel & leisure segments. Regarding specific countries,
the countries that have brands in the next highest number of industry
segments are Germany, Japan, and France with brands in four different
industry groupings each.
RQ2: What is the country composition of this phenomenon?
Non-US brands comprise 35% of all the brands in the top 100 global brand
list. But what regions and countries define this portion of the list? Are
there regions of the globe or countries that dominate other regions or
countries? Where do the brand power bases lie outside the United States?
The composition of the non-US portion of the list includes 11 different
countries from three regions of the globe: Europe, Asia, and North
America. Europe claims the majority of non-US brands with 27 of total 35
or 77% of the non-US brands from eight different countries. There are
seven brands from two different Asian countries and one non-US brand from
North America in the top 100 global brand list. That one brand is Barcardi
from Bermuda. Clearly, Europe and more specifically, western Europe is the
power base region for global brands behind the United States.
_________________
Table 4 About Here
________________
Regarding brands per country, the list is led by Germany and Japan with six
brands each. Six brands are 17% of the total non-US brands, thus combined,
Germany and Japan have just over a third of the non-US brands on the
list. Britain and France have five brands each, or 14% each, followed by
Italy and Switzerland, both with three brands in the list. There are two
brands from both Sweden and the Netherlands and one brand each from
Bermuda, Finland, and South Korea.
_________________
Table 5 About Here
________________
Regarding brand value, even though Germany and Japan have 34% of the number
of non-US brands, the brand value of those brands represents an even larger
share of the non-US brand value. Together, the brand value of the brands
from Germany and Japan is 49%, approximately half of the total non-US brand
value.
_________________
Table 6 About Here
_______________
RQ3: Has the country composition changed over time?
There are inherent limitations in showing change from just four years ago,
but it can at least show some directional movement. So, the question
becomes have brands from the United States always dominated the top 100
global brand list? Have changes occurred in the composition of the list
since the list's début in 1999? There have been four top 100 global brand
lists issued since 1999 and the question is whether or not the US brands
maintained their lead during those years.
Looking at total number of brands in the list, from 1999 to 2002, the
United States increased from 61 to 65 brands, a percentage increase of 7%
over the four years.
The non-US brands decreased 10% from 39 total brands in 1999 to 35 in 2002.
_________________
Table 7 About Here
________________
However, in terms of brand value, the brands from the United States
remained flat versus 1999. And in a dramatic contrast, the brand value of
the non-US brands increased 10%. So, even though the number of non-US
brands decreased, the value of the remaining brands grew enough to
overcompensate for the loss in number.
_______________
Table 8 About Here
_______________
The composition of countries in the non-US segment is largely consistent
from 1999 to 2002. There are a few exceptions. In 1999, both Ireland and
Denmark had brands in the top 100 list, Guinness and Carlsberg beers
respectively, but not in the 2002 list. Also, there were changes in the
number of brands for the following countries: The Financial Times from
Britain fell out of the 1999 list leaving Britain with five brands in
2002. Germany lost two brands, Merck and Siemens. And Sweden's Absoltu
brand also dropped out of the list in 2002.
The only country other than the United States that increased its number of
brands during the four year period is France which added two additional
brands, Danone and L'Oreal, in 2002 for an increase of 67% over 1999.
_________________
Table 9 About Here
_______________
In dramatic contrast to the decline in number of brands for most
countries, many of the non-US countries increased the total brand value of
their brands. Most notably is France with its brand value increasing
129%. Other big gainers during the four-year period include South Korea
increasing at 59%, Sweden at 37%, and Finland at 49%. Only three
countries' brand portfolios decreased in brand value, and those countries
are Britain (3%), Germany (5%), and the Netherlands (9%).
__________________
Table 10 About Here
________________
Discussion
The following are the key discussion points from the results:
(1) In terms of global brands, America is the clear driver of
globalization. Based on Interbrand's survey of the top 100 global brands,
America's presence is nothing less than dominant. And this leadership
position is held both in terms of number of brands in the list and the
total brand value of all the US brands. No other country even begins to
approach the position America holds, 65% of the total number of brands, on
the list of the top global brands. As referenced earlier, both Germany and
Japan follow America in a very distant second place in number of brands
with 6% each. Regarding band value, the gap is even wider with Germany and
Japan.
Clearly, within the bounds of this particular study, globalization is an
American phenomenon.
Not only that, but based on the findings of this research, globalization
certainly can be considered a western movement. Asian brands only comprise
7%of the total number of brands. Thus, the critics of globalization can
find comfort that their assertion that globalization is a product of the
west is largely true, at least according to this study.
(2) However, at least directionally, the US brands are not maintaining
their large lead in total brand value. Granted, the brands from the United
States have 74% of the total brand value in the 2002 list. But, the
figures show that growth has been flat over the past four years with US
brands not exhibiting any increase in total brand value. Yet, the non-US
brands increased 10% in brand value since 1999.
(3) Despite the flat growth of US brands in brand value, the United States
remains in a strong position to continue its dominance in the list. The
survey revealed that there were eighteen different industry segments
represented. The United States had at least one brand in each of the
segments with the exception of electronics. Thus, the United States'
position on the list is solid even if several industries begin to decline
for some larger economic reason.
Further, looking at the high growth industries, the United States has an
even stronger dominant position. Industries connected with the knowledge
economy and information technology are thoroughly dominated by brands from
the United States. These industries are business services, financial
services, media, software, technology, and telecoms. Of these industry
segments, there are 32 total brands, and the United States has 27 brands or
84% of the total. Thus, the United States is dominating the industries
expected to experience the highest growth rates in the new millennium, and
it can be expected that US brands will therefore continue to make a strong
showing in the top global brands list.
(4) The wide range of countries with brands in the survey show that many
countries are taking advantage of the benefits of a global capitalist
system and relatively open markets. This fact counters some critics that
open markets and free trade only benefit the largest countries. The
figures reveal that a number of countries have brands that cross borders.
Perhaps the surprising figure is that Asian countries are not more
prominent in the list. However, the list depends on data presented
publicly, and Asian businesses are historically protective of their data
with a legacy of being slightly less than transparent and honest with their
business figures. Without that open and transparent presentation of data,
many Asian brands might not be included in the survey.
(5) It must be recognized that the Interbrand list of the "World's Most
Valuable Brands" has a built in bias toward the US brands. Brands from the
United States have a gigantic home market thus giving these brands an
enormous advantage over brands from other countries. The Interbrand
criteria only require that at least 20% of sales come from outside the home
country. This means that a brand that has sales that are primarily based
in the United States and has a minimal overseas presence, 20% at least, is
included in the list. Is this truly a global brand? Granted, Interbrand
requires that the brand do business in the "major global markets," but it
just seems that 20% is too low a standard for "global brand" status. When
thinking about European brands, their home markets are merely a slice of
the giant United States market in comparison. Is that fair?
Of course, in the future, as both China and the European Union develop
further, it is easy to envision a list of top global brands with a very
different composition. In fact, how might United States companies respond
when the 1.2 to 1.3 billion population of the Chinese market begin to
support their local brands? Do we see a top global brands list featuring a
majority of Chinese brands?
It should be noted that requests were made to Interbrand for data that
subtracted the US brands' figures for the American market. This would show
the true presence of American brands overseas thus being a better indicator
of America's role in globalization. This request was
refused. Interbrand's data is mostly proprietary and therefore not
obtainable unless the requesting party is an Interbrand client.
(6) The published list from Interbrand reveals an additional reason why
many perceive brands from the United States as being the primary driver of
globalization. Among "consumer" or "everyday usage" brands, the United
States again dominates. It is only logical that if consumers use or are
exposed to American brands on a fairly frequent basis, then those consumers
would be more likely to perceive a domineering United States
presence. Looking at the brands that consumers are most likely to interact
with during an average day, the United States again has a very strong
presence. These industry segments would be food & beverage, leisure goods,
media, personal care, and retail. Of the 38 total brands in these
segments, the United States accounts for 76% of them.
Conclusions
Of course, it is all too convenient to measure globalization by just the
value of a nation's brands. Many other factors are obviously at work, but
global brands are a unique and creative way to gauge the steady and
stealthy encroachment of globalization. Citizens in various countries
probably perceive the impact or presence of global brands to be much
stronger than it is. An invasion of global products on the local
community's shelves or the addition of another Starbucks or McDonald's on
the corner can have quite an impact on perception. Just ask the French
about their McDonald's experiences. How about the omnipresent Japanese
electronic neon boards perched atop many building in the capitals and
business centers of the world's most prominent cities? Perception is a
powerful and emotional tool, often superseding reason and logic. To be
able to incorporate perception into a study of global brands and
globalization would be quite revealing.
But clearly, in order to truly gauge the presence of global brands in
various countries, a redefinition of global brands must be
developed. While Interbrand's definition is widely accepted by many
accounting firms, management consultancies, advertising agencies, and
others from around the globe, there is no denying that Interbrand's
definition of "global brand" is a bit narrow. Can a brand really be
considered "global" when it only has to garner 20% of sales from overseas
markets? Is this really global? Plus, the large home market advantage for
US brands automatically allows for inclusion of some brands that have a
minimal presence overseas to be included in the list.
Thus, to gain a better understanding of the US brands' presence, future
research should attempt to eliminate the American home market
advantage. Unfortunately, Interbrand's list is the only one of its kind
and the only one so widely accepted.
Another thought for future research would be to measure how global brands
are crowding out local brands in local markets. This sort of approach
would indicate a real effect of globalization on a local country or
region. The loss of jobs and the loss of emerging capital from the impact
of global brands would demonstrate the real world consequences of
globalization. But aside from the direct losses, there is also a loss of
local pride and a loss of local heritage when a local brand is squeezed out
or simply purchased by a large multinational.
So, in conclusion, is the exercise of creating and analyzing such a list as
the "World's Most Valuable Brands" a futile exercise in simpleminded
scorekeeping? Is there really any value in this? Perhaps there is a very
good reason. There is a movement that has begun which is promoting the
idea that intangibles such as brands and other intellectual property should
be assigned dollar values for recording as assets on company balance
sheets. This would give potential investors a sharper look at the
company's future prospects, and it would also add billions of dollars to
the balance sheets of global companies giving these companies further
leverage with which to extend their brands across borders (Alston, 2002).
The idea is gaining broad support among the business community for a number
of reasons but particularly when one considers that these intangible
properties are what drive growth in a knowledge and information
economy. Baruch Lev, a New York University professor estimates that
companies pour in approximately $1 trillion annually in
intangibles. Further, he estimates that intangibles could make-up over
half of the market value of public companies (Alston, 2002).
Of course, there is a substantial risk in estimating the value of
intangibles. Companies are well aware of the consequences for harsh
investor reaction toward inaccurate measurements of intangibles or a sudden
write down of such assets. Investors would either flee the stock or bring
suit against the company or both.
However, there is increased acceptance of such a move in the accounting and
business communities. In fact, approximately twelve nations already allow
companies to designate brands as assets on the balance sheet. Two of these
countries are Britain and France. Can the United States be far behind?
References
Aaker, D. A. (1991) . Managing brand equity: Capitalizing on the value of
a brand name. New York: The Free Press.
Aaker, D. A. (1996) . Building strong brands. New York: The Free Press.
Aaker, D. A., Stayman. D.M., & Hagerty, M.R. (!986) . Warmth in
advertising: Measurement, impact, and sequence effects. Journal of
Consumer Research, 12(4), 365-381.
Aaker, J.L. (1997) . Dimensions of brand personality. Journal of
Marketing Research, 34(3), 347-357.
Alston, A. (2002, August 26) . Brainpower on the balance
sheet. BusinessWeek [Online] . Available:
http://www.businessweek.com/magazine/content/02_34/b3796624.htm.
Batra, R., Lehmann, D.R., & Singh, D. (1992). The brand personality
component of brand goodwill. Brand Equity & Advertising, 83-96.
Blackston, Max. (1992) . Beyond brand personality: Building brand
personality. Brand Equity & Advertising, 113-124.
Braunstein, M., & Levine E. (2000) . Deep branding on the
internet. Roseville, California: Prima Venture.
Durgee, J. (1988) . Understanding brand personality. Journal of Consumer
Marketing, 5(3), 21-25.
Friedman, T.L. (1999) . The Lexus and the olive branch. New York:
Farrar, Straus and Giroux.
Entman, R. M. (1993). Framing: Toward clarification of a fractured
paradigm. Journal of Communication, 43 (4), 51-58.
Fiske, J., & Taylor, S.E. (1991). Social cognition. New York: McGraw-Hill.
Kahneman, D. & Tversky, A. (1984). Choice, values, and frames. American
Psychologist, 39, 341-350.
Kapferer, J. N. (1992) . Strategic brand management: new approaches to
creating and evaluating brand equity. New York: The Free Press.
Keaten, J. (2002) . French farmer Jose Bové leads new McDonald's
protest. Common Dreams News Center. [On-line] . Available:
http://www.commondreams.org/headlines01/0813-01.htm
Keller, K.L. (1993) . Conceptualizing, measuring and managing customer
brand equity. Journal of Marketing, 57(1), 1-22.
Keller, K. L. (1998) . Strategic brand management: Building, measuring,
and managing brand equity. Saddle River, NJ: Prentice Hall.
Keller, K.L. (2000) . The Brand report card. Harvard Business Review,
78(1), 147-158.
Klein, N. (2000) . No logo. New York: Picador.
Khermouch, G. (2002, August 5) . The best global brands. BusinessWeek
[Online] . Available:
http://www.businessweek.com/magazine/content/02_31/b3794032.htm.
Ries, A., & Ries, L. (2000) . The 11 immutable laws of internet
branding. New York: HarperBusiness.
Ries, A. & Trout, J. (1981) . Positioning: The battle for your mind. New
York: Warner Books.
Sniderman, P.M., Brody, R.A., & Tetlock, P.A. (1991). Reasoning and
choice: Explorations in political psychology. Cambridge, England:
Cambridge University Press.
Stiglitz, J. (2002) . Globalization and its discontents. New York: W.W.
Norton & Co.
Winkler, A. (1999) . Warp speed branding: The impact of technology on
marketing. New York: John Wiley & Sons.
Table 1
Top 100 Global Brands - 2002
________________________________________________________________________
Rank Brand Country
1 Coca-Cola US
2 Microsoft US
3 IBM US
4 GE US
5 Intel US
6 Nokia Finland
7 Disney US
8 McDonald's US
9 Marlboro US
10 Mercedes Germany
-------------------------
11 Ford US
12 Toyota Japan
13 Citibank US
14 Hewlett-Packard US
15 American Express US
16 Cisco US
17 AT&T US
18 Honda Japan
19 Gillette US
20 BMW Germany
21 Sony Japan
22 Nescafe Switzerland
23 Oracle US
24 Budweiser US
25 Merrill Lynch US
26 Morgan Stanley US
27 Compaq US
28 Pfizer US
29 JP Morgan US
30 Kodak US
31 Dell US
32 Nintendo Japan
33 Merck US
34 Samsung South Korea
35 Nike US
36 Gap US
37 Heinz US
38 Volkswagen Germany
39 Goldman Sachs US
40 Kellogg's US
41 Louis Vuitton France
42 Sap Germany
43 Canon Japan
44 IKEA Sweden
45 Pepsi US
46 Harley Davidson US
47 MTV US
48 Pizza Hut US
49 KFC US
50 Apple US
51 Xerox US
52 Gucci Italy
53 Accenture US
54 L'Oreal France
55 Kleenex US
56 Sun US
57 Wrigley's US
58 Reuters Britain
59 Colgate US
60 Philips Netherlands
61 Nestle Switzerland
62 Avon US
63 AOL US
64 Chanel France
65 Kraft US
66 Danone France
67 Yahoo! US
68 adidas Germany
69 Rolex Switzerland
70 Time US
71 Ericsson Sweden
72 Tiffany US
73 Levi's US
74 Motorola US
75 Duracell US
76 BP Britain
77 Hertz US
78 Bacardi Bermuda
79 Caterpillar US
80 Amazon.com US
81 Panasonic Japan
82 Boeing US
83 Shell Britain
84 Smirnoff Britain
85 Johnson & Johnson US
86 Prada Italy
87 Moet & Chandon France
88 Heineken Netherlands
89 Mobil US
90 Burger King US
91 Nivea Germany
92 Wall Street Journal US
93 Starbucks US
94 Barbie US
95 Polo Ralph Lauren US
96 FedEx US
97 Johnnie Walker Britain
98 Jack Daniels US
99 3M US
100 Armani Italy
Total Number of US Brands - 65
Total Number of Non-US Brands - 35
________________________________
Total Number of US Brands in Top Ten – 8
Total Number of Non-US Brands in Top Ten - 2
______________________________________________________________________________
Table 2
Top 100 Global Brands – Brand Value - 2002
________________________________________________________________________
Brand Value
Rank Brand Country ($Mil)
1 Coca-Cola US 69,637
2 Microsoft US 64,091
3 IBM US 51,188
4 GE US 41,311
5 Intel US 30,861
6 Nokia Finland 29,970
7 Disney US 29,256
8 McDonald's US 26,375
9 Marlboro US 24,151
10 Mercedes Germany 21,010
-------------------------
11 Ford US 20,403
12 Toyota Japan 19,448
13 Citibank US 18,066
14 Hewlett-Packard US 16,776
15 American Express US 16,287
16 Cisco US 16,222
17 AT&T US 16,059
18 Honda Japan 15,064
19 Gillette US 14,959
20 BMW Germany 14,425
21 Sony Japan 13,899
22 Nescafe Switzerland 12,843
23 Oracle US 11,510
24 Budweiser US 11,349
25 Merrill Lynch US 11,230
26 Morgan Stanley US 11,205
27 Compaq US 9,803
28 Pfizer US 9,770
29 JP Morgan US 9,693
30 Kodak US 9,671
31 Dell US 9,237
32 Nintendo Japan 9,219
33 Merck US 9,138
34 Samsung South Korea 8,310
35 Nike US 7,724
36 Gap US 7,406
37 Heinz US 7,347
38 Volkswagen Germany 7,209
39 Goldman Sachs US 7,194
40 Kellogg's US 7,191
41 Louis Vuitton France 7,054
42 Sap Germany 6,775
43 Canon Japan 6,721
44 IKEA Sweden 6,545
45 Pepsi US 6,394
46 Harley Davidson US 6,266
47 MTV US 6,078
48 Pizza Hut US 6,046
49 KFC US 5,346
50 Apple US 5,316
51 Xerox US 5,308
52 Gucci Italy 5,304
53 Accenture US 5,182
54 L'Oreal France 5,079
55 Kleenex US 5, 039
56 Sun US 4,773
57 Wrigley's US 4,747
58 Reuters Britain 4,611
59 Colgate US 4,602
60 Philips Netherlands 4,561
61 Nestle Switzerland 4,430
62 Avon US 4,399
63 AOL US 4,326
64 Chanel France 4,272
65 Kraft US 4,079
66 Danone France 4,054
67 Yahoo! US 3,855
68 adidas Germany 3,690
69 Rolex Switzerland 3,686
70 Time US 3,682
71 Ericsson Sweden 3,589
72 Tiffany US 3,482
73 Levi's US 3,454
74 Motorola US 3,416
75 Duracell US 3,409
76 BP Britain 3,390
77 Hertz US 3,362
78 Bacardi Bermuda 3,341
79 Caterpillar US 3,218
80 Amazon.com US 3,175
81 Panasonic Japan 3,141
82 Boeing US 2,973
83 Shell Britain 2,810
84 Smirnoff Britain 2,723
85 Johnson & Johnson US 2,509
86 Prada Italy 2,489
87 Moet & Chandon France 2,445
88 Heineken Netherlands 2,396
89 Mobil US 2,358
90 Burger King US 2,163
91 Nivea Germany 2,059
92 Wall Street Journal US 1,961
93 Starbucks US 1,961
94 Barbie US 1,937
95 Polo Ralph Lauren US 1,928
96 FedEx US 1,919
97 Johnnie Walker Britain 1,654
98 Jack Daniels US 1,580
99 3M US 1,579
100 Armani Italy 1,509
$971,618
Total Brand Value of Top 100 Global Brands - $971,618
Total Brand Value of American Brands - $721,893 (74%)
Total Brand Value of Non-US Brands - $249,725 (26%)
_______________________________________________
Total Brand Value of Top Ten Global Brands - $387,850
Total Brand Value of American Brands - $336,870 (87%)
Total Brand Value of Non-US Brands - $50,980 (13%)
______________________________________________________________________________________
Table 3
Number of Brands per Industry Segment – US Brands versus Non-US Brands - 2002
________________________________________________________________________
Business Segment Number of US Brands Number of Non-US Brands
Alcohol 2 5
Automotive 2 5
Business Services 3 1
Electronics --- 4
Financial Services 6 ---
Food & Beverage 6 3
Industrial 4 ---
Leisure Goods 6 2
Luxury 2 6
Media 6 1
Oil 1 2
Personal Care 5 2
Pharmaceutical 2 ---
Retail 6 1
Software 3 1
Technology 7 ---
Telecoms 2 2
Travel & Leisure 2 ---
Total 65 35
________________________________________________________________________
Table 4
Region Composition of Non-US Brands - 2002
________________________________________________________________________
Region Number of Brands % of Non-US Brands % of Total Brands
Europe 27 77% 27%
Asia 7 20% 7%
North America 1 3% 1%
Total 35 100%
________________________________________________________________________
Table 5
Country Composition of Non-US Brands - 2002
________________________________________________________________________
Country Number of Brands % of Non-US Brands % of Total Brands
Bermuda 1 3% 1%
Britain 5 14% 5%
Finland 1 3% 1%
France 5 14% 5%
Netherlands 2 6% 2%
Germany 6 17% 6%
Italy 3 9% 3%
Japan 6 17% 6%
South Korea 1 3% 1%
Sweden 2 6% 2%
Switzerland 3 9% 3%
Total 35 100% 35%
________________________________________________________________________
Table 6
Top Non-US Global Brands – Brand Value by Country - 2002
________________________________________________________________________
Brand Value % Brand Value % Brand Value
Country ($ Mil) Non-US Brands All Brands
Bermuda 3,341 1% ---
Britain 15,188 6% 2%
Finland 29,970 12% 3%
France 22,904 9% 2%
Netherlands 6,957 3% 1%
Germany 55,168 22% 6%
Italy 9,302 4% 1%
Japan 67,492 27% 7%
South Korea 8,310 3% 1%
Sweden 10,134 4% 1%
Switzerland 20,959 9% 2%
Total $249,725 100% 26%
Total Brand Value of Non-US Brands - $249,725 (26%)
________________________________________________________________________
Table 7
Change in Number of US and Non-US Global Brands – 1999 to 2002
_____________________________________________________________________________
1999 2002 % Change
US Brands 61 65 7%
Non-US Brands 39 35 (10%)
Total 100 100
______________________________________________________________________________
Table 8
Change in Brand Value of US and Non-US Global Brands – 1999 to 2002
_____________________________________________________________________________
1999 (%) 2002 (%) % Change
($Mil) ($Mil)
US Brands 719,516 (76%) 721,893 (74%) ----
Non-US Brands 226,671 (24%) 249,725 (26%) 10%
Total $946,187 (100%) $971,618
______________________________________________________________________________________
Table 9
Change in Number of Brands per Country – 1999 to 2002
____________________________________________________________________________
1999 2002
Country Number of Brands Number of Brands % Change
Bermuda 1 1 ----
Britain 6 5 (17%)
Denmark 1 0 (100%)
Finland 1 1 ----
France 3 5 67%
Ireland 1 0 (100%)
Netherlands 2 2 ----
Germany 8 6 (25%)
Italy 3 3 ----
Japan 6 6 ----
South Korea 1 1 ----
Sweden 3 2 (33%)
Switzerland 3 3 ----
Totals 39 35 (10%)
______________________________________________________________________________________
Table 10
Change in Brand Value per Country – 1999 to 2002
_____________________________________________________________________________
1999 Brand Value 2002 Brand Value
Country ($Mil) ($Mil) % Change
Bermuda 2,895 3,341 15%
Britain 15,639 15,188 (3%)
Denmark 1,075 ---- --
Finland 20,694 29,970 49%
France 10,023 22,904 129%
Netherlands 7,666 6,957 (9%)
Germany 57,880 55,168 (5%)
Ireland 1,262 ---- --
Italy 7,614 9,302 22%
Japan 57,416 67,492 18%
South Korea 5,223 8,310 59%
Sweden 22,176 10,134 37%
Switzerland 17,108 21,959 28%
$226,671 $249,725 10%
______________________________________________________________________________________
|
