Doors Floors and More

Cited: Forbes

Apple’s brand will need more than a problem with the antenna reception of the iPhone 4 to bring it down. This is a company that has faced setbacks before and bounced back to become the world’s most valuable brand–worth $57.4 billion, according to Forbes. In a list dominated by tech brands–they made up 30% of the top 50 ranked by Forbes– squeaked by longtime nemesis , worth $56.6 billion, and , which came in fifth on the list with a brand value of $39.7 billion. Steve Jobs’ creation is among a number of resilient brands, including corporate ones, that have thrived despite business troubles or setbacks.

Apple shows just how a brand can survive and thrive even when a parent company stumbles. Apple’s sales in the late 1990s plummeted 46% over a four-year stretch while the company lost money seven times over eight quarters. The stock was trading for less than $4 (split-adjusted) in 1997 before company cofounder Steve Jobs, who had been ousted, rejoined Apple.

In Pictures: The World’s Most Valuable Brands

The following year Apple released the iMac, the first in a string of monster hits over a dozen years. Sales over the past 12 months hit $57 billion, and net income was $12 billion. The stock is up 60-fold since 1997.

To identify the world’s most valuable brands we looked at more than 100 with leadership positions in their respective industries. Forbes evaluated these brands along with Jeffrey Parkhurst, managing director of business strategy at Mindshare, a -owned media agency. We required that brands have at least some presence in the United States, because if a brand is to be considered global, it needs to be a player in the United States.

Our first step was to determine earnings before interest and taxes for each brand. Forbes averaged those earnings over the past three years and subtracted from earnings a charge of 8% of the brand’s capital employed, figuring a generic brand should be able to earn at least 8% on this capital.

Forbes applied the maximum corporate tax rate in the parent company’s home country to that net earnings figure. Next, we allocated a percentage of those earnings to the brand based on the role brands play in each industry. (Brands are crucial when it comes to beverages and luxury goods, but not so much, say, with airlines, when price and convenience are more important.) To this net brand earning number, we applied the average price-to-earnings multiple over the past three years to arrive at the final brand value. For privately held outfits we applied an earnings multiple for a comparable public company.

Tech brands made a big showing on this with 30% of the top 50 brands, including four of the first five places in the rankings. Financial service brands and food and beverage brands each captured six spots. U.S. brands dominated the list.

Most large economies saw output decline in 2009, with the E.U., Japan and U.K. all falling at least 4% (the U.S. economy contracted 2.4%). The brands on our list fared a little better, with sales, on average, flat in 2009. Some brands were hit hard by the economic downturn as well as their own missteps.

Take for example No. 11-ranked . The brand is worth $24.1 billion, but has been troubled over the past year with multiple recalls that affected a total of 10 million vehicles. Toyota’s perceived quality score fell 20% in a survey this spring from Santa Barbara, Calif.-based ALG, which is the industry benchmark for residual values and depreciation data. “Toyota always promoted quality, and then [the recalls showed] they delivered exactly the opposite,” says Mindshare’s Parkhurst, who argues the fallout would not have been as bad if Toyota’s brand promise all these years had to do with, say, horsepower.

Continued in “Some Brands Never Die Part 2“

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My Take: To me, a brand-new name only means more money. The more famous he brand is, the more it costs! These guys use things like promotional products to get their name and logo into the minds of consumers. They will use all kinds of things like advertising bags and even corporate gifts to improve their “brand”. They will have thousands of imprinted pens made just to hand out to consumers when they go shopping and they may even give out personalized shopping bags.

I have even seen big companies like this get out a concert tickets just for coming to a showing of their product. In some areas they might actually be sports tickets or even theater tickets just to get people thinking about their brand name and logo.

These are the companies that are also afraid of the California Lemon Law. This is a law that holds them responsible for their product if it is faulty and/or causes injury to the consumer who purchased it. They do not want to hear from CA lemon law lawyers because it means it will cost them a lot of money to make them go away.

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