A brand is worth...
Cans of Coca-Cola
TEXT OF INTERVIEW
Doug Krizner: Good branding can make the difference in whether a company sinks or swims. Think Coke. It's the top brand on a list put together by BusinessWeek and the consultant Interbrand. Burt Helm is a reporter at BusinessWeek. He helped write the feature on the best global brands. Burt, how is the brand measured in value?
Burt Helm: What we're able to do working with Interbrand is they look at the brand as if it were a financial asset on the balance sheet based on how much the brand can earn going forward. So to do that, you look at the profit projections, the revenue projections of whatever company that is, how much of that is actually driven by the brand. So basically how much of a price premium they are able to get versus if it were just a no-name product.
Krizner: Who are some of the companies that have the biggest branding problems right now?
Helm: Well we always look at the biggest winners and the biggest losers, and Motorola who had a great year last year with the Razr and they just couldn't replicate it. Now there are also brands that have just, almost every single year we've done this ranking have had problems, that's Ford, Gap, Kodak. Apple the brand is growing very, very fast but Microsoft is actually, in terms of the earnings that the Microsoft brand will create, is much, much bigger.
Krizner: What about turnaround stories?
Helm: There are companies like Burberry. What Burberry managed to do was go back to its roots in a way that got away from the Burberry plaid but stuck with the very British refinement and slowly rebuilt their cachet and we saw that reflected in the ranking this year.
Krizner: So who takes the credit in the end for good branding? Is it all Madison Avenue?
Helm: (Laughs) You know I think Madison Avenue would want to take credit. At the beginning it's definitely. . . it's product and it's what you're selling. For instance another great comeback story is Nintendo which had the Nintendo Wii. Now it just could not have rebuilt itself from being the third place video game console versus Microsoft and Sony without this amazing product that just does all these really cool, innovative things. But then they did very savvy advertising, they did very savvy PR to show people that it was not just another video game console and so it's really the combination of those two things.
Krizner: Burt Helm is a reporter with BusinessWeek. Hey Burt, thanks so much for talking with us.
Helm: My pleasure.