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Tuesday, February 18, 2014

Ferrari, the World's Most Powerful Brand



Ferrari – The World’s Most Powerful Brand

 
The Brand Finance Global 500, released today, is an annual study conducted by leading brand valuation consultancy Brand Finance. The world’s biggest brands are put to the test and evaluated to determine which are the most powerful and most valuable.

Ferrari is the world’s most powerful brand. The legendary Italian carmaker scores highly on a wide variety of measures on Brand Finance’s Brand Strength Index, from desirability, loyalty and consumer sentiment to visual identity, online presence and employee satisfaction. Ferrari is one of only eleven brands (including Google, Hermès, Coca-Cola, Disney, Rolex and F1 racing rivals Red Bull) to be awarded an AAA+ brand rating and has the highest overall score.

Brand Finance Chief Executive David Haigh stated, “The prancing horse on a yellow badge is instantly recognizable the world over, even where paved roads have yet to reach. In its home country and among its many admirers worldwide Ferrari inspires more than just brand loyalty, more of a cultish, even quasi-religious devotion, its brand power is indisputable.”
 
 
Though Ferrari is the world’s most powerful brand, being a niche, luxury brand with an officially capped production, it is perhaps unsurprising that it is some way off being the world’s most valuable. Its US$4 billion brand value puts it 350th in brand value terms. David Haigh continues, “Apple also has a powerful brand, rated AAA by Brand Finance. However what sets it apart is its ability to monetize that brand. For example, though tablets were in use before the iPad, it was the application of the Apple brand to the concept that captured the public imagination and allowed it to take off as a commercial reality.” This is just one of the factors responsible for its US$105 billion brand value; Apple is the world’s most valuable brand for the third year in a row.
 
Samsung Closing In On Apple’s Brand Value Crown

Apple’s dominance is being challenged by Samsung however. The Korean giant’s improving reputation for reliability, a faster pace of innovation and wider range of devices are among many factors that have seen its brand value increase by US$20 billion to US$79 billion this year. Other tech successes include Netflix, which has nearly doubled its brand value to appear in the Brand Finance Global 500 for the first time. Its value has grown 93% in a year to US$3.2 billion, to make Netflix the 468th most valuable brand. Still operating only in the Americas, Scandinavia and the British Isles, there is huge potential for further growth. Facebook meanwhile has recovered from its problematic IPO, which saw its reputation suffer and its brand value plunge in 2013. This year it has rebounded, adding 76% to its brand value to bring the total to US$9.8 billion, putting it 122nd. Investor confidence in its long term prospects has returned as revenues from mobile advertising have grown.

Tech brands in general have tightened their grip on the Brand Finance Global 500. Walmart is the only non-tech brand remaining in the top 10. Once the world’s most valuable brand, it now sits in 9th having been overtaken by Amazon. The usurpation of the world’s biggest retail brand by the biggest online retailer represents yet another coup for tech brands over ‘real-world’ businesses.
 

The World’s Most Valuable Brands (Top 20)
 
Rank 2014 Rank 2013 Brand Country Brand Value 2014 (USD bn) Brand Rating 2014 Brand Value Change (USD bn) Brand Value Change (%) Brand Value 2013 (USD bn) Brand Rating 2013
1 1 Apple US     104.68 AAA 17.38 20%     87.30 AAA
2 2 Samsung South Korea        78.75 AAA 19.98 34%     58.77 AAA
3 3 Google US        68.62 AAA+ 16.49 32%     52.13 AAA+
4 4 Microsoft US        62.78 AAA 17.25 38%     45.53 AAA-
5 10 Verizon US        53.47 AAA- 22.74 74%     30.73 AA+
6 7 General Electric US        52.53 AA+ 15.37 41%     37.16 AA
7 11 AT&T US        45.41 AA 15.00 49%     30.41 AA+
8 8 Amazon US        45.15 AAA- 8.36 23%     36.79 AAA-
9 5 Walmart US        44.78 AA+ 2.48 6%     42.30 AA+
10 6 IBM US        41.51 AA+ 3.79 10%     37.72 AA+
11 15 Toyota Japan        34.90 AAA- 8.92 34%     25.98 AA+
12 9 Coca Cola US        33.72 AAA+ -0.48 -1%     34.20 AAA+
13 20 China Mobile Hong Kong        31.84 AA+ 8.55 37%     23.30 AA
14 n/a T Germany        30.61 AA 9.06 42%     21.54 AA+
15 14 Wells Fargo US        30.24 AAA- 4.20 16%     26.04 AA+
16 13 Vodafone UK        29.61 AAA- 2.60 10%     27.01 AAA
17 21 BMW Germany        28.96 AAA 5.73 25%     23.24 AAA
18 12 Shell Netherlands        28.57 AA+ -1.18 -4%     29.75 AAA-
19 17 Volkswagen Germany        27.06 AAA- 3.40 14%     23.67 AAA-
20 22 HSBC UK        26.87 AAA 4.01 18%     22.86 AAA-
 
Click here for the full Brand Finance Global 500
 
 
Sinking Nokia Takes Finland Down With It
 
US brands continue to dominate the Brand Finance’s list, occupying 185 brands of the 500 spots. Japan is second. Despite 7 Japanese brands having dropped out of the table, the total for the country as a whole is up thanks to brand value increases of over 30% from Japan’s three biggest brands; Toyota, Mitsubishi and Honda. President Shinzo Abe’s ‘Abenomics’ programme has begun to pay off and global demand for Japanese goods is improving. Germany, France and the UK complete the top 5. Despite China’s status as the world’s second biggest economy, it is 6th in terms of total brand value as its brands are still developing. Huawei and Baidu have both increased their brand values by over 50%. While controversial for their close associations with the Chinese government, both are likely to exert increasing influence around the world in the next few years.

Nations that have not fared so well include Finland. The country’s only brand, Nokia, has finally been squeezed out of the table after years of slow decline. Nokia has continued to hemorrhage brand value as a result of its inability to effectively counter the challenge Apple and Samsung. Falling out of the Brand Finance Global 500, it follows Blackberry, which dropped out of the top 500 last year. The BRIC nations of Russia, India and in particular Brazil have also fared relatively poorly. The number of Brazilian brands in the table is down from 9 to 5 and those that remain have all lost over 20% of their brand value. One Indian brand has dropped out of the table and several of those that remain have fallen further down the rankings. Tata, India’s flagship brand is the exception however, climbing to 34th worldwide with a brand value of US$21.1 billion.
  

Total Brand Value by Country
 
 
Country Total Brand Value 2014 (USD bn) Total Brand Value 2013 (USD bn) Brand Value Change (USD bn) Brand Value Change (%) Number of Brands in Top 500 2014 Number of Brands in Top 500 2013
United States 1,908.6 1,614.6 294.0 18% 185 185
Japan 376.7 338.7 38.0 11% 42 49
Germany 324.0 247.0 77.0 31% 32 33
France 266.0 212.5 53.4 25% 37 31
Britain 262.1 218.4 43.7 20% 35 32
China 229.0 185.3 43.7 24% 27 26
South Korea 152.0 132.8 19.2 14% 12 14
Switzerland 120.8 97.3 23.5 24% 19 19
Netherlands 112.0 93.8 18.2 19% 12 11
Spain 76.2 70.6 5.6 8% 10 10
Canada 75.4 74.0 1.3 2% 13 14
Hong Kong 69.9 41.5 28.4 68% 7 4
Italy 57.2 51.3 5.9 11% 8 8
Sweden 54.8 50.5 4.3 8% 7 8
Australia 50.3 43.9 6.4 15% 8 8
Russia 42.2 46.4 -4.2 -9% 8 8
Brazil 37.8 59.9 -22.1 -37% 5 9
India 35.7 40.6 -4.9 -12% 5 6
Norway 15.8 16.5 -0.7 -5% 3 3
Denmark 10.2 7.0 3.3 47% 3 2
Austria 9.6 3.7 5.9 160% 2 1
Malaysia 9.2 9.9 -0.7 -8% 1 2
Uae 8.9 7.3 1.7 23% 2 2
Saudi Arabia 8.0 3.3 4.7 141% 2 1
Mexico 7.8 17.8 -9.9 -56% 2 4
Chile 7.4 3.0 4.4 146% 2 1
Singapore 7.3 9.3 -2.1 -22% 2 3
South Africa 5.4 5.2 0.2 4% 1 1
Luxembourg 4.8 3.8 1.0 26% 1 1
Taiwan 3.8 3.0 0.7 25% 1 1
Thailand 3.7 2.6 1.1 44% 1 1
Portugal 3.1 2.8 0.3 11% 1 1

 
Total Brand Value by Sector
 
Sector Total Brand Value 2014 (USD bn) Total Brand Value 2013 (USD bn) Brand Value Change (USD bn) Brand Value Change (%) Number of Brands in Top 500 2014 Number of Brands in Top 500 2013
 Banks 633.1 581.4 51.8 9% 71 64
 Technology 615.8 488.7 127.0 26% 44 43
 Telecommunications 500.1 385.0 115.1 30% 47 46
 Retail 408.9 338.9 70.0 21% 50 50
 Conglomerate 313.1 257.9 55.3 21% 16 18
 Automobiles 289.7 244.1 45.7 19% 28 28
 Oil & Gas 216.0 212.9 3.1 1% 26 24
 Insurance 190.9 141.1 49.9 35% 29 27
 Media 149.1 120.6 28.5 24% 19 19
 Beverages 101.8 88.4 13.4 15% 13 12
 Utilities 94.4 86.0 8.4 10% 17 19
 Food 86.5 64.4 22.1 34% 14 15
 Cosmetics 86.1 67.5 18.5 27% 13 12
 Transportation 69.5 53.8 15.7 29% 9 13
 Engineering 59.9 51.4 8.5 17% 16 11
 Others 552.2 429.6 122.7 29% 88 99
 Global 500 4,367.1 3,611.6 755.6   500 500
 

Note to Editors

 
2014 brand values are calculated in USD with a valuation date of 1/1/14 and 2013 values as at 1/1/13. For conversion to alternative currencies, 2014 brand values should be converted as per the exchange rate at 1/1/14 and 2013 brand values as per the exchange rate 1/1/13. Percentage brand value changes should be recalculated following currency conversion.

About Brand Finance
 
Brand Finance is the world’s leading brand valuation consultancy, with offices in over 15 countries. We provide clarity to marketers, brand owners and investors by quantifying the financial value of brands. Drawing on expertise in strategy, branding, market research, visual identity, finance, tax and intellectual property, Brand Finance helps clients make the right decisions to maximise brand and business value.

ISO Compliance
 
Brand Finance was one of the first companies in the world to be accredited to provide ISO 10668 compliant brand valuations. The ISO 10668 global standard provides a consistent, reliable approach to brand valuation that emphasises transparency and objectivity. Valuers must take all relevant financial, behavioural and legal information into consideration. Brand Finance would like to thank its partners, The Banker, Havas, BAV Consulting, Alexa, Bloomberg, Meltwater, VI360, CSR Hub and Novagraaf for the information they have provided to make our valuations of the world’s top brands ISO 10668 compliant.

Explanation of Brand Finance’s Methodology
 
Brands are probably the most valuable assets that companies own, driving demand and building relationships with customers and partners. Brand Finance calculates brand value by determining the royalties a corporation would have to pay to license its brand if it did not own it, known as the ‘royalty relief’ method. As well as a brand value, each of the 500 brands in the table is accorded a brand rating; a benchmark of the strength, risk and potential of a brand relative to its competitors, expressed as a letter code from AAA+ to D, similar to a credit rating. A detailed methodology of how the brand values are calculated can be found here and the results from last year’s study here. The 2014 results are embargoed until 10.30 AM GMT on Tuesday February 18th.



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