See me after class: Apple scores AAA rating from brand-botherer Apple has been named the world's most valuable brand for the third time in a row, with No 2 Samsung narrowing the gap slightly but still trailing behind. According to Brand Finance's Global 500 list, Apple's brand value in 2014 is $104bn, up 20 per cent from $87bn in 2013. Samsung, meanwhile, was judged to be worth $79bn, up …
According to Brand Finance's Global 500 list, Apple's brand value in 2014 is $104bn, up 20 per cent from $87bn in 2013. Samsung, meanwhile, was judged to be worth $79bn, up from just $20bn last year.
But what is a brand value? Does the above mean that if I wanted to buy "Apple" off Apple, USD 79'000'000'000 would be regarded as a "fair price"?
No, $79bn would be a fair price for Samsung's brand value. $104bn for Apple.
Brand value is the intangible bit that makes people pay more for your products or services than they would for an unbranded or unknown equivalent, it's entirely based on perception.
For example, it's the reason why Ford were able to sell the Mk IV Fiesta at a higher price than the Mazda 121, even through they were the same car made in the same factory, just with different badges.
No, it isn't rent seeking.
Brand value is the equivalent of the added value from hallmarking. It measures the extent to which I can buy a product from a named company sight unseen and expect to find it satisfactory. (Of course, companies may spend huge amounts of marketing money on trying to influence perception. There was a mantra of marketing departments in the 1990s that "everything is perception", which was true but, as some of them found out, didn't address what "perception" really means.)
Tedious, geeky people like myself, when wanting to buy an expensive object, will do lots of work to find out what most closely meets their requirements, what other people have thought of it, and so on. Then they will spend money. People with lives who want a new laptop or phone short circuit the process and just buy Apple. They expect the product to be good enough even if, as is often the case, it never really does very much for them. However, the report suggests that these same people are now almost as likely to apply the same process and buy Samsung.
There is nothing rent-seeking about a brand name so long as it is not diluted by being sold or misapplied (for instance the Mini Countryman is not a Mini, I believe, it's made on a completely different platform in Austria. And then there's Caterpillar, a company for which I used to have huge respect, licensing its name to boots.) So far neither Apple nor Samsung has done this.
Are these the same kind of ratings companies that were giving Greece a good credit rating just months before they defaulted on their debt, and the USA triple-A despite being just days away from defaulting during their mad few weeks of government stalemate?
All looks like 'finger in the air' type figures to me.
@Tom 38: "Are these the same kind of ratings companies that were giving Greece a good credit rating just months before they defaulted on their debt"
It’s the Neocolonial Private Power Domination Model, stupid! ..
Hey, that's a wonderful article. It references the Falklands War without ever mentioning that the outcome of the war was the collapse of a very nasty little dictatorship. It was a great tragedy that the Belgrano was sunk and so many people died over a tinpot dispute, but the outcome, getting rid of Galtieri, was hardly a disaster and may have saved more lives.
I'm going to speculate that the author of the piece isn't a social democrat.
Great way to create a thin veneer of some kind of established and credible* ratings agency by copying the rating system used by actual established ratings agencies that have been around for over 100 years.
Never mind the fact that these multiple A's and +/-'s exist purely to maintain a veneer itself that certain governments and conglomerates are still in the 'A' club and not create panic.
Just where do they get their $ values from anyway? If a company is graded by the stock and valued by the value of the stock, where does this other $ value fit in that they've come up with?
I suppose it could represent the marginal value of the premium Apple or Samsung get to charge on top of what their underlying product is actually worth, based on brand - but how does that calculate to company value, and not unit value instead? Since I assume they don't have access to current gross profit for sales of products from Apple et al.
I think it's bullshit, that's what. I think it's a bunch of marketing and finance execs looking to get in on the speculation game and coming up with another metric to judge companies by.
*'credible' in this context is a fluid term that just so happens to mean whatever a credit ratings agency wants to define it as. Such as ratings agencies who might have significant interests in rating junk mortgage-backed securities as triple A.
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