Magazine

Branding: It's All in the Eye of the Beholder


Brand recognition is one thing; brand value another ("The best global brands," Cover Story, Aug. 6). You recognize the Financial Times from its salmon-colored paper, but would you buy FT cookbooks? If IBM launches an MP3 player, it can command a premium, because of its brand value. But would the Coca-Cola brand be good at selling coffee, MP3 players, ice cream, or tennis shoes? Is it really the value of the brand that prompts makers of watches to label a car "Swatch"?

To me "brand value" means trust. Some brands you trust if they branch out a little. In the rarest of cases, you trust brands for whatever they bring to the market. They are the real premium brands.

Herbert Francl

Banyoles, Spain

BusinessWeek is to be commended for its excellent article on brands and their real meaning for corporations. Beyond this, I must particularly applaud the sidebar by Neil Gross, "Valuing `intangibles': A tough job, but it has to be done." One important issue that his article did not mention was that of measuring the value of information systems.

Many systems survive for decades, undergoing constant tweaking and continual evaluation. To cost this by the amount paid programmers is simply incorrect. Now, the knowledge, tools, and methods exist to measure all information systems, regardless of their type. It is time to begin doing so.

Mordechai Ben-Menachem

Beer-Sheva, Israel

Your otherwise excellent article ignored privately owned brands such as Mars and LEGO. Over the past 50 years, the LEGO brand has become synonymous with creative construction toys instantly recognized by consumers the world over. More than 98% of its products are sold outside the brand's home market of Denmark. LEGO even appears in the Concise Oxford English Dictionary--a recognition achieved by only one brand on your list, Xerox.

Peter Eio

Retired President

LEGO Systems Inc.

East Granby, Conn.

Quality guru W. Edwards Deming would be turning over in his grave if he knew of the efforts that are being made to quantify something that cannot truly and honestly be quantified. By attempting to measure the value of brands, we are creating a time-consuming and, ultimately, meaningless activity--except for the consultants who will profit from this new fad.

Steven G. Brant

Brooklyn, N.Y.

In a turbulent, bumpy economic environment, advertising may be the Dramamine (there's a great brand) for an advertiser's brand-communications efforts ("Why advertising matters more than ever," Cover Story, Aug. 6). Advertising provides consistency and stability during a rocky ride. Give in to the temptation to cut back, and you may find your brand a little green around the gills for the duration of the rough ride and for a while after the seas calm. In the battle for survival of the fittest, advertising should be every brand's weapon of choice--now, more than ever.

David A. Park

Chairman

American Advertising Federation

Washington

Editor's note: The writer is also CEO of DDB Group/Los Angeles.

Your story makes some valid points about the advisability of keeping a brand strong by maintaining its media budget during an economic downturn. I would not go so far as to state that the piece is totally self-serving, but as it stands, it would fit better in your ad sales presentations.

Harley Schnall

New York "The dogfight for Bombardier's niche" (The Corporation, Aug. 6) is unfair to the Brazilian aircraft maker. Embraer is much more competitive and efficient than its Canadian rival. The difference is that Brazil's interest rates are much higher. The basic rate is 19% at the moment, making it impossible to compete. That's why the Brazilian government created Proex, a program to stimulate exports by offering credit subsidies. Bombardier is also subsidized and the World Trade Organization has recognized this, contrary to your allegations.

As a developing nation, Brazil has adopted punitive interest rates to stay afloat in the midst of economic shocks. If Brazil can't export--and Embraer is at the top of Brazilian exporting companies--the trade deficit will grow and the nation will soon have another balance-of-payments crisis.

Nelson Franco Jobim

London "Time to regroup" (American News, Aug. 6) includes a photograph depicting Brazil, once more, as a country that's not environmentally friendly. Progress doesn't come for free. The Amazon, an area equivalent to over half of the continental U.S., will be exploited to improve the living standard for millions of people.

As a Brazilian currently living in the Chicago area, I feel your readers should know about the projects to preserve and to recuperate the Amazon forest carried out by the Brazilian government and companies.

Luis Eduardo M. Monteiro

Elk Grove Village, Ill. Hong Kong's new airport is a state-of-the-art facility in the most desirable spot in Asia ("Hong Kong can't keep its skies closed forever," Asian Business, Aug. 6). So liberalizing U.S. carriers' access to Hong Kong's airport would be good for Federal Express and good for United Parcel Service, but it would poach business from Singapore and Subic Bay in the Philippines.

Allowing U.S. airlines to carry passengers freely beyond Hong Kong would be good for those carriers and good for consumers, but bad for Cathay Pacific Airways. For Cathay to be able to carry passengers to and within the U.S. market, however, is a "specious" request, presumably because the U.S. consumer does not need more choices and lower prices. Could it be that American and Asian interests do not always coincide?

Raymond Heche

Hong Kong How did the Sligo-born, Limerick- and Dublin-educated Niall FitzGerald suddenly become the "British" chairman of Unilever PLC ("Unilever restocks," European Business, Aug. 6)? I hope he hasn't switched allegiances on the off chance that he can identify himself as Sir Niall. Please tell me this was just a slip of the keyboard.

Conor Brophy

Dublin "The problem of global cooling" (Editorials, July 30) referred to "Brazil's falling cruzeiro." Please note that Brazil's President, Fernando Henrique Cardoso, enacted the new Brazilian currency, the real, more than six years ago.

Oscar Bosque Jr.

Cheshire, Conn.


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