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Is Nike a better shoe than Reebok? Is Michelin a better tire than Goodyear? Who really knows?
Sure, each brand has their loyalists, and if you ask the executives at Nike and Michelin, I suspect they'd have reams of data to prove that their products are the best. But to the average shoe or tire buyer, are Nike and Michelin all that different from the competition?
If you took all the brand indicators off both products, would you know which is made of longer-lasting material or offers better performance? In all likelihood, you wouldn't.
If that's the case, why are people like you and me willing to spend more for products from companies like Nike and Michelin? The answer, in a word, is branding. These marketers know that the huge investment of time and money they spend on their brands will make their products worth more in the marketplace. And they're right.
In BusinessWeek/Interbrand's 2007 ranking of the 100 Best Global Brands [BusinessWeek.com 08/06/07], the global value of the Coca-Cola brand was $65 billion. That's the brand alone -- not the trucks, not the bottling plants, not even the secret formula.
The same study says that the McDonald's brand is worth $29 billion, and BMW $21 billion.
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