Monthly Archives: November 2022

2022 Top Global Brands

As marketers, we know that brands influence consumer purchasing decisions. But really, what is a brand? Does a brand have a financial value? Does it drive growth?

These are critical questions that drive the strategic marketing decisions of corporations around the world. In general, marketers define brand as the position that a company/product holds in the minds of the consumers. It follows then that if the brand holds a position in consumers’ minds, then it would definitely translate into a financial value for companies.

Each year, Interbrand does a financial analysis that seeks to define, in dollars, the value of a company’s brand – the result is the annual Best Global Brands ranking. In order to be included in the report:

  • The brand must be global – it must have successfully crossed geographic and cultural boundaries.
  • At least 30% of revenue must come from outside the brand’s home region.
  • The brand must have a significant presence in at Asia, Europe, and North America, as well as geographic coverage in emerging markets.
  • There must be sufficient publicly available data on the brand’s financial performance.
  • Economic profit must be expected to be positive over the longer term, delivering a return above the brand’s cost of capital.
  • The brand must have a public profile and awareness above and beyond its own marketplace.

Interbrand’s brand valuation methodology seeks to determine, in customer and financial terms, the contribution of the brand to the company’s business results. There are three key components in the methodology for the valuations: analyses of the financial performance of the branded products or services, of the role the brand plays in the purchase decision, and of the competitive strength of the brand.

Brands in the top five  in 2022 include Apple (number one for the 10th consecutive year), Microsoft (moving up a spot to number 2), Amazon, Google, and Samsung. Indeed, the top 10 brands have a cumulative brand value greater than the combined value of the 90 brands.

The fastest risers from 2022 in terms of brand value percentage change are Microsoft, Tesla, Chanel, Ferrari, Lego, Google, Hermes, and Dior. New entrants to the list in 2022 include Airbnb (#54), Red Bull (#64), and Xiaomi (#84).

How many did you correctly guess?

Group Activities and Discussion Questions:

  1. Ask students to define “brand.” What is it? Does it have value to a company?
  2. Have students take out a piece of paper. Ask them to choose what they think are the top 10 most valuable brands in the world.
  3. Then show the top 10 list from the Global Brand report: https://interbrand.com/best-global-brands/
  4. How many did they get correct? What surprised them?
  5. Show a video on the methodology used to evaluate brand value: https://youtu.be/tK2ozWQ0HA4
  6. Show students several of the sections within the site and view the videos as a class.
  7. Divide students into teams and assign each team an industry category to examine: automotive, apparel, beverage, electronics, energy, etc.
  8. Have each team present key findings from the industry sector they examined.
  9. How can these findings be applied in marketing strategies?

Source: Interbrand.com; PR Newswire

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McDonald’s Offers Adult Happy Meals – Complete with Toy

We’ve discussed the impact of nostalgia on marketing. (Nostalgia is when someone longs for a different time period when they were happy.) We usually think of nostalgia as being an older person longing for an earlier time period or event. Perhaps it is caused by seeing or wishing for something that happened when a consumer was younger.

Marketers know how to use those desires. For example, Mattel recently brought back several older toy lines to gain more adult buyers. And now McDonald’s appears to be following suit by launching a limited edition of “adult Happy Meals” that include not only food, but older versions of collectible toys.

Why the adult meals? Well, that’s easy. McDonald’s hopes to lure back older consumers to the fold by reminding them of the pleasures of toys and burgers (or chicken nuggets). For a limited time, when ordering the adult Happy Meal, one gets slightly warped figures of Grimace, the Hamburglar, and Cactus Buddy (new figure).

The collaboration with Cactus Plant Flea Market for the toys is a little unusual for McDonald’s as CPFM represents younger designs and apparel for a streetwear market.

The meals have different packaging and higher prices. Adult Happy Meals range from $14.09 to $17.99. Demand has been high with most franchises sold out of the meals. And buyers are already flipping their toys on resale sites such as eBay with reports of sellers pricing the toys for thousands of dollars (although a recent search show much lower prices).

Don’t you feel like a kid again?

Group Activities and Discussion Questions:

  1. Have students define the target market for McDonald’s. Then have them define the adult Happy Meal target market (demographics, psychographics, etc.).
  2. View ad: https://youtu.be/sYdNnkz1bik
  3. View brief video story: https://youtu.be/p5ZfSlwMz8g
  4. Have students do a search on social media for the toys. What had the response been on social media?
  5. Also have students search resale sites for the toys.
  6. Divide students into teams. Have each team identify a product that could be revamped for a different market segment.

Sources:  Gallagher, J. (13 October 2022). With adult Happy Meals, McDonald’s sparks a collecting frenzy. Wall Street Journal.  

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The Bullwhip Effect Impact on Inventory

The bullwhip effect is in fine form these days. What is the bullwhip effect? In short, the bullwhip effect is when small changes in demand at the retail level can cause large changes in demand at the wholesale, distributor, and manufacturer levels. Think of how a bullwhip whistles through the air… The small motion of the whip base causes a big crack at the end of the whip, putting everything in disarray.

The result can either too much inventory (excess product) or too little inventory (unfulfilled need). Ideally, retailers want to have enough inventory to fill demand, but not too much waste storing extra inventory. It’s a fine balance. And of course, the balance was upset by the COVID pandemic when the supply chain was significantly disrupted globally. (Remember all those empty shelves for toilet paper?)

Retail spending for some categories trended upwards during the pandemic when (1) customers demanded more inventory, so (2) retailers ordered more product, followed by (3) wholesalers ordering more from (4) manufacturers, who in turn ordered more from (5) suppliers to meet demand. The cycle was exacerbated into a larger swing in orders. Excess inventory tends to be discounted so that the shelves clear. And then the cycle start again….

Bullwhips are tough to manage. It takes coordination throughout the supply chain to maintain balance. Technology can help, but it takes a continual evaluation of on-hand inventory, order timing, and pricing.

Go ahead, crack the whip and see what happens.

Group Activities and Discussion Questions:

  1. Poll students: What categories of items have been in short supply? What categories have more inventory than needed?
  2. Show video from WSJ: https://www.wsj.com/video/series/wsj-explains/why-everything-is-on-sale-the-bullwhip-effect/86086359-41FE-440C-9E66-A106E6D045A6
  3. How can the bullwhip effect be minimized?
  4. What should be done at each step of the supply chain?
  5. Is there a long-term effect?

Sources:  Wall Street Journal (5 October 2022). Why everything is on sale: The bullwhip effect. Video.

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