Saturday, October 8, 2011

Phat Company

"For the top 100 companies, about 30 percent of their total value is bound up in this thing called brand."
The World's Most Valuable and Fastest Growing Brands

Or, put another way, 30 percent of the value of the top 100 companies is derived from the fact that a certain level of sales is driven entirely by brand loyalty. Now, this is an average - the numbers by company vary widely - "Brand contributes about 20% to GE's total earnings, whereas Coca Cola is nearer to 80%." In effect, were I selling the exact same product as Coca-Cola (think a white can with "COLA" on it in black stenciling), my earnings would only be about 20% of Coke's, all because of the brand name on the can.

And we think nothing of this. People could literally save 30% on a regular basis by focusing on factors like price, location and quality.

On the other hand, I bet that you couldn't find a government anywhere in the nation that sees anything close to a 30% margin, even on its best day. But we always seem to feel that it's government that's ripping us off...

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