Brand of Power and Power of Brands

Washington Post on brands and power:

Not long ago, the value of a company consisted largely of its “book value”: physical assets such as factories and equipment plus money in the bank. But today book value accounts for only about a third of the stock market capitalization of the top 150 U.S. companies, down from three-quarters two decades ago. In the new economy, corporate value lies in intangible assets: patents, databases, know-how — and brands.

So brands are eclipsing factories in value, and big brands appear to be crowding out smaller ones and reaching all around the world.

As brands have grown bigger, they have also grown more vulnerable. Marketing gurus such as Tom Collinger of the Medill School describe an unnerving revolution: The owners of brands used to sustain them with huge advertising budgets, but now consumers form their views of products in Internet chat rooms. If brands are both valuable and vulnerable, political consequences follow. Mighty companies have so much riding on their corporate image that they quiver in the face of customer opinion. And if they are mass-market companies, customer opinion is the same as public opinion, so corporate bosses become as sensitive to political and social shifts as elected officials.

Full article.

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