Smart entrepreneurs know that naming their business is an important component of their overall business strategy. "AAA Plumbing" might put you at the top of the Yellow Pages to attract harried homeowners looking for someone to quickly clean out a clogged drain, but Roto-Rooter has mindshare among consumers (and a catchy jingle) that generated $370 million in revenues for Chemed last year.
A rose by any other name may smell just as sweet, but you can't put a price on a top brand name. Well, actually you can. Every year the market researchers at Interbrand compile a list of the world's top brands and determine what they're worth. From perennial leader Coca-Cola
When branding your own business, you might never come up with something as memorable as Kleenex (No. 80), whose name has virtually passed into common parlance as a synonym for a tissue (or it would if Kimberly-Clark
Just realize that branding isn't the be-all, end-all for being in business: You still have to deliver. And that's what the Interbrand list highlights: companies that've proven time and again they can deliver consistent quality in a way that generates trust.
But don't take that line of connection for granted. Companies can break that trust. As the report notes, Nike once stumbled by becoming the "poster child for sweatshops" and raising the ire of human rights activists. It had to go into "brand rehab," but is now on the list for the sixth straight year (No. 26). BP
The list is as fluid as business itself, with Facebook
For investors as well as entrepreneurs, the list provides a rich tableau of opportunity. Although American brands dominate the list, accounting for 53% of the top global names and eight of the top 10, European companies represent 34%, with Asia rounding out the rest at 10%. Notably, Samsung and Toyota are Nos. 9 and 10, perhaps a bit surprising if you recall the unintended acceleration problems that dogged the carmaker two years ago. That means you shouldn't be wary of looking abroad when you want to find stocks that have become part of the fabric of our existence.
Unlike the businessman who thinks he needs to come up with an exotic name to indelibly stamp his company into the mind of his customer, the list shows investors that the ordinary and commonplace can be a profitable avenue of investment. The saying "familiarity breeds contempt" shouldn't have you dismissing these big brands because you know and love them. Instead, they just may be the ones you need to add to your portfolio.
Looking under rocks
It's not just its IPO that has made Facebook such a valuable brand. Interbrand highlighted its role in feeding the Arab Spring uprisings and its ability to stay relevant to its 1 billion users. Now there's a new premium report on Facebook from the Motley Fool detailing the opportunities and challenges in store for its shareholders. The report includes a full year of updates, so click here to get started now.