Then, what is the capital value of that additional annual profit stream?

Admittedly how much Coke would earn selling an identical black fizzy liquid takes a bit of guess work. It can't just be compared to, for example, private label brand sales and their share of market because, in some cases, brands actually drive the growth of the market. Think I-Pod and other MP-3 players.

But the Interbrand calculation has the advantage of consistency. They've been doing it for years. So if the calculations aren't exact, they're at least equivalent. It's an apples-to-apples comparison.

By Interbrand's calculations, a brand has to be worth at least $2.5 billion just to make the top one hundred list. The top ten are worth more than $20 billion apiece. And the king of the hill, Coca-Cola, is worth $67 billion (though slipping a bit).

As impressive as those numbers are, they may actually understate the value of top brands. A recent Wall Street Journal article reports on a study that indicates consumers' brains perceive and process strong, familiar brands differently than lesser-known brands.

The study, by Dr. Christine Born of the Ludwig-Maximilians University in Munich, used MRI scans to observe the impact of brand recognition on brains.

Test subjects were scanned with an MRI as they were shown logos of familiar and unfamiliar brands on a video screen inside the MRI chamber. One pair of logos was Volkswagen and SEAT (a small Spanish auto manufacturer).

The results were astonishing. "...the Volkswagen logo produced a strong pattern of activity in the part of the brain associated with positive emotions, self-identification and rewards. By contrast, the SEAT logo provoked activity in the parts of the brain associated with negative emotion as well as memory – suggesting that the brain had to work for a response."

The test got the same result when it was repeated with insurance brands, which tend to have much less emotional involvement than automotive brands.

There are two implications which are extremely significant for marketers:

1.    If a company succeeds in building a strong, positive brand, all communications for that brand has the advantage of  "positive emotions, self-identification and rewards" before saying a word. When consumers feel good about a brand, identify with it and find benefits in it from the get-go, the company has a tremendous head start over a competing brand that has to try to build those positive associations from the ground up.

2.    The awesome impact of a strong, positive brand transcends the more emotional product categories and works just as well in the more rational product categories. So a freight forwarder, paper towel marketer or industrial materials company can get as much benefit from the effect as a food company, jeweler or fashion house.

So what, exactly, is a brand? It's a lot more than a logo or a catch phrase (though both can contribute to building a brand). A brand is a set of perceptions, expectations, attitudes, associations and emotions in the minds and hearts of the target audience. It's part product, part communications, part experiential, part perceptual, part art and part science.

Be careful while you're building a brand. They can be built very quickly (think YouTube). But once built, they hang around for a long, long time. In conservative categories, such as financial services or healthcare, the general reckoning is that it takes at least eight years to change a brand name or perception.

Sound like a long time? What would it take to get you to buy a Yugo?  How about an Edsel? The Yugo disappeared from the American market more than ten years ago. The Edsel's been gone for forty-six years. But the brands live on in infamy, and would be the kiss of death if they were attached to Toyotas or BMWs.

On the other side of the equation the Marlboro brand is valued at more than $21 billion thirty-five years after the broadcast ban on cigarette advertising (and almost a decade after the ban on outdoor ads). And the J.P. Morgan brand is still worth billions even after the company itself has been absorbed into Chase Manhattan.

Done right, building a strong positive brand creates enormous equity for a company.

In 1998 Hyundai decided to increase their tepid U.S. sales by repairing their brand's unreliable image. They focused all of their efforts on building a brand which stands for reliability. It started at the factory level, where managers were empowered to stop assembly lines for quality problems. Top management stepped up and budgeted hundreds of millions of dollars of reserves to provide a ten-year, 100,000-mile warranty. And marketing relentlessly touts "America's Best Warranty™." The result? They've quadrupled their U.S. sales.

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