Highest brand equity: General Electric

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General Electric Co.’s brand equity at the end of the first quarter totaled $55.25 billion, or 17.74% of the corporate giant’s market capitalization, according to a proprietary formula developed by branding consultancy CoreBrand.

Rounding out the top five in brand equity dollar value, according to CoreBrand’s calculations, were Microsoft Corp. ($51.36 billion), Exxon Mobil Corp. ($36.39 billion), Pfizer ($31.36 billion) and Johnson & Johnson ($27.84 billion).

The dollar value of brand equity, however, is not what intrigues CoreBrand CEO Jim Gregory about the formula his firm created. Instead, he believes that the average publicly traded company can benefit more by focusing on boosting the percentage that brand equity contributes to its market capitalization.

At the close of the first quarter, FedEx Corp. held a slim lead in that category over its chief rival, United Parcel Service of America, which had held the top spot at the end of last year’s first quarter. FedEx’s brand equity as a percentage of market cap was 19.64%, up from 18.8% a year earlier. UPS’ brand equity as a percentage of market cap at the end of this year’s first quarter was 19.05%, down from 19.1% a year earlier.

Gregory admires both companies. "They’re up there in Coca-Cola kind of range," he said. "It takes an extraordinary b-to-b brand to generate that kind of brand power." Coca-Cola Enterprises’ brand equity comprises 20.6% of its market cap, according to CoreBrand.

It’s difficult to say what caused the shift between UPS and FedEx. Neither company has slacked off on marketing spending. FedEx spent $88.7 million in 2003, a 4.8% increase from 2002, according to TNS Media Intelligence-CMR. UPS spent $166.7 million last year, a 1.7% increase over the previous year.

Laura Ries, president of branding consultancy Ries & Ries, said despite their high brand performance, both UPS and FedEx have put their brands at risk of dilution by venturing into new arenas. FedEx, for example, recently rebranded its subsidiary Kinko’s as FedEx Kinko’s. And UPS now repairs Toshiba laptop computers.

But Steve Holmes, UPS public relations manager, believes his company’s brand has great elasticity. Rebranding Mailboxes Etc. as the UPS Store has doubled shipping rates at the renamed stores, he said.

Indeed, to find a model company that has extended its brand across a range of industries, the two shipping giants needn’t look any further than the top of the brand equity dollar value list: GE.

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