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6 Hottest American Brands

These companies rank favorably among consumers

By Douglas McIntyre, Co-Founder & Editor, 24/7 Wall St.

Generally, most brand analysis done by the business press is biased toward dollar valuations and contributions to corporate earnings. Obviously, financial success is one factor that demonstrates how well a brand is regarded by consumers. But brand valuation is a financial view and not one that relies entirely on consumer perception.

Based on analysis performed by brand expert company CoreBrand, 24/7 Wall St. wanted to see brands through the eyes of the consumer. CoreBrand looked at the largest brands where both favorability and familiarity increased, measured by overall reputation, perception of management and investment potential. 24/7 Wall St. then ranked the six brands with the greatest increases in favorability from the fourth quarter of 2010 to the fourth quarter of 2011.

One of the most notable results of the analysis is the high ranking of brands not normally present on most highly valued brands list. When they are evaluated through consumers’ eyes, however, brands that belong to companies that are struggling financially can still be high on a consumer-perception weighted list. These brands, naturally, are used by a large number of people. More than that, the consumer interaction with the product and services associated with the brand is positive.

These are America’s hottest brands >>

#1: Google

  • Familiarity: 89.3
  • Favorability: 68.6
  • Change in Favorability: +3.3
  • Change in Familiarity: +2.1
  • 2011 Revenue: $38 billion
  • Market Cap: $184 billion

Google (NASDAQ:GOOG) has only been around since 1998, yet in that short time it has already become such a major force in American society that the word “Google” has been added to the Merriam-Webster dictionary. The Internet giant has the second-most valuable brand, according to BrandZ, beating out such heavy hitters as McDonald’s and Coca-Cola. The company is the dominant search engine in the United States, with a 66% share of the search market — more than four times that of second-largest search engine, Bing. Google also has been particularly successful in other areas. The company’s Android operating system for mobile devices has a 50.1% market share among smartphone subscribers in the U.S.

#2: Apple

  • Apple Mac StoreFamiliarity: 90.1
  • Favorability: 74.5
  • Change in Favorability: +3.3
  • Change in Familiarity: +1.6
  • 2011 Revenue: $108 billion
  • Market Cap: $535 billion

Apple’s (NASDAQ:AAPL) high ranking among America’s favorite brands is well-established, as illustrated by its position on CoreBrand’s list, as well as BrandZ, where it is listed as the most valuable global brand. On both lists, Apple has among the greatest increases in brand value from 2010 to 2011. The company is particularly innovative, having broken ground with highly successful products such as the iPod, iPhone and iPad. The company currently has a 24.2% share of the smartphone market, a 68% share of the tablet market and a nearly 66% share of the online movie store market.

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#3: Avon

  • Familiarity: 89
  • Favorability: 74.4
  • Change in Favorability: +3.3
  • Change in Familiarity: +0.2
  • 2011 Revenue: $11 billion
  • Market Cap: $7 billion

No one on Wall St. would put Avon (NYSE:AVP) on a hot brands list, or any list other than companies that are in trouble. Avon has done so poorly financially that its CEO was recently replaced. Lost in the news about Avon’s management trouble is the brand’s unbelievable presence among consumers. Founder David H. McConnell, who started Avon in 1886, came up with the idea of using female representatives to sell the company’s products door-to-door. There are now approximately 6.4 million “Avon ladies” selling the company’s products in the field. Avon has expanded from beauty products to housewares, entertainment, watches, apparel and footwear.

#4: Ford

  • Familiarity: 90.7
  • Favorability: 68.1
  • Change in Favorability: +2.8
  • Change in Familiarity: -0.3
  • 2011 Revenue: $136 billion
  • Market Cap: $38 billion

The source of Ford’s (NYSE:F) familiarity is simple. It has been one of the three largest car manufacturers in the U.S. for years. Founded by Henry Ford in 1903, it has sold vehicles in America for eleven decades. Ford’s image probably was burnished by the fact that it was the only one of the large U.S. car manufacturers that did not go bankrupt in 2009 and did not need bailout money. At the time, the U.S. government shepherded Chrysler and General Motors (NYSE:GM) through restructurings.

Ford’s U.S. sales rose 13% in May. Trucks led Ford’s sales report, with the highlight being a 29% gain for its F-series trucks — the best-selling vehicle in the U.S. Overall, cars were up 6%, utilities were up 12% and trucks improved 21%. Total sales were just over 216,000. Another hurdle Ford had to overcome was the long period during which Japanese cars were considered better-built than U.S. ones. But it has emerged from this period with strong customer satisfaction ratings — in some case better than those of Toyota (NYSE:TM) and Honda (NYSE:HMC). In the JD Power U.S. Vehicle Dependability Study, Ford and its Lincoln nameplate both ranked near the top of the list among all manufacturers, just shy of Mercedes.

#5: Microsoft

  • Familiarity: 91.9
  • Favorability: 74.8
  • Change in Favorability: +2.7
  • Change in Familiarity: +1.1
  • 2011 Revenue: $70 billion
  • Market Cap: $252 billion

Like Dell, Microsoft (NASDAQ:MSFT) is one of the largest companies in the world and owes its initial success to the 1980s rise of the PC. Apple and the Mac fall into the category as well. Microsoft provided the initial operating system for the pioneering IBM PC, which was launched in 1981, and “cloned” by a number of manufacturers, including Dell. When the IBM product was launched, Microsoft was barely five years old. Microsoft’s high familiarity draws from its presence in roughly 80% of all PCs — desktop or laptop.

Its brand has been extended, in terms of consumers, with its presence in the game console business. Microsoft’s Xbox is one of the three most widely used consoles, along with those manufactured by Nintendo and Sony (NYSE:SNE). Microsoft also owns the second most well-used search engine in the U.S., Bing, and one of the most visited web portals, MSN. Microsoft’s near-term challenge is that the devices consumers use daily have rapidly become smaller and more portable. These markets have been dominated by Apple and its iPad and iPhone products. Samsung and Sony have also pressed into the same businesses.

#6: Dell

  • Dell BaiduFavorability: 89.2
  • Familiarity: 71.3
  • Change in Favorability: +2.2
  • Change in Familiarity: +1.5
  • 2011 Revenue: $67 billion
  • Market Cap: $21 billion

Dell (NASDAQ:DELL) had 11% of the global PC market in the first quarter, according to research firm IDC. That puts it behind only Hewlett-Packard (NYSE:HPQ) and China-based Lenovo. The firm benefits from being one of the earliest into the desktop market when it was founded in 1984. The PC market was in relative infancy then and Microsoft Windows OS was still one year from its public release. Dell’s consumer visibility also was likely helped by its decision to sell PCs online instead of just through retail outlets.

Dell’s recent problems have been considerable, although they are ones most consumers may not be aware of at all. Dell has not been successful competing with Apple or Samsung, the leaders in the tablet PC and smartphone markets. As “computing” has moved onto portable products, PCs have become commodities. This has pressured the operating margins of almost every company in the sector. However, the Dell brand is still among the most visible in the consumer tech industry.

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Article printed from InvestorPlace Media,

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