Page 86 - Battleground The Media Volume 1 and 2

Brand ng the Globe |

gLoBaL BranDs anD ThE growTh
oF ConsumEr markETs
As multinational corporations and advertising agencies have spread around
the globe the concept of branding has also spread. Naomi Klein (2000a) wrote
in The New Statesman:

The formula for these brand-driven companies is pretty much the same:
get rid of your unionized factories in the west and buy your products
from Asian or Central American contractors and sub-contractors. Then,
take the money you save and spend it on branding—on advertising.
Corporations like Nike, Reebok, and Tommy Hilfiger have moved their pro-
duction outside the United States to the developing world’s “free-trade zones”—
free, that is, of taxes and wage or other labor regulations. In these developing
countries, multinationals can produce goods at a fraction of the cost of manu-
facturing in a developed country. This successful formula has allowed the big
image-makers like The Gap, Tommy Hilfiger, Ralph Lauren, and Nike, which
were once satisfied with a 100 percent markup from the cost of factory produc-
tion, to get closer to a 400 percent markup (Klein 2000b).
According to Klein, these profits are then pumped back into global advertis-
ing, which has resulted in these brands becoming global icons. Today, the top 10
global brands as identified by Interbrand include 8 U.S.-based firms, one Finn-
ish, and one Japanese (see Table B.2).
While the expansion of Western brands throughout the world proceeded
quite successfully during the twentieth century, bringing massive wealth to the
West, at the beginning of the twenty-first century there are signs that the spread
of global capitalism may have some unintended side effects. During the next
50 years, 97 percent of the world’s population growth is expected to take place in
the developing countries (e.g., India, China, Indonesia, and Brazil). The United

table B. The World’s Top Global Brands in 2005

rank organization headquarters
1 Coca-Cola USA
2 Microsoft USA
3 IBM USA
4 GE USA
5 Intel USA
6 Nokia Finland
7 Disney USA
8 McDonald’s USA
9 Toyota Japan
10 Marlboro USA

Source: Business Week Online, 2005.