This week Interbrand published its Best Global Brands report for 2017. The report identifies the world’s 100 most valuable brands. To develop the report, Interbrand examines three key aspects that contribute to a brand’s value, namely, the financial performance of the branded products or service, the role the brand plays in influencing consumer choice and the strength the brand has to command a premium price or secure earnings for the company. The agency has been conducting this study each year from 2000.

This year the top three brands come from the technology sector and they are Apple, Google and Microsoft, in this order. Coca-Cola has dropped to fourth place. The other brands in the top 10 are Amazon, Samsung, Toyota, Facebook, Mercedes and IBM.

In the luxury fashion brands sector, Louis Vuitton tops the list followed by Hermes and Gucci. In this sector, the losers seem to be Burberry, Prada and Ralph Lauren.

This is far as the news goes. However, what is important is to understand how the power of branding has changed and increased over the last years and decades. This is because all brands (large and small, successful and unsuccessful) are finding it exceedingly difficult to maintain customer engagement and loyalty.

This year the top three brands come from the technology sector

Thanks to technological developments and changing consumer patterns, several brands still need to understand what represents value in their brand and what represents good quality. For example, it is senseless to develop the brand of a bank on the basis that it is a secure bank because customers nowadays take it for granted, especially in Europe, that a bank is secure. So developing the image of a bank on the basis of its security would not produce any returns.

The point is that over the decades we have changed the way we look at products and services and what they are called. There was a time when our demand for a product was based on its utility. So we were really buying goods because we felt they were useful and  could make our life easier. With time, products became more sophisticated and could be more easily copied.

This product differentiation has become a thing of the past up to a great extent.

Let us take the example of a car. Today we would not dream of buying a new car that does not have an airbag. However, when airbags were first introduced to cars, they represented a real value add.

With product differentiation becoming less important, other factors have come into play and branding is one of them. Today we no longer base our demand for a product on its utility but on the experience, whether promised, perceived or real. That experience needs to be a reflection of the identity of theindividual consumer.

Let me again give a practical example. I have mentioned that Facebook is in eighth place in the list of global brands. However, if one does not identify oneself with the so-called Facebook generation, the Facebook brand has little meaning.

On the other hand, using Facebook to communicate is very often described as a hobby or interest, as evidenced in many of the CVs that we receive at Misco. Thus the use of a particular tool has become the hobby or pastime rather than the activity per se.

The brand becomes an object of desire, which then transforms itself into a demand for the product. What makes a brand desirable will differ from one to the other. However, certain basic principles apply to all brands, irrespective of the segment they are in.

These are authenticity (how truthful is the promise of the brand when compared to the actual experience of using it?); culture of excellence (does the brand really reflect excellence in its sector and compared to its peers?); and relevance (does the brand still exceed consumers’ expectations given today’s technological advancements and increasingly liberal society?)

Over the years we have seen brands fall in and out of grace, not because the products lost their inherent value or utility but because they failed the test in one of the three principles I mentioned. The same could happen to today’s top brands.

It all hinges on whether the companies owning these brands understand the source of the power of their brands.