Based on an article written by Don E. Schultz, professor of Integrated Marketing Communications at Northwestern University, in the October issue of Marketing News, American brands have lost their value.  Professor Schultz’s theory is based on the political turmoil and the S&P’s lowering of the U.S. credit ranking by one point, which has been the first time since 1917 when the ranking system started.  The U.S. as a country is now worth less today than it was a year ago.  ($1.176 Trillion less, or 9.3%, thanks to the lowering of that point.)  Brand strength is determined by several methodologies which directly tie into that country’s GDP (gross domestic product).  The GDP is separated into three segments; first -agricultural/forestry/fishing, secondary – manufacturing and industry, tertiary – services, financial, insurance.  To determine the country’s GDP, a royalty rate is identified to each of these three segments and then a total net present value of the brand today and the expectation of the future brand strength are given.  This calculation was derived using a weighted average cost of capital from Bloomberg.  From all of this, a National Brand Index is derived from all the brands in a specific country.  Read more...

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