AKRON-If you believe everything you read, then Michelin and Pirelli tire brands have negative or zero value. But then again, so do such well recognized brand names as IBM, Del Monte and Borden, according to an article in the Aug. 2 issue of Financial World.
The magazine, which surveyed the value of 290 brands across a variety of retail segments, listed the values of three other tire brands as well:
Continental was estimated at $106 million-a decline of 42 percent compared with its assigned value by the magazine a year ago;
Bridgestone, at $1.18 billion, was up 17 percent compared to last year; and,
Goodyear, at $2.87 billion, was up 12 percent in value, based on the magazine's calculations.
Goodyear placed highest among the five tire brands included in the study and ranked 29th among the 290 brands listed.
Michelin and Pirelli brands were given negative ratings by the magazine because both companies lost money in 1993.
Not surprisingly, tire manufacturers' individual responses to the magazine's rankings varied depending on the position of their respective brand on the list.
``The Financial World magazine survey is yet another indication that our efforts to increase Goodyear brand value are paying off,'' said Barry Robbins, Goodyear's vice president of marketing.
``We've done it through a wide range of new, innovative products and an aggressive advertising and marketing campaign which have brought home the message of Goodyear brand value to consumers,'' he said.
But other tire makers weren't quite so accepting of the magazine's results.
``The Financial World rankings are determined with the use of a complex formula that incorporates information other than true indicators of brand value,'' a Michelin spokesman said regarding the article. ``The true indicators include consumers' recognition of the brand name and perceptions of product quality.
``We're pleased with the status of our brand-no matter what Financial World's rankings said.''
Michelin's response isn't necessarily a case of sour grapes. Rajeev Batra, an associate professor of marketing at the University of Michigan, termed the magazine's ranking methods ``very judgmental.''
``It's one of many methods that brands can use to measure their value,'' Mr. Batra said. ``There's no guarantee that it is the right number in that other people could come up with other equally valid numbers.''
To derive its rankings, Financial World uses a formula comparing the capital needed to generate a certain amount of sales by both a brand and its generic equivalent, calculates the premium achieved from the brand's cachet, then applies a multiplier based on the brand's strength to produce an actual dollar value for any given brand.
The method relies heavily on a company's earnings-far too heavily, in Mr. Batra's opinion.
The public's perception of a brand is an important factor that can't be ignored, he said. ``What people think of the Michelin brand should be figured into it.''