Friday, May 17, 2013

"America’s Most Profitable Products"

I always worry about the methodology when I see one of these lists, but with that caveat, I still found this interesting. What especially caught my eye was how much brand drives the success of these products. Apple charges a significant premium for the logo, but it's the next three that really demonstrate the value of marketing.

With Apple, it's difficult to say how much success can be attributed to brand and how much is due to superior quality (they do make good stuff) and patents. With Marlboro, Monster and Coke, numerous comparable, even indistinguishable products are available at a significantly lower price.

Brand is the philosopher's stone of business. No one knows exactly how it works (and those who claim otherwise are not to be trusted), but there are people who are good at it and for those who are good and very lucky, the pay-off is amazing.

1. iPhone

Operating margin: 40%
Revenue: $80.5 billion
Market share: 20.9%
Industry: Computer hardware

2. Marlboro

Operating margin: 30%
Revenue: $19.0 billion
Market share: 42.6%
Industry: Tobacco

3. Monster

Operating margin: 26.7%
Revenue: $1.9 billion
Market share: 37.2%
Industry: Soft drinks

4. Coca-Cola

Operating margin: 25%
Revenue: $14.3 billion
Market share: 41.9%
Industry: Soft drinks

5. Enfamil

Operating margin: 24%
Revenue: $2.3 billion
Market share: 15.1%
Industry: Packaged foods and meats

6. Folgers

Operating margin: 23.6%
Revenue: $2.3 billion
Market share: 11.8% (U.S.)
Industry: Packaged foods and meats

7. Garmin nüvi

Operating margin: 15%
Revenue: $1.2 billion
Market share: Greater than 50%
Industry: Consumer electronics

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