As more consumers turn to mobile devices, they continue to use their favorite search engine. Despite a falling CPC (Cost-per-Click) Google Inc (NASDAQ:GOOG) controls 96.9% of the mobile search market. High market share will continue to boost Google’s 19% year-over-year revenue increase. As long as Google remains the favorite brand for online searches, it will retain its valuable pricing power.
Microsoft Corporation (NASDAQ:MSFT)
Tech analysts love to bash Microsoft Corporation (NASDAQ:MSFT)‘s latest operating systems. Vista flopped, and Windows 8 has failed to impress. If my math is correct, that means Windows has not released a “successful” operating system since 2010, when Windows 7 was released. Yet, in spite of these major disappointments, Microsoft still controls 92% of the desktop operating system market share.
This phenomena illustrates the fact that brand familiarity can be a stronger prediction of future purchases than actual performance. At some point customers will upgrade their operating system, and Microsoft will be waiting, flexing its pricing power. Sporting a 34% operating margin, Microsoft will continue to leverage its market share for profit.
The Coca-Cola Company (NYSE:KO)
What’s the first soda Americans turn to? You guessed it, The Coca-Cola Company (NYSE:KO). Moreover, given that a whopping 94% of the world’s population can identify the Coca-Cola logo, it arguably boasts the strongest brand loyalty worldwide.
Demand for soda has steadily dropped in the United States, but Coca-Cola shouldn’t be worried. In addition to steady growth in emerging markets, the company owns over 400 brands to complement its namesake including Dasani, the second largest seller of bottled water in the US. As Coca-Cola loses customers in its soda business, it will pick them up again in the water market.
To get a sense of Coca-Cola’s pricing power, take a look at its volume. The company sells the equivalent of 1.8 billion servings of drinks a day. If it raised its prices just one cent per serving, the company could increase its revenue by $18 million a day. As long as Coca-Cola remains loved by consumers, its competitive advantage will provide a safe haven for investors.
Get branded
Invest in brands that captivate people. Brand loyalty enables pricing power, which translates to long-term profits. To find these companies, pick your head up and take note of the preferences of people around you. The brand loyalty has led these companies to long-term profits, can also lead your portfolio to flourish.
The article Finding Profits in Brand Loyalty originally appeared on Fool.com and is written by Joshua Sauer.
This article was written by Joshua Sauer and edited by Chris Marasco and Marie Palumbo. Chris Marasco is HeadEditor of ADifferentAngle. None has a position in any stocks mentioned.The Motley Fool recommends Apple, Coca-Cola, and Google. The Motley Fool owns shares of Apple, Google, and Microsoft.
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