Introduction
The value gained by a company through its products bearing a recognizable name compared to its generic equivalent is known as Brand equity. Companies can generate brand equity by making their products easily recognizable, memorable, and superior in terms of reliability and quality. There are seven key elements that make up brand equity: flexibility, loyalty, relevance, energy, differentiation, reputation, and awareness. Substantial Brand equity ensures negotiation power advantage, effortless business growth, better margins, and customer loyalty and gives one a competitive edge in his business. Brand equity serves a critical role in measuring a brand’s value. The components of a brand include the image, logo, name, and perceptions that depict the provider, service, or product in customers’ minds. In addition to that, it helps in marketing communications, packaging, and advertising.
The brand equity formula is used to measure the brand value by first calculating the price difference between a generic product and a branded product, followed by multiplying the price difference with the total volume of branded sales. The traditional communications between consumers and brands have changed due to social media, which has enabled consumers to make both negative and positive influences on brand equity. The development of brand equity goals essential in performance and progress tracking is the best way to manage brand equity. Many products and companies have established brand equity. Coca-Cola, Apple, Amazon, Starbucks, and Tylenol are the most recognizable companies.
Coca-Cola
Coca-Cola Brand Equity Review. The Coca-Cola Company was founded on January 29, 1892, in America. It is a multinational corporation that is headquartered in Atlanta, Georgia. The company is incorporated under Delaware’s General Corporation law and focuses on manufacturing, marketing, retailing syrups, and non-alcoholic beverage concentrates. Since 1889, the company has been operating a franchised distribution system. Coca-Cola Refreshments in North America is where the company has its anchor bottler. The company’s stock is part of the S&P 100 and S&P 500 indexes and also DJIA. In addition to that, the company’s stock is listed on the NYSE. The largest producer of Plastic waste globally is the Coca-Cola Company. Brian Smith is the president and COO of Coca-Cola company while the chairman and CEO are James Quincey.
Brand Salience
Portfolio
Coca-Cola Company offers more than 500 brands as of 2020 across the more than 200 countries that it serves. Due to the economic effects brought by Covid-19, the company in September 2020 announced that it would reduce its brands by almost half. The underperforming products like ZICO coconut will be retired in line with the company’s strategy of reshaping its beverage portfolio with the objectivity of driving growth and impact. Resetting the company’s portfolio will place the company in a better position to promote regional sales globally and nurture promising local innovations.
Non-food assets owned by Coca-Cola Company include the Colombia pictures and the World of Coca-Cola. The company acquired Colombia pictures in 1982 due to the studio’s low monetary value. It is the only and first studio owned by this gigantic corporation. The films produced by Columbia pictures while during Coca-Cola ownership include Karate Kid, Ghostbusters among others. The studio was sold in 1989 to Tokyo-based Sony. The world of Coca-Cola acts as a soft drink-themed tourist attraction by serving as a multi-storied exhibition. The features of this exhibition include a history of the museum and flavor sampling. It is located in Lake Buena Vista, Florida, and Las Vegas, Nevada.
The healthy beverages that came as non-carbonated beverage brands came about during the 1990s to respond to increased interest and demand for healthy beverages by consumers. Some of the healthy beverages include Minute maid juices to go, Fruitopia fruit drink, flavored tea Nestea, PowerAde sports beverage, Dasani water, and many others. The minute maid division introduced the brand of orange juices in 2001. Vio was introduced in 2016 by Coca-Cola India in the Value-added dairy category. C2 Cola seemed to be a better alternative to co*ke classic because it contains low-carbohydrates, gaining popularity in 2004. C2 cola was not a replacement for Zero-Calorie soft drinks, although it was replaced by Coca-Cola life in 2013. A sparkling fruit-flavored drink known as Finley was introduced in 2014, whereby it targeted adults. Innocent Drinks is also a Coca-Cola company investment from 2009.
The best-selling soft drink is co*ke or Coca-Cola, which takes after the company’s name. The history of Coca-Cola started way back in 1886 when Dr. John Pemberton created it. Currently, the soft drink comes in a variety of flavor choices and sweeteners. Other brands of soft drinks include SpriteSprite and Fanta. Sprite was introduced in 1961 in response to 7 up. It is a lemon soft drink which is also considered to be the best selling. During the Second World War, it was impossible to sell Coca-Cola in Germany; hence as an alternative, Fanta was explicitly developed for the German market. The company adopted it as a brand after the war, and since then, it has been availed in different flavors like strawberry, pineapple, apple, grapefruit, Peach, and Grape. In 1969, the corporation came up with Simba in response to Mountain Dew. Simba’s packaging depicted African desert, and the symbol of this brand was an African Lion. Other sub-brands of Coca-Cola Company include Schweppes tonic water which was developed in 1783, and smart water is the leading water brand in America. Others include Costa coffee, Georgia Coffee, Fairlife, Honest, Fuza tea, AdeS, Aquarius, Topo Chico, Appletiser, Gold peak, Vitaminwater, Fresca, Huiyuan Juice, among others.
Design
The Coca-Cola Company’s sustainable packaging design is aiming at making it 100% recyclable by 2025. The design is also aimed at making use of at least 50% recycled material by 2030 in their packaging. Currently, 90% of the company’s packaging is recyclable and includes glass bottles, aluminum bottles, aluminum cans, and plastic bottles. Both the market and brand teams are working on changes in packaging that will ensure increased recycled materials. Over the next five years, the corporation is aiming at reducing the usage of Virgin plastics developed from nonrenewable sources. Through investing in innovative technologies, the company has developed new packaging types like Marine bottles using recycled and recovered marine plastics. Refillable Packaging addresses both sustainability and affordability concerns. The ‘Universal bottle’ that Coca-Cola Brazil developed is being adopted by markets in Latin America whereby multiple core brands use the same package, leading to efficiency. Different Coca-Cola packaging types have different trade-offs and benefits depending on the material’s reusability, recycled content, and recyclability.
Red color and Coca-Cola goes hand in hand. Coca-Cola was sold in barrels over more than 130 years ago at American pharmacies and drug stores. The distribution of alcohol used to take the same approach. During this time, soft drinks were not taxed, while alcohol was taxed. Therefore, to help the tax and customs officials differentiate it from alcohol barrels, the Coca-Cola Company started painting their barrels red. The Coca-Cola logo acts as a trademark, and throughout the generations, it has remained fashionable. Placement of the drink n the red circle is another hallmark that has made the advertisem*nt and decoration easy in stores and restaurants. The Coca-Cola logo design elements include the co*ke Logo font, which is fancy giving a cursive impression. The uniqueness of the first Cs together with the white Swirl beneath the font gives it a distinctive look and highlights the simplicity of the logo. The white and red colors used are vibrantly capturing the minds of youths. The white font looks good in the robust red background. The red color portrays passion, energy, excitement, and power in marketing, hence stimulating appetite, making it an excellent choice for the company when branding its products.
Availability
Online shopping seems to be the best option currently due to Covid-19; hence Coca-Cola Company is putting up strategies that will ensure that the brand is “within the click’s reach of desire.” Ecommerce channels have doubled because of the imposed lockdown; hence the company is prioritizing packaging options that are suitable for the purpose of increasing app visibility, boosting digital imagery investment, and online sales. The Digital B2B solutions aid in managing customer deliveries and orders. My co*ke is a digitalized ordering platform that was injected with more than 8000 outlets. The expansion of digital platforms like Coca-Cola En Tu Hogar in relation to the direct-to-consumer experiment allows consumers to order beverages for home deliveries.
According to Quincey, the company is exploiting the Omni-channel opportunity while placing the consumer at the center. One of the ways Coca-Cola is using to shape the unprecedented digital demand is through fostering the brand’s presence on the Virtual Aisle. Investments are being made on high-quality content like product descriptions, videos, and photos to ensure that the brand continues to look as good virtually as on store. Another way is through prioritizing the preferred packaging and brands, while the last was by triggering impulse buying by using social commerce solutions, food and beverage bundles, and personalized offers.
Footprint
Thirsty consumers are served by Coca-Cola in more than 200 countries. Approximately 70 % of the company’s sales are from outside the United States of America. The six operating segments managed by Coca-Cola Company are geographically based, and they include Asian Pacific; Global ventures; and Bottling Investments, North America, Latin America, Africa, the Middle East, and Europe. These geographical segments facilitate the sale and manufacture of syrups and beverage concentrates. The largest geographical segment is North America, which accounts for more than 30% of sales. Latin America accounts for more than 10% of the total sales, while Asia-Pacific regions and EMEA generates around 15% revenue. 5% of the total revenue is contributed by Global ventures, while the Bottling Investments segment generates 20% of the revenue. 30% of the company’s sales are generated in the US. The unit case volume outside the US is highest in India, Brazil, China, and Mexico. Coca-Cola Company owns Plant warehouses, close to 413 offices, and other facilities globally.
North Korea and Cuba are the only two countries that Coca-Cola is not sold officially. This is because of political circ*mstances, mainly dictatorships and wars that have crippled its operations in these two countries. In 1906, the company opened its first bottling plant in Cuba, but due to trade embargos, production was pulled in 1962 shortly after Fidel Castro took over. The Korean War that broke out in 1950 saw that co*ke has never been sold in this country. Despite all these political challenges, the company is well represented globally, which includes its recent addition to Myanmar in 2013.
Brand Image
Brand purpose
To refresh the world and make a difference remains clear as the Coca-Cola company purpose from the time it started in 1886. Refreshment became not only in spirit but also in a physical sense. In addition to that, Coca-Cola is not only supposed to refresh people but also society. Currently, the company deals entirely in beverages, whereby it exists in almost all beverage categories with more than 500 brands. More than 700,000 employees in the company’s system help in the distribution of the various Coca-Cola brands to consumers and customers daily. According to the company, the purpose is uniquely theirs, and it’s the reason behind their existence. The purpose is needed now more; hence the corporation is thinking expansively in order to come up with ways to refresh people’s spirits and bodies. The company’s purpose is all about how the company’s business system refreshes the societies they serve in, reduces the footprint left behind while refreshing the planet, and how its bottlers develop, inspire, and refresh people to work with it.
Coca-Cola’s vision has always been to craft the choices of drinks and brands that people prefer to refresh their spirit and body. This will be done in ways that create a better-shared future and sustainable business that will bring a difference in people’s lives, the planet, and our communities. The three connected pillars include loved brands whereby the company develops brands that will be loved and enjoyed by people to refresh them. Another pillar is Done sustainably, whereby the company’s leadership will offer solutions that ensure a sustainable future and attain positive change. Lastly, a better-shared future is the last pillar whereby the company has invested to better people’s lives ranging from investors to employees. The behaviors that Coca-Cola Company focuses on include nurturing a culture that aims at refreshing the world and making a difference. Inclusivity, empowerment, and curiosity are some of the behaviors the company engages in. the company takes an expansive approach with a growth mindset on the possibilities while believing in continuous learning so as to better their business.
Brand Benefit Promise
‘Open Happiness’ has been Coca-Cola’s branding slogan for the past couple of years until recently when the multi-billion dollar corporation shifted and changed its slogan to “Taste the Feeling.” The chief marketing officer of the company Marcos de Quinto, changed the slogan so as to bring unity globally. This cohesive marketing strategy was used for the first time by co*ke for all the products. The beverage industry is moving forward, emphasizing health due to the rising rates of obesity and diabetes. However, co*ke is becoming resilient on sugary drinks, which places them under scrutiny and criticism. The logic that follows is that the associations to obesity and diabetes are interested in the ‘Happiness’ in their slogan. Emphasis on “Taste” shifts the consumer’s attention from the effects of the product and projects it to the product itself.
Shifting Coca-Cola’s slogan to ‘taste the feeling’ itself is a reminder to consumers that co*ke is a refreshment. When taking co*ke, the simple happiness is a return to co*ke and a shift from the philosophical indefiniteness. According to Adam Padilla, CEO of Brandfire, “Open happiness” made customers ‘feel something,’ but it got too philosophical when one drifts away from the product. However, ‘Taste the feeling’ creates a strong bond with the co*ke feeling and makes one develop the aspect of literally tasting it- the taste of Happiness”. The words ‘Taste’ and ‘Feeling’ have connotative powers of serving as a test of consumer possibilities. They reflect the five senses that appeal to customers; ‘Taste the rudimental sense relied upon by co*ke and ‘ Feeling’ which has both abstract and tactile connotations. While announcing the change in Paris, De Quinto stressed that co*ke is refreshing regardless of one’s preference or lifestyle. He also added that no matter why people want Coca-Cola, they will want a brand with a great refreshment and taste. Finally, he said that the change was supposed to rebrand the product in response to its critique.
Product or service performance
Since 1844 when Pembelton developed the Coca-Cola brand name, the company has developed its competitive advantage and survived over the years in the competitive industry. Its performance has been consistent, and the company’s strength supports the brand value. According to the first quarter of the 2021 performance report, Coca-Cola Company is performing well. The company’s strategic initiative progress report depicts that the company is focused on emerging the leading during this recovery period. The net revenues grew by 5 %, while organic revenue recorded a 6% growth. Comparable Currency Neutral Operating income (Non-GAAP) grew by 7%, while Operating Income grew by 14%. The comparable Operating Margin was 31.0%, rising from 30.7% in the previous year, while the Operating Margin grew from 27.7% to 30.2%. Comparable EPS grew to $0.55, which is 8%, while EPS declined by 19% to $0.52. The cash flow was $1.6 billion due to the positive performance of the business.
Association through Imagery or brand provenance.
Through Coca-Cola Imagery, people can develop feelings of freshness, the togetherness of friends and family on important occasions, thus making them hold important life relationships. co*ke’s sales are greatly affected by the brand image. Coca-Cola’s identity reflects one’s core essence and unique equity, which ensures brand identity and creativity that is sustainable and meaningful in the long run. Industrial positioning and sales have been affected by the Packaging changes though the new products have not affected the public. The company is taking advantage of the growth opportunities globally through its bottling system. Almost all people have heard about the name Coca-Cola. Since its inception, the company has created a reputable brand image regardless of geographical locations, sex, and age. The majority of people are including Coca-Cola soft drinks in their daily meals.
Brand Response
High Quality
Regulatory compliance, food safety, and quality are the pillars of Coca-Cola’s dedication to perfect and trusted products. Product quality is a vital part of the company’s proactive consumer feedback, manufacturing, and product design processes. Quality is ensured throughout the supply chain through the robust supplier requirement program. Standards of quality entail food safety, whereby it’s the mandate of the company to ensure safety standards for the produced and distributed products. Coca-Cola Company engages in quality improvement rather than that of the product through activities that impact the quality of objectives, responsibilities, policies, and their implementation.
Since the company’s inception, it has come to the realization that quality has given the company superiority. It was necessary to consistently maintain quality so as to meet customer’s preferences and tastes. In 1995, the Coca-Cola Quality System was developed to redefine the company’s quality requirements and environmental standards. The system was modified in 1999 to include Quality review, Quality planning, and Safety. Over the years of its introduction, TCCQS has aided the gigantic corporation to produce high-quality products, which are a source of their competitive advantage. The evolution of TCCQS is in response to the shifting of manufacturing practices that are set to ensure consumer satisfaction.
Relevance to consumer needs
The new Coca-Cola business strategy focuses on the consumer, convenience, and choices. The evolution of this strategy necessitates that the company transforms entirely into a beverage company that gives a variety of drinks that they want, including no or low sugar options. James Quincey explains that the development of the ‘Consumer-centric brands’ portfolio requires shifting the attention to what consumers want instead of what the company wants to sell. Consumers are demanding less sugary products or natural products and sometimes beneficial, and the company has responded well in availing them. In response to these demands, the Coca-Cola Company uses a multifaceted approach to satisfy their consumers, which include the provision of drinks with health benefits like nutrition and hydration, reduction of calories and sugars across numerous brands, expanding the availability of convenient and smaller packages that will enable people easily control sugar. In addition to that, the company provides easy-to-find and clear calorie information so that consumers will make suitable decisions.
According to the company’s CEO Quincey, investment towards making the next generation calorie-free sweeteners and rethinking some beverage recipes to minimize sugar are efforts that the company is making to put the consumer first. The company supports various recommendations by health organizations to minimize added sugar intake. Coca-Cola Company has invested more in building portfolio awareness of its no-and-low sugar drinks. The company has listened to consumers carefully, and it’s working to ensure that it continues to grow by firmly placing its consumers at the center of the business.
Superior to competition
Coca-Cola is the leading company globally dealing in beverages. The only rival of the corporation is Pepsi. The company’s success is based upon a number of factors like marketing, accessibility, pricing, and quality. Coca-Cola Company enjoys strong brand equity, which makes it superior to completion. It is popular and trusted globally hence achieving high net sales yearly. Another source of Coca-Cola’s competitive advantage is its pricing strategy. The competitive pricing makes the majority of its products accessible and affordable, giving the brand large access to a broader customer base around the world. Products are packaged suitably for various needs ranging from 2.5-liter family packs to 500ml. The larger the pack, the higher the savings. A large product portfolio that enjoys higher levels of popularity caters to customers’ preferences and tastes.
Marketing has greatly helped the Coca-Cola brand to remain superior in competition by building a strong image. Billions of dollars are spent yearly on promotions and advertisem*nts purposely to retain existing customers and attract new ones. The popularity of Coca-Cola Company makes the brand enjoy superior customer loyalty hence making it acquire market-leading positions. Intensified fight for customer acquisitions has been made possible by the growth in digital technology and increased competition. A large customer base makes the corporation enjoy higher revenues and sales, implying a better financial performance. Lastly, the focus on strategic human resource management gives Coca-Cola a competitive advantage. Career development, training for staff motivation, performance management, nonfinancial incentives, and competitive salaries has led to increased employee productivity hence fostering the company’s success.
Brand personality
The brand is seen as having a friendly and bubbly persona. Coca-Cola’s heart emphasizes on creating an intimate relationship with its consumers. Therefore, the company has designed its brand personality to attract its consumers’ interests and optimize intimate relationships. The brand is a perfect combination of excitement and sincerity, funneling honesty of sincerity and the cheerful joy through adverts and camp share like “share a co*ke.” Advertisem*nts used by the company create a relatable, touching, and motivational feeling that the public welcomes. Through embracing diversity and motivational promotions, the company promotes the benefits of cultural integration and world cooperation. In essence, the Coca-Cola Company wants to be that friend that you can depend on.
Coca-Cola’s brand personality is strong and distinctive, suiting the brand’s goals and ambitions. The powerful and strong personality communicates deeply with consumers hence stands out in making a difference. It enhances self-expression, increasing the chances of customers wanting to associate with you due to the positive things that customers can relate to. Brand personality is rudimental for relationships since it helps the brand develop customer loyalty. The company’s personality makes people perceive the brand as innovative and leading, making it possible for consumers to trust it whenever it comes up with a thought-leading and proactive perspective or introduces a new product. In addition to that, the brand personality helps in convincing and bring the brand to life. People trust the brand due to its personality hence differentiating it from a soulless brand.
Brand Loyalty
Attachment “Values”
For any brand to consistently stay top globally and survive, it must enjoy enormous customer loyalty for the brand. Coca-Cola has effectively attained brand loyalty through its core values that include Quality, diversity, Passion, Accountability, and Leadership. The company is committed in mind and heart through any activity it engages in. the company is all-inclusive hence the diversity of products availed for customers to choose from. The courage to design a better future makes and being real makes customers loyal to the brand. The company insists on quality whereby the slogan “what we do, we do well’ has some convincing power that attracts new customers and helps in retaining existing ones. The company’s core values describe how the company behaves in the world and serves as a compass for the company’s actions; hence, the company can pull a broader customer base.
The company’s operations model is built on local relationships that are based on community, service, and family. Coca-Cola is committed to higher quality standards in their market of execution, services delivered, and products produced. There are no shortcuts in production; hence standards are not compromised, leading to a wider fan base. The company’s goal to be an undisputed leader makes it strive for excellence so as to superceed expectations. Respect is served to owners, the environment, communities, customers, consumers, and the diverse team of associates, making it lovable to all people. All these values make the Coca-Cola Company enjoy great loyalty.
Trust “Transparency”
Commoditization of products by the internet can make it difficult for brands to earn customer loyalty. Therefore, brands like Coca-Cola have established genuine and shared emotional connections with their consumers by inspiring transparency and advocacy. Coca-Cola Company has achieved this through brand openness, product information accessibility, and proactive consumer education, enjoying more customer loyalty. Transparency is one of the ways that bring about customer loyalty which is instrumental to Coca-Cola Company as it seeks to retain its customers. Customer transparency implies that integrity and honesty prevail in all customer communications made by the brand. The company range does the communications from good news to bad news like running out of stock. Through transparency, the brand can keep its customers up to date by clarifying policies, sacred treatment of customer’s data, and notifications on improvements made to services and products.
The company’s ways to attain customer transparency include proper pricing, being honest about the collection of customer data, publishing company values, and endless communication with customers. It is easy to acquire Coca-Cola’s products’ information giving a good impression that there is nothing to hide when marketing. Caring about the consumer is a good way to build and sustain authentic consumer-brand relationships, which is exactly what Coca-Cola is doing. Customers need to be assured that their purchase decisions align with charitable or personal interests and are good for their families. Customer transparency has enabled the company to unify its business through the commitment made at every organizational level. An honest approach to all consumer contacts acts as a pledge that all members should emulate. Performance increases due to transparency, increasing satisfaction hence brand loyalty.
Engagement “Brand Community”
Coca-Cola Company has been leading in selling experiences and feelings instead of just beverages. The company’s marketing strategy that fosters loyalty has been tied to stronger customer engagement which has taken the company through difficult times. One of the recent engagement strategies that the company has used to retain its customers is the “Share a co*ke” campaign which saw people’s names placed on labels. The campaign saw the company engage its customers and retain them through personalization. Accompanying the campaign with music made it more memorable. Enhancement of the campaign through social media caused a ripple effect depicted by the increased young adult consumption and recorded sales.
The company recently brought super Bowl advertising to the world of virtual gifts and Facebook and recognized that customer’s love for the brand matters more than sales. Speech by Joseph Tripodi, Chief marketing and commercial officer co*ke, revealed that creating ads is the new philosophy to reach people’s emotions. This strategy enables Coca-Cola cola to determine moments and events where people can be engaged emotionally, turning them into money generators or brand love. Events include the Olympics and world cup, where it is one of the sponsors. Through the customer-centered approach, the company is able to focus on product placement, emotional engagement, and innovative ideas that make it to be loved by many. The world of Coca-Cola museums based in Atlanta is one of the ways that the company fosters engagement.
Connections ” Events, Endorses”
Coca-Cola Company has a history of sponsoring projects, organizations, and major events around the world. Olympic Games, NCAA, NBA, NASCAR, BET Network, Apple iTunes, and American idol are among the company’s well-known sponsorships. Since 1994, SpriteSprite, which is a product of Coca-Cola, has served as the official drink of the NBA. For more than 50 years now, the company has been involved in stock car racing. All the ten seasons of the number one rated television phenomenon American Idol have been sponsored by Coca-Cola, which has also partnered with BET Network. The sporting activities sponsored by Coca-Cola Company include Rugby world cups, Football and Wimbledon, and also sporting brands like Adidas.
The usage of the brand ambassador’s strategy by Coca-Cola has resonated with customers throughout the year. Examples of Coca-Cola-sponsored athlete endorsers include Lebron James, Alex Morgan, Jordan Spieth, Laurie Herandez, Kelley O’Hara, Denny Hamlin, Bubba Wallace, Joey Logano, and Amy Purdy others due to their social media following.
Conclusion
In conclusion, Brand equity is the value gained by a company through its products bearing a recognizable name in comparison with its generic equivalent. The development of brand equity goals which are essential in performance and progress tracking, is the best way to manage brand equity. Coca-Cola Company offers more than 500 brands as of 2020 across the more than 200 countries that it serves. The Coca-Cola logo acts as a trademark, and throughout the generations, it has remained fashionable. The company has effectively attained brand loyalty through its core values that include Quality, Diversity, Passion, Accountability, and Leadership. The usage of the brand ambassador’s strategy by Coca-Cola has resonated with customers throughout the year. The company continues to grow its brand daily by attending to consumer needs which means placing them at the center of its business strategies.
