Brand Audit at Coca Cola - Essay Example

?Coca Cola: Brand Audit Introduction The Coca Cola (commonly known as Coke) is an international carbonated soft drink brand headquartered at Atlanta in United States. Originally, Coca Cola was invented in the late 19th century by John Pemberton for the purpose of using as a patent medicine. Later, the businessman Asa Griggs Candler purchased Coca Cola. Candler’s expertise in marketing played a central role in placing the Coke brand on the top of the world’s soft drink industry throughout the 20th century. Under the Coke brand name, the company introduced numerous other cola drinks such as Coca Cola Vanilla and Coca Cola Cherry. As Mayer (2003, p. 27) points out, currently the company operates in over 200 countries, and restaurants, stores, and vending machines are some of its major product distribution channels. The Interbrand’s best global brand 2011 rated Coke as the world’s most valuable brand. Brand development decisions Coke’s brand development decisions over its corporate life have contributed to the brand’s global presence and market image. While analysing the firm’s corporate history, it seems that Coke maintains its brand image by means of communications focused on the product’s supreme quality; and it also keeps close associations with celebrities, film stars, and sports events (Keller, 2000). In the United Kingdom, Professor Green is the brand ambassador of Coca Cola. Coke brand image is also enhanced by its worldwide distribution network and high level customer loyalty. As mentioned earlier, Coke has extensive retail distribution channels including super markets, kiosks, airlines, clubs, bars, restaurants, hotels, and vending machines. Coke follows two types of distribution strategies namely distribution pull strategy and distribution push strategy. As Pearson (2008) describes, under the distribution pull strategy, retailers receive product requests from customers and pass them to wholesaler; then, the wholesaler places order with his/her regional producer and subsequently the ordered product is delivered to the customer. The distribution pull strategy directly promotes Coke products to customers. As Elberse and Eliashberg (2003) reflect, in case of distribution push strategy, the producer promotes the Coke brand directly to retailers and delivers products to retailers through wholesalers; finally, retailers promote the product to customers. Hence, consumers find no difficulty in purchasing Coke products from any part of the world. This brand development decision has assisted the management to ensure uninterrupted supply of Coke products all over the world and thereby meet consumer interests. Undoubtedly, Coke’s elaborated distribution network has significantly benefited the brand to gain an edge over its main competitor Pepsi (Luo, 2000). Coke’s management promotes and distributes Coke products through its website with intent to take advantages of E-commerce business facilities. This practice helps the brand to make its products easily available to consumers across the globe. Coca Cola, the most recognized soft drink brand in the world, is undoubtedly the firm’s most significant source of brand equity. Earlier, the brand focused on three major aspects such as affordability, availability, and acceptability. However, customer needs and business trends have dramatically changed over the last few decades and therefore Coke has transferred its focus to price value, preference, and pervasive penetration. As part of building brand identity, Coke tests nearly 20 brand attributes every month involving over 4000 customers. This strategy greatly aids the brand to keep in line with consumer demands. Evidently, Coke’s innovative brand development decisions have greatly assisted the brand to keep in pace with the changing customer interests. Marketing Mix (4P) In addition to the above stated factors, Coke’s marketing mix structure has also played a notable role in positioning the brand on the top of the world’s soft drink industry. Product As noted earlier, a wide range of products is marketed under the brand name Coke. Generally, beverages are divided into several categories such as diet group, water, energy drinks, 100% fruit juices, fruit drinks, coffee, and tea. The brand specifically focuses on various quality attributes of its products so as to ensure that it offers competitive product categories to its customers. As Vedwan (2007) reports, Coke is one of the well popularised trademarks and it is recognised by over 90% of the world’s population. As compared to its competitor products, Coke products are well known to consumers and hence the company does not take much effort to promote the sales. Price Coca Cola adopts a distinctive pricing strategy to increase its market share (Golan, Karp, and Perloff, 2000). Since the brand offers a wide range of product categories, its pricing policy is greatly dependent on the nature of markets and geographic segments; and the Coke prices may also depend upon whether the product is purchased from a fast food restaurant, fine restaurant or a vending machine (ibid). The brand also adopts a seasonal pricing policy. To illustrate, the brand increases its vending machine soda prices during summer with the help of wireless technology and lowers the price when the rainy season begins. This varied pricing strategy has greatly assisted the brand to effectively meet the interests of different customer groups and market segments. Place Currently, Coke has its presence over 200 countries around the globe. The brand does not avoid any market segment based on economic development as it does not offer any highly expensive product. The FMCG distribution pattern enhances Coke’s product distribution activities all over the world. The global distribution network has greatly benefited the brand to capture even rural market segments and erode intermediaries. Evidently, by avoiding intermediaries, Coke can cut down its operating costs. Promotion Coke adopts several advertising and promotional techniques to increase the market demand for its products. It mainly focuses on people’s life style and behavioural traits before developing promotional policy for a particular market segment. As Foster (2007) points out, Coke mainly follows a value based advertising approach. Corporate social responsibility is a key tool of Coke’s promotional policy. Market surveys indicate that Coke’s innovative promotional techniques play a vital role in attracting new customers. Recommendations Coke brand audit reflects that it is a well reputed brand with significant equity. However, the brand still has many growth opportunities. Firstly, it is advisable for the company to focus more on online promotion strategies since majority of people today browse internet at least once a day. It is possible for the company to generate a notable portion of sales revenues from internet. The company has to frame effective operational strategies to enter new rural markets which are still unutilised. It is recommendable for Coke to concentrate on its existing products’ quality attributes rather than introducing more product categories. Finally, the brand has to keep pace with changing market trends and customer needs. CBBE model The Customer Based Brand Equity (CBBE) model provides a company with unique point of view regarding how to build a strong and sustainable brand enjoying high brand equity (Keller, Parameswaran, and Jacob, 2011, p. 48). The following diagram represents the CBBE model analysis of Coca Cola. Salience: - It is the first option a consumer consider when he/she is thirsty Performance: - Undoubtedly, Coca Cola performs better than any other soft drink brand. It has achieved the world’s most valuable brand rating recently. Hence, Coke is the best choice available at any part of the globe. Imagery: - The brand has been a sponsor of Olympics since 1928 Amsterdam Olympics. In addition, the company has achieved a luxury image through the sponsorship of major sports events like World Cup Football. Judgments: - Coke is judged as the best soft drink in the world over its competitors including Pepsi. The company’s quality standards and package efficiency are also viewed superior. Feelings: - It maintains worldwide presence and high social status despite some quality issues in some of the market segments. Coke is also a provider of improved social responsibility programs. Resonance: - High level of customer loyalty and social approval. Majority of US people consider Coke as a necessary household product. Repeat purchase rate is very high. The CBBE analysis indicates that the pyramid is equally strong on both left and right hand sides. In addition, the pyramid is also strong from bottom to top. Hence, the brand enjoys high level brand awareness, repeated purchase rate, and customer loyalty. Mental map The mental map is used to illustrate an individual’s personal view point regarding a particular brand. In other words, this model helps one to identity from what perspectives an individual consumer evaluate a particular brand. Mental map of Coca Cola is depicted below. 1. History Long and well established firm Market dominance throughout the 20th century Long market experience 2. Business Diversified product portfolio Global presence Strong distribution network Highly developed manufacturing facilities Fierce competition Pepsi, Coca Cola’s largest competitor Olympics sponsorship 3. Opinions Well recognized brand Favorite drink of millions of people Supreme quality and taste High level of social responsibility 4. Experience Sweet Refreshing Fizzy Cold Red Iconic 5. Product Most valuable brand An FMCG product Extensive product lines Conclusion From the above discussion, it is clear that the Coke is one of the world’s well recognised brands and has higher brand equity. Coke’s brand development decisions have notably contributed to its global presence and reputed market image. In addition, the brand’s marketing mix structure also played an inevitable role in making the Coke one of the leading brands in the world. Finally, the CBBE model and Mental Map point to a potential future for the Coke. References Elberse, A and J. Eliashberg. 2003. Demand and Supply Dynamics for Sequentially Released Products in International Markets: The Case of Motion Pictures. Marketing Science. 22 (3). pp. 329-354. Foster, R.J. 2007. The Work of the New Economy: Consumers, Brands, and Value Creation. Cultural Anthropology. 22 (4): pp. 707-731. Golan, A. Karp, L.S and J. F. Perloff 2000. Estimating Coke's and Pepsi's Price and Advertising Strategies. Journal of Business & Economic Statistics. 18 (4): pp. 398-409. Keller, K.L. 2000.The brand report card. Harvard Business Review. [online] Available at http://www.training-vanzari.ro/wp-content/uploads/2008/11/Brand-Report-Card.pdf [accessed 4 June 2012]. Keller, K.L., Parameswaran, M.G and I. Jacob 2011. Strategic Brand Management: Building, Measuring, and Managing Brand Equity. New Delhi: Pearson Education India. Luo, Y. 2000. Dynamic capabilities in international expansion. Journal of World Business. 35 (4). Pp. 355-378. Mayer, F. (2003). The Death of the Brand? Challenges Facing International Brands in the 21st Century - An Analysis with Examples and Recommendations. Germany: GRIN Verlag. Pearson, M. 2008. Prioritizing Edge over Node: Process Control in Supply Chain Networks and Push-Pull Strategies. The Journal of the Operational Research Society 59 (4) April. pp. 494-502. Vedwan, N. 2007. Pesticides in Coca-Cola and Pepsi: Consumerism, Brand Image, and Public Interest in a Globalizing India. Cultural Anthropology 22 (4). pp. 659-684. Read More