Brand Equity of Coca-Cola - Case Study Example

Brand equity of Coca-Cola Introduction and background of the project The concept of brand equity is traced in the early 1990s, and it was not well defined. However, it argued that a brand was a financial asset that was recognised as such by company management as well as in the financial markets. Brand equity encompasses not only the value of a brand but also, other components of the product such as patents, manufacturing expertise and trademarks. Even though, the brand equity represents a company stock price when the brand has a trouble, any change or shift in the brand equity can affect the stock price significantly (Chieng & Lee 2011). This study shall assess what may happen to the equity brand of the coca-cola company if the name is changed. In general, the study shall identify if the consumers shall embrace the other product that is new in the market that is produced by Coke Company. The historical evolutions of different brands have shown that a brand serves the role of differentiating most competing items, as well as representing a consistency in the provision of the quality product. Brands may consist of generic, potential and augmented levels according to the consumer’s satisfaction. At the generic level is when a product meets the consumer’s primary needs whereby the product is designed to satisfy specific target, fair price and has high functional capabilities. With the continuous use of the product, the consumers become much used to it thus warrant augmentation in a more elegant way to satisfy emotional and functional needs (Alamro & Rowley 2011). Augmentation of a product may make the brand achieve its full potential level, which is brand equity. Brand equity varies in the amount of value and power they possess in the marketplace, but they succinctly reside in the consumers mind. Since coca cola company is one of the leading beverage producing company, I am interested in assessing how their equity value and equity brand trends among different consumers of their products (Whan Park et al. 2010). Several companies continue to provide various goods and services to suit their customers’ needs, by innovating new feature, colour and design of the product. Their main goal of doing this is to ensure that their products have a high brand value while in the market. In the beverage, industry Coke and Pepsi Company have been battling for brand value in different countries globally. Due to the competitiveness of these companies, several products have been released in the market with different taste and features to attract consumers to their products (Qu et al. 2011). Coca-cola Company has produced several brands in the market such as Cherry Coke, Diet Coke, Dasani, and PowerAde among other products. It may be assumed that the coca-cola company has established its brand value, but it may only be one product that the consumers enjoy while dislike most. Occasionally some people have stated that some products of coke are not better off compared to other company’s product, for example, the energy drink Gatorade from Pepsi and Powerade from coke. This research shall try to check out how the brand equity of coca cola is in the market in relation to its different products (Kim & Ko 2012). Preliminary literature review Brand equity is the value that a commodity posses in the marketplace, therefore, it can be stated that a commodity with a high equity brand has a high value in the marketplace. A product with high brand value and equity can create a more positive differential response in the competitive market. This means that such a brand can easily be recognised when in a yard or an advertisement. Similarly, a high brand value can easily be recalled when there are other relevant prompts. Brand equity is an intangible asset, which means that it cannot be accounted for quite easily since it merely lies in the mind of the consumer (Nam et al. 2011). Several authors have described brand equity in terms of components of the broad brand knowledge. Brand equity has got several components, which include brand awareness, brand image, brands perceived quality and brand loyalty. Keller (2006) viewed brand equity by utilizing an associative memory model that focussed on brand knowledge incorporating brand awareness and brand image, which were described as a full set of brand association. Utilizing this concept of brand equity, the manager main aim is to create and awareness of a brand, then proceed to build on the foundation to craft a salient image that is composed of several positive facts about the brand. One of the major typical tools used to enhance branding is the choice of the advertising budgets that include media, packaging, pricing and messages on the product. Good management of the elements mentioned help to enhance awareness level among the target group and proper creative activities may incorporate a brand identity in the mind of the consumer (Wang 2013). A study conducted by Thomas et al. (2014) evaluated how brand preference affects the threshold for perceptual awareness. The authors argued that, brands carry value with them and the value can infuse the product to get a brand associated with it. At a personal level, a brand is linked to a particular value and learning it can have conscious and unconscious element. Seeing a physical or tangible representation of a brand such as logo or name may evoke the value by influencing the affective system of the brain; moreover, even an unconscious presentation of the brand may bring such responses. The researcher hypothesised that “the brand name for which the subjects have either negative or positive preference have a higher likelihood of consciously perceived, compared with brands for which the subject has a natural preference.” 49 participants who were positioned in front of a computer carried out the study. Each participant was sequentially shown brand names on the screen and were asked to rate their brand preference using a 7 point Likert scale. The participants were later shown the brand names and they were to report the clarity of their perception by adhering to perception awareness scale. The statistical analysis showed that model was significant (p < 0.0001). It was found that stimuli with either negative or positive preference produced a stronger response. The researcher concluded that subjective preferences have a more substantial chance that information linked with a brand influence a customer’s choice. This study shall play a vital role in my research since it provides me with the insight of how the brand name has an impact on brand equity of a product. It is evident from the literature that those brands that either have positive or negative impact on a consumer have high chances of being remembered. A study conducted by Huang (2014) aimed at identifying if there is a correlation between marketing action, price promotion and advertisement in relation to customers mindset. Brand equity is a concept that reflects previous investments of a company to a brand. Even though, the customer’s mindset directly measures the impact of brand building actions such as knowledge, the measure of the brand market performance provides an indirect assessment of the knowledge. The consumer mindset was measured from costumer-packaged goods. There were statements that were measuring the image, performance and feelings of the brand. The statements described how a customer feels of a particular brand. For example, brand performance assessed the effectiveness as well as the reliability of a product. If the participants were to agree with the parameters, they were to tick a yes box. The result was that brand equity was stable and there was a correlation between consumer mindset (p < 0.0001). This finding was interpreted that as long as brand equity is built, it shall prevail as long as the conditions persist. It means that those brands that had established themselves with high brand equity shall continue to enjoy from their past investments in the market even if the company reduces the advertising support. The research showed that there is a correlation between brand equity with prices, whereby those products that are highly priced were having high brand equity and were performing well in the market. The study has made a significant contribution to the contemporary literature by testing brand equity consequences on the market. The author recommends that future studies should focus on those categories that have several new products in the market. In essence, this paper shall be useful in my study since it has explained several variables that affect brand equity. Yoo (2014) conducted a study on branding potentials of keywords search Advertisements. The author stated that search engines are important tools for finding information or doing shopping online, and the search engines majorly utilised include Google, Yahoo as well as Bing. However, these search engines provide different results when used. Keyword search is nowadays a basic business model employed by several search engines to display results organised on priority. This approach allows several advertisers to reach many targeted consumers at low cost. The objective of the study was to examine how ranking of keywords may influence the online users cognitive and evaluation of brands that are not known. Keyword search Ads is a paid link that is based on the auctions outcomes of the internet, where the highest bidder receives the highest ranking. Prior studies have revealed that the order sequence of displayed information may influence the consumer’s decision-making. Moreover, majority of the consumers were seen to pick the information that is at the top of the list. However, minimal research has been done to investigate the role of Ads ranking in memory of the consumer of the unknown brands. The research employed experimental study design, which incorporated 95 subjects in a computer lab over a three-week period. Google search results page were mimicked and the participants were asked to key in keywords search Ads of three well-known brands and a single target brand. Targeted keyword search Ads for the unknown products were ranked first on the search engine dialogue box. The results showed that most of the respondents correctly recognised the unknown brand (62.1%) while a minority (31.5%) recognised the targeted brand correctly. The author concluded that online users are primed to use the first brand they see in the list despite having no knowledge of the brand. The findings of the study provide a theoretical framework and some practical information that may edify the keyword search in advertisements. In addition, the research brings priming theory in the field of online advertisement. The majority of individuals that utilise online search engines tend to have specific goals and most of their search objectives are distinctly reflected in phrases or keywords. Therefore, it is imperative for managers to understand significantly online consumer’s motivation to query specified phrases and select the most appropriate keywords to link to their advertisements. In doing so, several companies and advertisers shall create a proper set of desired outcomes with the brand in the mind of the targeted population. The author proposes that another study should be done with the actual click in a field experiment setting. This research study shall be very vital in helping my study to understand how coca-cola has branded it products online. In addition, it shall be of help in my study since I shall interrogate consumers who do online shopping of how they chose their beverages based on the competitive nature of the business. Several levels of brand awareness exist depending on the ease in which the consumer can recall the brand. Aid recall is one of the methods of brand awareness; this is achieved through advertisements, verbal and other promotion modes. Aid recall is low-level brand awareness since it needs an individual to remember a product and does not give a chance to the customer to make the choice by itself, since an individual may not generate the picture of the product. However, in the consumer classic behaviour model, the consumer recognises a problem and perform a search of a product thus use unaided recall to generate several products, this increases brand awareness. Keller (2006) argues that after creating brand awareness, the next step is for the manager to instil positive associations in the consumer mindset. The author defined a brand image as the perception about a product as demonstrated by the brand association in the memory of the consumer. In addition, some aspects of the brand image may affect different consumer responses, and they include favourability and uniqueness of the brand association. In essence, a positive image is very imperative in defining the target audience as well as measuring the market audience. Favourable brand associations usually occur when the customers have a belief that the brand contains attributes and several benefits that are going to satisfy their needs (Hoyer & Brown 2010). Research questions What is the brand equity of coca-cola in the market? How does brand equity help coca-cola? What are the recommendations to coca-cola to improve its brand image? Research objectives To assess the brand equity of coca-cola in the current market To explore how brand equity helps coca-cola To assess the gaps coca-cola has in branding its image Research methodology Study design This will be a descriptive, cross-sectional study, which will be carried out among four big supermarkets. The study shall utilise descriptive and cross-sectional study design because it involved establishing of information concerning the components of Brand equity of coca-cola. The major advantage of using this study design is because descriptive study design helps to determine and report the reality on the ground and fully describe possible behaviour, attitude, values and characteristics of the respondents. Cross-sectional study design helps in ensuring that adequate population is incorporated in the study (Nieveen et al. 2006). Study population The study population focused on both genders above 18 years of age. This is because they can respond well to the questionnaire and they have their autonomous legal rights. The population targeted will be one hundred and fifteen people. Sample size determination Fishers’ formula will be used to calculate the minimum sample size. Formula: n=desired sample size (target pop ≥10 000) Z=standard normal deviant at the required confidence level (1.96) p= the proportion in the target populations estimated to have particular characteristics being measured 50% q=1-p d = precision level set at 0.05 p = 50% Z = 1.96 d =0 .05 q=1-0.5=0.5 n = (1.96)2 (0.5) (0.5) (0.05)2 n=384 nf =desired sample size when the population size is less than 10,000 n =desired sample size when the population size is more than 10,000 N =estimate of the population size =115 nf =384/ (1+384/115) nf = 88 nf = 88, Therefore, 88 participants will be sampled. Inclusion criteria All men and women above the age of 18 years All men and women above 18 years consenting to participate All men and women above the age of 18 years present in the study area Exclusion criteria All men and women outside the study area All men and women above 18 years with no consent to participate in the study All men and women absent during the study period Instrument A structured self-administered questionnaire will be utilized to collect data. A pen will be used to fill in the questionnaires. This research instrument shall contain open ended and closed ended questions, which are designed to cover the components of brand equity of coca-cola. The questionnaire will be given to the identified literate respondents in the target area after obtaining their informed consent. In addition, other case studies shall be analysed to answer the research questions and meet research objectives. Data collection procedure Data will be collected for three days in a week. The research assistant will go to identified supermarkets to administer the questionnaires to the respondents. Questionnaires shall be administered only to those who give consent and shall be expected to return them after duly filling. The researcher will carefully explain to the respondent on how to fill in the questionnaires and any concerns addressed. Validity and reliability of the instrument Validity is the extent to which correct inference can be made based on the results obtained from the study. It is described as the agreement between the reality on the ground and researchers result. The items in the instrument shall be revised and improved as per the suggestion of the experts. This research shall adopt the content validity and use it to measure the validity of the tool used in collecting data (Rosenberg et al. 2010). Reliability of a research tool is the measure of what extent a research instrument provides consistent result after repeated trials in the study. Therefore, pretesting of data collection tools for accuracy and relevance of questions will be done among people who are not part of research subject before the actual exercise begin. Data management and analysis The data gathered shall be processed in a stepwise approach, which will start by data cleaning to ensure no incomplete questionnaires are analyzed. The complete questionnaires will be coded or categorized for easy handling. The coded data will be entered into a computer as a backup to the hard copies. The hard copies shall be filled with reference numbers and stored in a safe place for later use or reanalysis. Data analysis shall be done by use of SPSS and Microsoft Office Excel. The quantitative data will be presented and displayed by use of graphical representation in the form of tables, bar graphs and pie-charts and qualitative data in a narrative form (Carver & Nash 2012). Ethical considerations Before data is collected, permission will be obtained from the university ethical committee. Participants will be given oral instructions and the purpose of the study will be explained accordingly. The respondents shall provide informed consent after explaining to them the purpose of the study and allowing them to sign a consent form. Confidentiality and respect shall be maintained throughout the research process, the respondents shall not be allowed to write their names on the questionnaires instead numbers will be used for identification of the questionnaires. Feedback shall be given to those participants who will be interested in obtaining them. Limitations of the study The period for the dataset is short and this may not cover some mindset regarding Brand equity of coca-cola since it takes a long time for some of the customer’s concepts to the surface. Therefore, a recommendation is made for further research. The study cannot cover all the parameters regarding brand equity, therefore, further research is needed to fill in the gaps in this study. List of reference Alamro, A. & Rowley, J., 2011. Antecedents of brand preference for mobile telecommunications services. Journal of Product & Brand Management, 20(6), pp.475–486. Carver, R.H. & Nash, J.G., 2012. Doing data analysis with SPSS version 18.0, Chieng, F.Y.L. & Lee, G.C., 2011. Customer-Based Brand Equity : a Literature Review. Journal of Arts Science & Commerce, II(1), pp.33–42. Hoyer, W.D. & Brown, S.P., 2010. Effects Common , of Brand Awareness on Choice for a Product Repeat-Purchase. Journal of Consumer Research, 17(2), pp.141–148. Huang, R., 2014. Assessment o f brand equity measures.interntional journal of market research, 56(6), pp.783-806 Keller, K.L., 2006. Measuring brand equity. In The handbook of marketing research Uses misuses and future advances. pp. 546–568. Kim, A.J. & Ko, E., 2012. 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