Brand Audit Project – Coca-Cola

In an increasingly competitive business environment, organizations, particularly corporations, have to seek for ways to cope with the intensity of the competition or to get ahead of it (Gelder, 2005). Amongst other critical factors, branding has been used as a key strategic tool for enhancing the competitive ledge of corporations, and its applicability, though varying from organizations to organization, has been proven to almost always guarantee business growth.

Given the importance that branding has, it is an important strategic measure for organizations to carry out extensive brand audits to ascertain their level of competence in the market (Heding, 2009). This audit mainly focuses on the determination of the strengths and opportunities that a given brand possesses in comparison to its weaknesses and threats. A common trend for organizations has been to develop strong brands as a deterrence of the unfair competition that usually results particularly in markets where there is an excessive supply of close substitutes (Fioroni, 2008).

In the beverages and soft drinks industry of this country, for instance, there has been a historical battle for supremacy between two leading corporations – Coca-Cola and Pepsi – because both offer similar products. But it is the thin dividing line of product differentiation that each company has adopted which has set the two apart. This paper carries out a brand audit of the Coca-Cola brand to ascertain its competitive edge in the beverages market. The Coca-Cola Company
As a market leader in the beverage industry both locally and globally, the Coca-Cola Company has demonstrated its understanding of the need to have a brand audit for its numerous brands done because such an audit is an important informational and diagnostic tool which when used appropriately helps brand marketers to ascertain the overall state and health of their brands (The Coca-Cola Company, 2010a). Having such knowledge has in turn helped the company to outcompete most of its rivals, particular the second beverage maker globally – Pepsi.
The famous cola wars that pit these two giants have been specifically providing the impetus for the Coca-Cola Company to engage in more product differentiation so as to overcome this intense rivalry. Through a brand audit, the Coca-Cola Company has managed to steer ahead of the competition for it has been better placed to offer customers what they want as opposed to what the company wants fro them (Heding, 2009). The Coca-Cola Brand The leading brand of the Coca-Cola Company is the Coca-Cola drink which has been largely responsible for the company’s success in the market (Hays, 2005).
As the world’s leading beverage manufacturer and distributor, the Coca-Cola Company has used this brand as well as others to get ahead of the competition. While the Coca-Cola drink is the main brand, the company has many other brands that are distributed all over the world. As the world and the company’s leading brand as far as value is concerned, the Coca-Cola beverage is produced alongside concentrates of other beverages before they are further processed by licensed bottlers across the world (The Coca-Cola Company, 2010b). The Coke Brand
Although the Coca-Cola Company has been widely using the Coca-Cola brand, it has many other brands which are in response to market demands (The Coca-Cola Company, 2010a). In the recent times, the company has been expanding the use of its Coke brand name and a number of revolutionary products have appeared in the market under this brand. They include Diet Coke that has recently become highly ranked as a major diet cola; Diet Coke Caffeine-Free; Coca-Cola Zero; Cherry Coke; and Vanilla Coke. In addition to these brands, the company has been developing beverages with different flavors so that customers can be lost for choice.
For instance, there are special Coke brands with coffee, lemon, and lime flavors (Harford, 2007). Brand Inventory In order for any company to be in a position to understand the position it holds in the market as far as its products are concerned, it is critical that a profiling of its main brands is conducted. For the Coca-Cola Company, its brand inventory has been a continuous process and a source of invaluable information about competition and customer preferences. The marketing of Coca-Cola has been determined to be very successful owing to the brand’s success in the market.
This is even after the Coca-Cola Company introduced the other products under the Coke brand. For a long time, the Coca-Cola brand has been the most valuable of the company’s brands and this has been attributed to the constant appraisal that the marketing team of the company conducts about it as opposed to its superior quality. As such, the Coca-Cola Company has been able to understand the basis upon which the perceptions of the customers are based on from time to time (The Coca-Cola Company, 2010a). At one time, the inventory revealed that product quality was very important for customers.
But when competitors began offering similar beverages, it became clear to the company that quality alone would not suffice to distinguish its products (Pendergrast, 2000). With the cola war between the Coca-Cola Company and Pepsi growing fierce each passing day, the Coca-Cola Company has had to carry out a brand inventory more often. The findings have been compiled in not only verbal form but in visual forms as well because what is observed as customer behavior and reactions has been no less important than what is actually expressed by word of mouth.
The company has been able to develop a concise description of its main brands and the relative marketability of each brand based on these visual and verbal outcomes. One notable feature about the Coca-Cola Company’s brands is that there has been less concern about the quality. Instead, a lot of emphasis by customers has been placed on aspects like packaging, flavor, and convenience (The Coca-Cola Company, 2010b). Prior to the introduction by the company of plastic bottles that could be taken away, customers seemed to be bothered with the glass bottle that had to be returned to the vendors.
This has since changed and now there seems to be a concern about quantity or pack size especially in the developing countries where pricing is an issue (The Coca-Cola Company, 2010b). To appeal to different people with different income levels, the Coca-Cola Company introduced different quantities of its main Coke and Coca-Cola brands. For instance, the Coca-Cola beverage comes in the mini pack size, the 300-ml bottle or can, as well as in quantities of 500 ml and 1000 ml. Different quantities are sent to different markets as determined by the demand there.
In Africa, for instance, the company’s main brand that gets the most sales is the 30- ml one while in Europe the 500 ml Coca-Cola beverage is sold the most (Hayes, 2007). As far as climatic conditions are concerned, the Coca-Cola Company has been able to establish that customers are not able to use certain packaging material comfortably in certain seasons. For example, participants in games such as the Winter Olympics find the glass-bottled beverages rather difficult to handle given the extremely low temperatures (Pendergrast, 2000). In response to this, the company introduced special aluminum bottles for such events.
These bottles are warmer and generally less susceptible to climatic changes. For instance the Vancouver 2010 Winter Olympics Torch Relay had these kinds of bottles used both for the convenience of the users as well as for marketing purposes (The Coca-Cola Company, 2010b). The idea to use aluminum bottles has also been as a result of the concerns that people around the have about climate change and global warming that have necessitated the need for a reduction in the use of packaging material with a high carbon footprint such as glass and plastic bottles (The Coca-Cola Company, 2010a).
The company also has brands that are free from caffeine so that the health-conscious customers can benefit from such. Another critical consideration by the company has been color. Different brands come in different colors for different reasons. For instance, Sprite, a colorless beverage, is packaged in green bottles to make it more attractive while the main Coca-cola brand that is colored is packaged in transparent glass bottles for the same purposes (Pendergrast, 2000).
Brand Exploratory The need to have an understanding of what customers actually want as opposed to what the marketer has for them is a critical one because failure to respond to customers’ needs can bring about a shrinking of the market. In view of this, the Coca-Cola Company has been increasingly seeking to design brands that are capable of meeting the unique needs of its customers who, being scattered across the globe, have different tastes and preferences (Pendergrast, 2000).
The company has had the understanding that the customer is the key determinant of its success in the market and has adopted a policy of getting feedback from them in order to understand their perceptions about the different brands in the market. Market segmentation has been done by the company to be able to understand the needs of individual customers. Markets in the tropics are served with specially refrigerated beverages made with the high temperatures under consideration (The Coca-Cola Company, 2010a).
One critical finding about the company’s brands is that they have been able to penetrate rather easily into even the most hostile markets like in Russia, China, and the Middle East (Pendergrast, 2000). Traditionally, it has been easy for the company to sell domestically but with rapidly expanding global demand stemming from the company’s focus on developing customer-specific brands, the company has had to expand almost indefinitely. Today, it is common to find a Coca-cola booth in a remote village in Africa or by the beachside of the Black Sea.
This is just a demonstration of how far the Coca-Cola Company has been able to use brand exploration to its benefit (Pendergrast, 2000). Data Mining The Coca-Cola Company has developed a marketing strategy that mainly focuses on an understanding of the behavioral characteristics of customers (Keller, 2003). Through an investment in the collection of statistics about the market response to its brands, the Coca-Cola Company has managed to divide its global market into segments which can then be served.
Each segment has its own unique needs and every time these needs are met the company has benefitted from the resulting loyalty that these customers develop in these brands. On successive purchases, such customers just go seeking for the products they have been using. The Coca-Cola Company has had to understand the customers that it actually appeals to and with which brands. For instance, through data mining as part of the brand exploratory process, the company has come to realize that age is a critical factor in the determination of acceptance of a given brand.
For instance, the elderly in society prefer the beverage in the traditional contoured bottle that is also a brand of the company (Pendergrast, 2000). However, young people are more comfortable with the canned beverage which they can carry around and consume whenever they feel thirsty. Perhaps because the young move about more frequently than the old, they want a package that will not keep them grounded in one spot. The elderly, on the contrary, seem to have the time to use the beverage at home more leisurely and then get the bottle back to the vendor (The Coca-Cola Company, 2010a).
To appeal to customers who are so much concerned about flavor, each of these Coca-Cola and Coke brands comes in different flavors. As a beverage, Coca-Cola finds use at different times of the year and the provision of complementary commodities alongside it has been determined to be a key method in enhancing the marketability of the beverage. For instance, the Coca-Cola Company has noted over time that public events of all nature tend to filled with people who might need to be refreshed. As such, the company’s different brands come with refrigeration facilities to ensure the brands retain their taste and flavor in all seasons.
They also provide branded chairs, tables, tents, and other accessories which people might need when using its brands. Customer Relationship Management The interaction that takes place between the marketers and the customers is very critical to the Coca-Cola Company (Neumeier, 2006). The company’s staff has been engaged in the overall branding strategy, where they particularly offer their assessments of what they believe is happening in the market. As a company that highly appreciates its staff, the Coca-Cola Company has been using these views to plan its marketing strategy using the brands.
For instance, the most popular brands have been used to serve new markets with the main aim being to win over a large segment of the market in a shorter time. Ethnographic approaches are also used by the company to understand consumer behavior. It has been established that pet bottles were introduced only after the realization by the company that some clients were not comfortable with the enormous size of the contoured bottles (The Coca-Cola Company, 2010b). Some customers, it was found, just wanted a variety of all forms – including the appearance of the bottle.
The company, therefore, responded by changing not only the shape but the material as well (The Coca-Cola Company, 2010b). Still, the company employed the use of qualitative research methodologies like projective techniques, word associations, brand personification, visualization, and laddering to discover that the bottle cap was undesirable by some people who found themselves without appropriate equipment to open the caps. The introduction of the tin cans partly addressed this concern. Besides, the plastic bottles are fitted with caps that can be easily removed unlike the caps on the glass bottles.
In addition to this, the company has been distributing bottle openers bearing the company logo so that such concerns can be dealt with. These bottle openers can be easily carried around as they are also designed to work as key-holders (The Coca-Cola Company, 2010b). The combination of preliminary research findings and actual qualitative research has been beneficial to the company in several ways (Kapferer, 2008). First of all, it has ensured that there is a good relationship between the company staff and the customers whose loyalty has tended to grow as more of their concerns have been addressed by the company.
Secondly, the company has been in a position to ascertain the extent to which certain information has been true and so decide whether or not such information could be acted on. This is largely because preliminary findings, particularly as presented by staff, tend to be very diverse, making it difficult to prove their authenticity (The Coca-Cola Company, 2010b). Actual researches conducted in the market have been useful in the setting apart of false impressions from true customer concerns. Brand Equity
The value of the Coca-Cola brand to the Coca-Cola Company cannot be overstated. Today, Coca-Cola is a household name in many countries around the world (Pendergrast, 2000). Sometimes it is even difficult to tell that other brands of the company like Sprite and Fanta actually exist as they have all come to be commonly referred to as Coca-Cola. And from this one brand, the company has been able to benefit a lot in its sale of other brands. The presence of the Coca-Cola trade mark or that of Coke has been enough to attract demand for the product.
The brand equity of Coca-Cola has been measured on three levels and for each of these levels it has been found that the brand is of positive equity (Ailawadi, Donald & Scott, 2003). The first level is that of the firm where the value of having the Coca-Cola Company as the sole manufacturer and distributor of not only the Coca-Cola beverage but others as well has been determined to be very high. The Coca-Cola Company has been able to measure the brand equity as a financial asset (Grannell, 2009). Usually, Coca-Cola is not a real or tangible asset but since it adds value to the overall worth of the company it must be an asset as well.
Therefore, measured as an intangible asset, the value of the tangible assets of the company has been subtracted from the overall value of the company as determined by the company’s market capitalization (Chu & Hean, 2006). The different is the Coca-Cola brand equity. The second level has been the product level where the branded Coca-Cola has been compared with the non-branded one. It has been ascertained that when products are found not to bear the Coke or Coca-Cola brand name they are less likely to be bought than when they have the brand name. This is partly because there is suspicion by customers that unbranded products are not genuine.
So branded products sell more and have higher brand equity (Ailawadi, Donald & Scott, 2003). Finally, the consumer level measures the awareness that consumers tend to have regarding the Coca-Cola brand. Whenever the brand name is missing, there has tended to be a shunning of the products by consumers. The Coca-Cola Company has been carrying out extensive research to ascertain such market trends as consumer behavior. Now there is an understanding that the Coca-Cola brand holds the key to the company’s continued market expansion throughout the word (Ailawadi, Donald & Scott, 2003). Conclusion
Brand auditing is a very critical strategic tool that can be used to enhance a company’s competitive advantage in any given market. This is because a brand audit not only makes available to the company information about the preferences and perceptions of the customers but also helps the company to assess its brand equity based on the relative value of its non-tangible assets. For the Coca-Cola Company, its Coca-Cola brand has been highly successful in the market and its brand equity is very high. Used alongside the Coke brand, the Coca-Cola brand has managed to help spur the company to the position of global leader in the beverages industry.
The company uses various approaches and strategies to gather information about its customers as well as to profile the performance of its main brands on the market. What has been a regular practice at the company is the speed with which it has been moving to act on the information it receives and verifies about customer perceptions. This has made many customers to develop trust in the company’s products so much so that it is difficult for any brand to be purchased unless it bears the Coke or Coca-Cola mark.
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