Coca-Cola Brand Equity Model Analysis

Table of Content

Brand Asset Valuator Model : In the BAV Power Grid, CocaCola will be placed among the companies which are leaders with high earnings or high potential. We may look at the position of CocaCola in the market with respect to the following parameters :- Differentiation : This measures the strength of the brand’s meaning. CocaCola, to maintain the differentiated product that it aims to achieve invests 20% of its advertising budget on its differentiating strategy. It has also positioned itself in the market in the following ways :-

· Corporate reputation for quality and innovation. Successful communication of perceived strengths of the product. · Symbol of fun and enjoy. In differentiation, we can look at the strategy of CocaCola against its chief rivals Pepsico. While CocaCola has maintained its focus on the non-alcoholic beverage segment, Pepsico has expanded their focus to snacks also. Hence, CocaCola globally still appeals to the same consumer segment while Pepsico now has to balance between the two and also in the process, Pepsico might lose its place in the consumer’s mind as a chiefly beverage oriented brand.

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This is how CocaCola has differentiated itself from Pepsico by not venturing into snacks. A product of the CocaCola company that helps it differentiate from other players in the non-alcoholic beverage segment is Limca. The lemon flavoured drink has a considerable loyal consumer base which was proved when Pepsico launched the Mirinda Lemon flavour but was phased out almost instantaneously due to below average sales. In recent times though, the strategy of the company has not been performing very well.

There have been drops in market share lately and thus they need to create stronger advertisements that will once again provide a sturdy customer base. So basically in order to maintain its position as the market leader , Coke should concentrate its efforts more on its differentiation strategy. Energy : This measures the brand’s sense of momentum. It may be looked upon as the product of its customer base and the number of purchases or more appropriately repurchases per customer. Momentum maybe looked upon as a combination of leadership, consumer demand, high visibility and engaging with the consumer.

CocaCola is profitably placed in most of these facets. Being the market leader and growing at a reasonable rate for the past few years, CocaCola has a whole range of products which is aimed at increasing consumer demand. The advertising campaigns ensure that the visibility for CocaCola always remain at a high level and all of these together make sure that the energy of brand CocaCola does not fall. Relevance : Relevance measures the personal appropriateness of a brand to consumers and is strongly tied to household penetration.

It can be said that relevance is the measure of the breadth of the appeal of a brand. The main challenge for brands is staying both relevant and differentiated. CocaCola has always been a ‘top of the mind’ brand and recently through its advertising campaigns has started saying “Spread Happiness” and propagating CocaCola as a symbol of happiness throughout the world. This way it aims to connect to the mind of the customer automatically every time he has an occasion or any reason to celebrate. CocaCola, historically have always made breakthroughs in new marketing spaces before any of its competitors.

Thus they have enjoyed the early mover advantage and hence managed to establish a personal connect with people before rival brands such a Pepsico have made inroads. Even today, CocaCola has decided to invest in India and China mainly for the next five years as they see great potential for growth here. The efforts put in to be relevant is not always limited just to consumers. CocaCola was the first company to introduce the innovative “Own Your Fridge” programme for retailers whereby retailers could find a solution to their cooling needs. In his way CocaCola has managed to stand out in rural and urban markets with a very strong distribution channel. Differentiation ,Relevance and Energy together constitute the Energized Brand Strength of CocaCola and from the studies we can say that it is pretty strong in this segment and maybe it has reached its peak since it is very difficult for a brand of CocaCola’s stature to increase on its existing market size. The demand maybe increased but that too not very significantly. Esteem : Esteem as the name suggests is the measure of how well the brand is respected and regarded.

Given the history of CocaCola and its recent performance in the market, it has re-established itself as one of the more trusted brands globally. It recorded profits across all international markets and did very well in emerging markets. CocaCola enjoys the position of the leading player in the Indian beverage market where it has 60% share in the carbonated soft drinks segment, 36% share in fruit drinks segment and 33% share in the packaged water segment. Thus it is widely regarded and respected as one of the better brands that have maintained their stature over a substantial period of time.

Knowledge : Knowledge tells us about how familiar and intimate consumers are with the brand. In India CocaCola is one of the most recognised and loved brands. CocaCola’s advertising campaigns over the years have continued to make a mark on the Indian consumers and the celebrities that they have roped in to endorse CocaCola have also been successful and left a mark. The strong supply chain has ensured that CocaCola has reached the masses at every level and strong connections with retailers has also helped in strengthening that connect. Esteem and Knowledge together create the Brand Stature.

Coca-Cola is probably one of the world’s best when it comes to this category. With a high level of esteem and extremely high familiarity and availability, Coca-Cola enjoys the trust of millions worldwide. Thus, through the Brand Asset Valuator Model we have been able to assess the performance of Coca-Cola as a brand and we can conclude that it has been doing very well as the market leader in the non-alcoholic beverage segment but lately it has seen profits go down which can be traced back to its lack of proper differentiation. Other than that, the brand is alive and kicking and a bit of work on certain facets will see it soar even higher.

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