Brand equity: The Coca-cola story

Brand equity represents the value a brand has developed for itself in relation to its customers. According to Investopedia, “companies can create brand equity for their products by making them memorable, easily recognizable, and superior in quality and reliability.”

Brand equity catapults brands to a pedestal where brand products have an inelastic demand. This means customers are willing to pay for the products even when their prices are high.

So, how do companies attain this pedestal?

Looking at Coca-cola, a major player in the global branding game, one would recognize that the brand has built consistency in its appeal to the world. Over the years, the soda brand has kept to its unique taste, and this is a remarkable feature customers have come to enjoy.

On May 8, 1886, Dr. John Stith Pemberton started Coca-cola which has become the most famous soda brand in the world today. The soda brand has, since then, moved from an average of nine drinks sold per day in its first year to 1.8 billion drinks sold everyday globally across 200 countries. The brand, today, has over 200 different soda varieties. According to the official Coca-cola website, Dr Pemberton did not even “realise the potential of the beverage he created.” Coca-cola has now become a household name everywhere in the world.

With the presence of Coca-cola in a competitive market, especially in terms of its rivalry with Pepsi, another globally acclaimed soda brand, one would wonder how the brand has remained the most dominant soda brand. Probably, there’s favourable global inclination towards the brand, and this is what happens when a brand possesses brand equity.

Even though Coca-cola is one of the most-acclaimed beverage brands globally, it continues to invest largely in advertising, with the company spending over $4 billion dollars annually in advertising expenditure. Also, Coca-cola continually showcases itself to the world at global events such as the FIFA World Cup, which Coca-cola has officially sponsored since 1978.

Through consistency, Coca-cola has built an excellent global reputation for itself and as such, it enjoys brand equity among its peers in the global market.

Therefore, forward-thinking brands, in keeping with the overall objective of making profits, must envisage ways of ensuring that consumer loyalty is nurtured and preserved for desirable results. This is how brand equity is built.