Putting a price on branding

Posted on Apr 10, 2013

It isn’t easy to measure ROI per se, but you can to an extent, measure a brands influence on consumer choice. Take Coca Cola for example. A very well established brand, and some might say the most recognised brand name in the world.
Coca-Cola owes much of its sales today on its brand alone. And as a result invests heavily in maintaining and promoting it worldwide.

What power does branding have?

If you were in a supermarket the main differentiator, and the main advantage of coke is its brand equity. Many consumers will recognise the Coke red, the shape of the bottle, and its logo.  Seeing these recognisable brand assets on the shop shelf, can help consumers with their decision making. Consumers can be lazy, and too much choice can impede the decision making. Step in Coke, the easy choice.

Coke continues to sell more than lesser known brand because of the brand equity that it has invested so heavily in. A strong brand image gives consumers the confidence to buy, or at least try your product, over the competitors.

But what if Coca-Cola didn’t invest in its brand?

Coke would have to fight a lot harder on the supermarket shelf. Consumers have so much choice, that little time is spent deliberating between two similar products.

How much is Coca-Cola’s brand worth?

$77.8B, according to Interbrand’s annual brand value analysis. Which is 45% of the company’s market cap.  Building a strong brand through marketing, brand positioning and … is vital in a world where the barrier to “copying” a product is lessened. If you have a strong brand, and create strong ties with your customers it will convince them to come back to you instead of jumping ship to a similar product, which might even be cheaper.

 



Tags: