Putting a price on branding

It isn’t easy to measure ROI per se, but you can, to an extent, measure a brands influence on consumer choice. For example, take Coca Cola, a very well established brand, and some might say the most recognised brand name globally.
Coca-Cola owes much of its sales today to 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, Coke’s main differentiator and the main advantage 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 make decisions. However, consumers can be lazy, and too much choice can impede decision making. Step in Coke, the easy choice.

Coke continues to sell more than lesser-known brands 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 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 solid brand through marketing, 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.

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