Case Study

What Is The Significance Of Branding To Your Business?

Marketing Strategies Of the Cola Companies With its Brand.

Photo Source Pixabay

Brand is a very common purchase consideration for consumers, but businesses today may not necessarily establish a brand well.

Being a layman in marketing, I always have the perception that branding is about the name, logo and colors of a company. Cambridge Dictionary defines branding as “the act of giving a company a particular design or symbol in order to advertise its products and services.

Obviously, I have not realized this ignorant perception and visualization until I submerge more in the topic as the definition gives surface value and interpretation of its usage.

So, what’s branding? “Branding is a process of endowing products and services with the power of a brand, whereby a brand entails the name, term, design, feature or service that identifies the unique selling point of one seller’s good or service as distinct from those other sellers”

(American Marketing Association)

A classic old all time favorite example of a brand is Coca Cola. I still remembered vaguely in my childhood days, how we differentiated the taste of Coca Cola versus Pepsi Cola.

Yeah, personally I find that Coca Cola has a stronger caramel taste and Pepsi is much carbonated. Thus, this is how the brand influenced me as a consumer who prefers a less carbonated product.

In fact, Coca-Cola nutritionally has a touch of more sodium than Pepsi, which reminds us of Topo Chico or a club soda and results in a less blatantly sweet taste. Pepsi packs more calories, sugar, and caffeine than Coke.

Pepsi is also characterized by a citrus flavor burst, unlike the more raisin-vanilla taste of Coke.

(Source: https://www.google.com/amp/s/www.wideopeneats.com/difference-coke-pepsi/amp/)

Besides the taste, Coca Cola has in fact invested tons in advertising and promoting its product in the early days till present.

A brief history of the Cola companies.

Coca-Cola was founded by a businessman Asa Griggs Candler in 1888, whose marketing tactics led Coca-Cola to its dominance of the world soft-drink market throughout the 20th century. However, It was invented by doctor and pharmacist, Dr. John S Pemberton. In May 1886 in Atlanta, Georgia. Dr. Pemberton produced the syrup for Coca-Cola, which was originally marketed as a temperance drink and as a patent medicine.

Pepsi was first introduced as "Brad’s Drink" in New Bern, North Carolina, United States, in 1893 by Caleb Bradham, who made it at his drugstore where the drink was sold.

It was renamed Pepsi-Cola in 1898, "Pepsi" because it was advertised to relieve Dyspepsia (today more commonly known as indigestion or an upset stomach) and "Cola" referring to the cola flavor.

(Source: https://en.m.wikipedia.org/wiki/Pepsi)

PepsiCo was later formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc.

In terms of the advertising strategies, Coca-Cola advertising is often characterized as "family-friendly" and if I didn’t remember wrongly, the Coca-Cola polar bear mascot and Santa Claus around Christmas were the very prominent features which captured consumers' attention during its advertising campaign.

Coca-Cola direct competitor, Pepsi-Cola launched its advertising strategies with sponsorships and online marketing.

The symbolic Pepsi’s logo in red, white and blue colors, draws very close to the Flag of the United States, drawing on a strong sense of patriotism throughout its branding.

On top of this, Pepsi once boldly conducted the ‘blind test taste' named as

The Pepsi Challenge to understand consumers' taste preference.

In 1983, Pepsi was outselling Coke in supermarkets, therefore Coke turns its strategy to fast food tie-ins to secure its lead in the market.

The study revealed that that consumers preferred Pepsi over Coca-Cola at that time.

The Cola war between Coca-Cola and Pepsi-Cola was fast and furious. This led Coca-Cola’s creation of the "Diet Coke," and later the, "New Coke," both of which act as a strategy and a major shift in the Cola Wars. However, the millions of royal customers weren’t looking for a change in taste and a consortium of Coca-Cola bottlers decided to sue the company for changing the product.

Why had New Coke failed?

New Coke was originally meant to appeal to a younger generation by replacing its signature soda with a sweeter version.

The company claimed to have performed more than 200,000 taste tests before introducing New Coke. Customers preferred the sweeter formula to the classic one in the test and that gave CEO Roberto Goizueta the decision to make the switch.

However, the company failed to realize that in reality customers drink Coke in bottles and that extra sweetness became more polarized.

To overcome this, the senior leaders executed a strategic pivot by reintroducing the original formula under the name “Coca-Cola Classic” in 1985. The product was sold it in parallel with New Coke for a while.

Over time, this Coca-Cola classic overtook ‘New Coke” and once again became the iconic product of the company with a US market share of 19.5% in 2020.

Of course, Coke also produced other variants later to meet the more demanding market and cater for a wider consumer group.

Till date, Coca-Cola still focuses on its brand strategy to utilize its brands, distribution system, and financial strength to achieve long-term sustainable growth.

The example above reflected a crucial message, that is consumer preference as well as experience are vital to mark the product and hence protect its branding.

What does branding mean to business?

Coming back, what exactly does branding mean to companies? Here’s a few mock scenarios which explain how some companies might perceive branding.

• Company A: “We use branding to identify ourselves from our competitors and preserves the philosophy of our business."
• Company B: “Our brand has patent and trademark protection and thus helps us to position better in the market.”
• Company C: “Branding creates customer loyalty to our brand. Our products and it’s value can be passed down the generations.”
• Company D: “Advertising is vital in getting our products to consumers and branding helps us easily implement advertising strategies to understand market preferences and align our production.”

Yeah, for whatever the reasons and implications, the ultimate goal of branding is to increase revenue and provide sustainability for the business.

Besides the classic Cola example, there are many well known brands in each industry, just to name a few, e.g. Microsoft, Mc Donald’s, Walmart, Louis Vuitton, Zalora, Marriott International, etc. , each move with its own uniqueness and directions in business.

Essentially, these businesses set high performing standards for their businesses and products and thus are able to strengthen their brand.

Lesson learned

Comparing to my second paragraph earlier, I now perceive branding as a mean of strategizing a product or service by utilizing and invoking forms such as advertising, word of mouth, research and innovation, technologies, customer experience etc. to create consumers’ awareness with its unique market value and thus achieving its sales growth with these efforts.