Brand Management Report: Coca-Cola's Brand Valuation Analysis

This report provides a comprehensive analysis of Coca-Cola's brand valuation, exploring its brand equity, accounting practices, and market position. It delves into the challenges faced by Coca-Cola, including issues related to global expansion, changing consumer preferences, and competitive pressures. The report examines the company's financial strategies, including the acquisition of brands like Vitaminwater, and assesses the various approaches to brand valuation, such as cost, market, and income approaches. It also outlines alternative actions Coca-Cola can take, considering market suitability, customer awareness, and legal restrictions. The report recommends strategic actions based on the issues and emphasizes the importance of brand management and consistent communication to sustain brand equity. The analysis draws on accounting principles and marketing management to provide a holistic view of Coca-Cola's brand and its position in the market.

Running Head: Brand Management
Brand Management

Brand Management 1
Contents
COCA-COLA Brand Valuation......................................................................................................1
Issues faced by Coca-Cola...............................................................................................................1
Analysis of the Coca-Cola Company..............................................................................................2
List of the alternative actions...........................................................................................................3
Recommendation of the Best Course of Action..............................................................................3
Coca-Cola builds brand equity in the market..................................................................................4
References........................................................................................................................................5

Brand Management 2
COCA-COLA Brand Valuation
The brand value of the Coca-Cola Company is in billions of dollars. Due to the accounting
convention, it appears in the company books as $25 million. According to the accounting rules,
the assets of the company in the year 2004 had a book value of $31.3 billion. On June 7, 2007,
Coca-Cola gained Vitality Brands, otherwise called glacéau, creator of improved water brands,
for example, vitamin water, fruit water, for around $4.1 billion. Since these brands were
obtained, unique Book keeping rules apply to them. In light of a preparatory price tag
designation, roughly $2.8 billion was designated to trademarks, $2.2 billion to goodwill, and
$200 million to client connections; also, $900 million to deferred tax liabilities.
Issues faced by Coca-Cola
Opportunity: - The Company might face the issue while expanding the business in different
countries. It depends that company will get the opportunity of the licensing or brand extension. If
not then the brand value of the company will get affected. If the company got success in
expanding the business then the customers can make different perceptions for the brand.
Perception related to the better product and service performance can create an issue for the
company in terms of the brand value of the company (Eccles, & Serafeim, 2014).
Changing environment: - The working of the company can change due to many factors. The
company faced the resistance from the eastern countries. The company found that the customer
wants to consume more of tea and other milk fermented drinks. This makes the brand to come up
with a new product. Changing environment can affect the working of the company. This

Brand Management 3
environment affects the customer awareness about the brand which ultimately affects the brand
value of the company (Butler, & Tischler, 2015).
The decline in the competitive position of the coca cola: - This is one of the major issues
which can be faced by the company. The competitive position in the market is valuable for the
company. If the competitive position of the coca cola started declining in the market then the
company might found the decline in the brand value as well. It is required for the company to
maintain the competitive position in the market (Yoffie, & Cusumano, 2015). Though, the
current value of the company is good and has a position in the competitive market as well.
Analysis of the Coca-Cola Company
The chapter 10 talks about the accounting background of the company. Brand valuation or
goodwill of the company comes under the intangible assets of the company. Different ways can
be used by the company to measure the brand value of the company. The aim of the company is
to capture the market performance of the company. The valuation has been based on the present
value of the notional saving arising and on estimates of profits attributable to brand loyalty.
There is 3 approaches that can be utilized by the company for determining the value of the brand.
 The cost approach- The cost approach keeps up that brand value is the measure of cash
that would be required to duplicate or supplant the brand (Hollensen, 2015).
 The market approach- It is the sum a dynamic market would permit with the goal that the
benefit would trade between an eager purchaser and willing vendor (Huang, & Sarigollu,
2014).

Brand Management 4
 The income approach- The salary approach contends that mark value is the reduced
future income from the future profit stream for the brand (Davvetas, Sichtmann, &
Diamantopoulos, 2015).
List of the alternative actions
Action based on the suitability of situation- In the changing environment coco-cola might face
the situation which makes the company launch the new product. According to the preference of
the customer, company needs to bring changes in the product that company is offering to the
customer.
Customer market- Coca-Cola needs to focus on the customer market as well. The more and
more customer awareness will be there. More and more people will use the product. These
enhance the establishment of the customer market. In case more and more customer will use the
product than the brand itself make the space in the competitive market.
Legal restrictions- Company should take proper actions to ensure the legal restrictions to
expand the business and for the smooth working of the company. Coca-Cola takes the licensing
for the brand extension in the global market (Ritchie, 2016).
Recommendation of the Best Course of Action
The actions taken by the company are based on the issues faced by the company. The company
needs to take actions after understanding the situation. The company also need to make sure that
whatever steps company should not create any kind of negative image on the brand. Brand
management is essential for the business working. The company makes sure that they are
communicating in an effective way to the customers. The logo of the company recognizes by

Brand Management 5
most of the customers. Logo on the products gives assurance to the customers that the product is
branded. The company should try to work according to marketplaces trends. Different countries
consist of different trends so this helps the company in the smooth working and will be easier to
establish a brand name. The company should use personnel capabilities to analyze the market
trends.
Coca-Cola builds brand equity in the market
Coca-Cola shows the consistency in communication along with that company maintains the
relationship with the customers. Currently, the company consists of the strong brand equity in the
market. To sustain the brand equity in the market company brings new and quality products with
unique features. Clients are prepared to pay cash and simply need Coca Cola on the grounds that
the brand related with client feelings, for example, family, practices, emotions, satisfaction, and
recollections of fun and great circumstances. This approach of making a relationship with clients
helped Coca-Cola in expanding brand value; therefore, Coca-Cola has a gigantic base of
steadfast clients (Hasseb,2015).
The company tries to understand the requirement of the customers and take a decision
considering the requirement of the customers. The company always wants to create a good and
positive image of the products in front of the customers. This helps the company to build the
brand equity in the market.

Brand Management 6
References
Butler, D., & Tischler, L. (2015). Design to Grow: How Coca-Cola Learned to Combine Scale
and Agility (and how You Can Too). Simon and Schuster.
Davvetas, V., Sichtmann, C., & Diamantopoulos, A. (2015). The impact of perceived brand
globalness on consumers' willingness to pay. International Journal of Research in
Marketing, 32(4), 431-434.
Eccles, R. G., & Serafeim, G. (2014). Corporate and integrated reporting: A functional
perspective.
Hasseb. (2015). Brand Equity of Coca Cola. Viewed on 6th September 2017,
http://marketingdawn.com/brand-equity-of-coca-cola/
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
Huang, R., & Sarigöllü, E. (2014). How brand awareness relates to market outcome, brand
equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-
132). Springer New York.
Ritchie, F. (2016). Business data linking–recent UK experience. Austrian Journal of Statistics,
33(1&2), 89-97.
Yoffie, D. B., & Cusumano, M. A. (2015). Strategy Rules: Five Timeless Lessons from Bill
Gates, Andy Grove, and Steve Jobs. HarperBusiness.