Would you rather have Coca-Cola’s Revenue or its Brand? It’s a straight-up question and one we use frequently when discussing branding and brand management.
The point is that most will opt for the money, the cold, hard cash.
‘I’d be rich and can buy another company’
‘I’d take the money and live happily ever after’
‘I’d put it all on red, double or nothing!’
and although this does make sense in some contexts (with the exception of going to a casino and taking a 50/50 chance of doubling what is already a substantial amount of money) we need to dig a little deeper to understand why it’s worth considering the brand.
Before we go any further, it is worth pointing out what we actually mean by ‘the brand’ as it can sometimes be misconstrued.
When most talk about a brand, they throw the word around like a dog getting its hands on its first squeaky banana, bundling it in with the all-important logo, but this is just the pinnacle of what a brand is – if you think of an iceberg, the logo is the bit that you and everyone else sees, comments on, recognises instantly, whereas under that waterline there are a whole host of assets that make up a brand, too many to list here – partly because I’m lazy and mostly because there are too many, but let’s list a few so you get the idea:
The communications you use, is part of your brand,
The people you employ, is part of your brand,
The tone you use, is part of your brand,
The products you offer, are part of your brand.
The perception people have of you and your organisation is your brand.
And this final point is probably the most important as how people perceive you and your organisation is an individual perception that changes from person to person. The more distinguished and established your brand is, the easier it is for individuals to have a very similar perception as others do, meaning you stand a much better chance of being remembered how you want to be remembered.
But why is this important?
If you can do this successfully, and create a strong brand presence, then you may find that everything starts to become much easier as the connection between your brand and how you want to be perceived is much stronger and more effective.
Think Hoover – no one does the vacuuming or the Dysoning (yet), they do the hoovering. Hoover created such a perception around what their brand was that the physical act of vacuum cleaning was no longer vacuum cleaning, it was hoovering (the brand name, not the physical action)!!!!
The same with Visqueen, the same with Tannoy.
To summarise, we can use the following statement;
“A brand is the sum of all expressions by which an entity (person, organization, company, business unit, city, nation, etc.) intends to be recognized.”
Calin Hertioga & Johannes Christensen (Interbrand.com)
Now back to Coca-Cola;
Going way back to 2012, Coca-Cola’s revenue was $48.02 billion, not bad for just selling fizzy, brown water 🙂 and since then there has been a steady decline in this revenue to $33.01 billion at the end of last year (2020) (statists, 2021). Now these are big numbers to comprehend and it is worth pointing out that this is revenue, not profit!
Although I couldn’t find Coca-Cola’s overall yearly profit for last year, we do know that Coca-Cola’s Global Ventures Group (GVC) reported an operating loss of $9m in the final quarter of 2020.
That bank account isn’t looking so rosy now is it?
However, according to macrotrends.net (2021) Coca-Cola’s annual gross profit for 2020 was $19 billion, not to be sniffed at, but still a 13.54% decline from the previous year.
So that’s the financials (glad that’s over), but what does that mean for the answer to our original question – brand or bank account?
Finally, let’s take a look at the brand as an asset.
The Coca-Cola label (part of, if not the most recognised part of Coca-Cola’s brand assets) is one of the Worlds most recognisable and because of this Coca-Cola enters into the same division as more newly established brands such as Apple and Microsoft. In 2020 it was seen as #6 behind tech giants Apple, Google, Amazon, Microsoft and Facebook (Forbes, 2021).
It is one of the most valuable brands, garnering a brand value totalling $64. billion.
And this is just the monetary value here. We haven’t even touched upon the other elements of the brand such as the intangible customer loyalty, awareness and culture, as well as the more tangible elements including registered trademarks, products, established networks and supply chains, which all help in long-term success and can be vastly overlooked when discussing ‘brand’.