The power of a brand
15th June 2009
Coca-Cola is the ‘best global brand’ according to Interbrand’s 2008 survery. It is valued at just under $67m.
How is a brand, in most cases an intangible asset, worth that much?
I read an interesting study recently which helps to answer that question:
Coke and Pepsi are great rivals. When people drink Coke and Pepsi blind i.e. they can’t see their labels, 51% preferred Pepsi whilst only 44% preferred Coke (5% had no preference). However when consumers can see the labels only 23% prefer Pepsi and 65% prefer Coke.
Looking at this from the view of shareholders, in 2008 Coke’s revenues were $32bn, whilst Pepsi’s were $43bn, however analysts and investors have more confidence in Coke valuing the company at $112bn compared to Pepsi’s $83bn.
This is all down to the brand, Coke doesn’t sell fizzy water, as their website states: Coke ‘exists to benefit and refresh everyone it touches’.