Why is Branding Important? 3 Brand Strategy Lessons from Coca-Cola

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What marketing lessons can other companies learn from Coca-Cola’s branding?

As a marketing concept, branding can be a little tough to pin down. Part value prop, part graphic identity and design, part company culture, branding is all about how you communicate your offering to your customer.

In our work as a branding agency in Philadelphia, here’s the definition we offer our clients:

The story of your unique value that begins with your customer. It reframes how they see their world in a way that heightens the demand and relevance of your offering.”

Every organization has a brand identity, whether they consciously work to build a brand or not.

For a deeper dive into what good branding entails, let’s look at a company that puts a lot of thought and resources into crafting its brand.

How Coca-Cola does Branding

Coca-Cola is one of the world’s most recognizable brands and has been for decades.

The soda company trades on nostalgia, community and satisfying taste. That focus is central to the beverage company’s brand strategy and informs all of its decisions, from social media branding and product placement to advertising and product development.

Here are three lessons every organization can learn from Coca-Cola’s branding strategy.

1. Target an emotion

Coca-Cola and Pepsi are the definition of brand rivals. Because their products are so similar, branding and customer perceptions make a huge difference. For Coca-Cola, the way customers perceive the soda actually triggers a different reaction in the brains.

Researchers at Baylor College of Medicine in Houston scanned the brain waves of study participants as they sipped Coke and Pepsi through a tube. During one test, participants didn’t know whether they were drinking Coke or Pepsi. In that case, testers preferred Pepsi. During that trial, Pepsi generated more activity in the ventral putamen. As Scientific American explains it, that’s the part of our brain that tells us “this feels good.”

But when scientists showed participants the labels, Coca-Cola was the clear winner. In these tests, the medial prefrontal cortex sprang into action, and the brain effectively told drinkers “this is so me.” Pepsi may win in the flavor category, but drinkers ultimately have a better experience with Coke, thanks in no small part to the company’s branding. That win translates to sales, too. Coca-Cola regularly doubles Pepsi’s market share.

The Lesson 

Good branding goes beyond selling the benefits of your offering. Think about the way you want your customers to feel when they use your product or service. Should they feel satisfied? Reassured? Healthy? Secure? That feeling should be top of mind as you develop and define your brand.

2. Maintain your message

When Mad Men ended its seventh and final season in 2015, the show about advertising fittingly chose to end with one of the most famous advertisements of all time. Coca-Cola’s “Hilltop” ad offering to buy the world a Coke was so popular it became a radio hit in its own right when it was released in 1971.

With the Mad Men finale, the ad found its way back into pop culture and benefitting from a rise in nostalgia among consumers. Coca-Cola admits it didn’t know how Mad Men would use the spot, but it could feel pretty confident the publicity would be good for the company. Coca-Cola’s message still focuses on friendship and bringing people together. It’s recent “Share a Coke” campaign works to draw on similar consumer emotions.

The lesson

Decide what you want your brand to stand for and let that serve as your foundation for all marketing efforts going forward.

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3. Don’t force customers to change — too much

Coca-Cola has successfully created science out of customer perceptions – with one notable exception. New Coke.

When Coca-Cola started losing blind taste tests in Pepsi commercials, it started toying with the idea of changing its recipe. After lots of testing and research, it announced New Coke. The refreshed refreshment was sweeter, smoother and more like Pepsi.

Consumers hated it.

Much like Crystal Pepsi after it, large segments of customers saw New Coke as a needless update to the product they loved. Coca-Cola made people feel a certain way that new Coke did not. With all the fanfare that accompanied the announcement, New Coke wasn’t inviting customers to try something new and exciting, it was demanding that customers change their habits.

The lesson

New Coke offers countless lessons on everything from market research to customer perceptions to product announcements. But for Coca-Cola’s brand, it reinforced a crucial idea: Even the best brands can sometimes lose sight of what makes their story so valuable to customers.