This to build up its brand value and

This year there was a general public survey of the 100 most visible
companies in the U.S. conducted, thanks to which Coca Cola Company climbed six
spots up on the 2017 Harris Poll Reputation Quotient and now is said to be one
of 17 companies that has “excellent’ reputation score with a reputation
quotient of 81.18. Having in mind all the public pressure on the company’s
reputation, we can draw a conclusion that company is managing its reputational
risk well.

It is hard
to tell whether Cola has a good reputation because of the marketing or its
marketing campaigns are so successful because of the reputation, but we must
admit that at least in Coca Cola case, there is correlation.  With its superb marketing Coca Cola managed to
build up its brand value and now the Coca-Cola’s brand adds much more
to profit generation than an average company’s brand, because the brand is the
key reason to choose Coca-Cola over its rivals. Coca Cola’s brand value as
proportion of market capitalization is roughly 40% versus about 25% for Apple,
Google and Microsoft. This explains why the company is or at least was keener
on spending on branding, than trying to create new experience or significantly
diversify the business. Though we have to admit that now company is trying to diversify
as well.

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Despite
that, Coca Cola is consistently facing criticism regarding sugar levels in
their drinks, environmental damage, lack of proof behind their promises, etc.  All of that naturally hits their reputation,
but Coca Cola is doing whatever they can to manage its reputational risk. We
can classify their actions into four categories: transparency, responsibility, alternatives
and awareness.

First of all, let’s look at the transparency. The company is constantly
suffering from the assaults regarding sugar levels in their drinks, and
sweetened drinks are often mentioned to be the major source of calories in
the American diet. It is hard to overcome such accusations, which can seriously
damage company’s reputation, especially when most understand that those are
true. Since it became clear that denying isn’t going to help here, Coca Cola
focused on transparency. Being a part of the industry’s Healthy Food Options
forum, which is working with government to find solutions to the obesity
challenge, the company decided that , all bottles, cans and packaging will
offer transparent nutrition information, with calorie featured clearly on the
front to ensure that none consumer is left uninformed. Secondly, Coca Cola
employed its perfect marketing and released an advertisement saying that “if
you eat and drink more calories than you burn off, you’ll gain weight” and
that sugar in soft drinks might play a part in that, in this way confirming
being a transparent, honest and caring organization. Finally, misperceptions
are worth mentioning as well. Coca Cola reputation can potentially be harmed by
the misconceptions surrounding Coca-Cola’s brands and products and to manage
that, company tries to address everything through open communication. Company
is taking advantage of its success in digital space and use that to connect and
clearly communicate with their consumers.

The second point is responsibility. There is no secret
that Coca-Cola’s reputation has been boosted by the successful adoption of a
sustainability framework, which has three priorities — women, water, and
wellbeing. As a matter of fact, its wellbeing approach is designed to help
address the public health challenge of obesity, which affects Coca-Cola
generally. For example, the company has increased its variety of low- and
no-calorie options, which falls to the third category of how company is managing its
reputational risk – alternatives. What is more, trying to turn around soda’s
fat image, Coca-Cola used
its 127th anniversary to promise to fight obesity by not advertising to children under 12 anywhere
in the world.

While talking about alternatives, one of the biggest challenges
that Coca Cola will have to face in the nearest future is the creation of new
penalties for soft drinks companies in regards to obesity and health. It was
announced that the soft drinks companies will have to pay taxes on drinks with
added sugar, and with at least 8g of sugar per 100ml, regular Coca-Cola will
fall into the highest band of the new sugar tax, effective from April 2018. It
is not known yet how much it will increase the price of the regular coke for
the regular consumers, but it will happen and it will cause a potential
reputation issues. And this is one of the many health related examples when
alternatives grow in importance. To shape consumer choice, the company has
increased its variety of low- and no-calorie options, including the new
mid-calorie variant Coca-Cola Life as well as diet coke and coke zero ant
states that there will be a bigger emphasis on marketing these options.

Finally, let’s turn to awareness. For more than 10 years now, Coca Cola
Company is supporting physical activity programs in every country where they do
business and in this way helps people moving and live the healthy lifestyle.
Moreover, together with its bottling partners Coca Cola is supporting non-mainstream, family-orientated, active, healthy
living programs, such as the Big Walk, which they hosted in partnership with
the department of sport and recreation. One of their new goal is to enable
three million people to be physically active by investing in grassroots
programs which support active lifestyles by 2020.  Not to mention all the sustainability
initiatives company is doing in order to fight its environment harming entity
label.

Despite all the efforts to manage its reputational
risk, company’s reputation also was hurt when this year one of their executives,
B. Pereira, was sent to jail for many years lasted fraudulent activities. After
a careful investigation, Pereira was sentenced for 6 years for his abuse of
trust and motivated greed. For many years former executive was stealing Coca
Cola’s and its bottling companies’ money that he spent on luxury trips, cars
and adults entertainments. Events like this significantly damage Company’s reputation
as it’s hard to prevent it, in fact, they reveal unprofessional management. However
Coca Cola admitted that they are glad that this is over now and assured that “Since then we’ve
introduced new, and much tougher, internal systems. The structures and
circumstances that allowed this issue to occur are no longer in place. „
The only suggestion for the company would be to carefully investigate manageent
issues, fix it as soon as possible and act in a maniere that proves the company
is worth trusting .

1)      https://www.fool.com/investing/general/2014/12/08/heres-why-coca-cola-has-a-great-corporate-reputati.aspx

2)      https://mg.co.za/article/2016-09-30-coca-cola-is-a-household-name-but-what-has-it-been-doing-to-stay-that-way

3)      https://www.mediavisioninteractive.com/reputation-management/bottle-battle-coca-cola/

4)      https://www.theguardian.com/media-network/2016/jul/29/coca-cola-fall-global-brands-ranking-marketing

5)     
http://www.coca-colacompany.com/coca-cola-unbottled/coke-advances-to-no-2-in-harris-reputation-poll

6)      https://www.dailytelegraph.com.au/business/work/cocacola-amatil-executive-jailed-over-1m-coke-slush-fund/news-story/3ab6e5852811bd3a17ed26ca7122b49d