An exploratory study of the South African fast moving consumer goods industry (FMCG) on the role of brand management and its impact on financial measures

Abstract

The subject on the role of branding in delivering financial growth has been a debate for most marketers and financial managers. This is because the marketing subject by its nature is intangible and therefore difficult to measure. This misunderstanding has resulted in many authors calling for marketing to be accountable and focus on marketing investments that will deliver long term value for the shareholders. This study explores the role of branding in the South African FMCG industry and three main areas are explored namely whether marketing strategies are focused on increasing sales or future business growth. The second area is whether the inclusion of brand equity measures as part of the financial company reports, will give them the focus that they deserve. Thirdly it explores whether there is a link between brand building initiatives and financial measures.

A qualitative research method was used as it gave the researcher an in depth understanding of the role of brand management within the FMCG industry and its impact on financial measures. A total of fifteen employees were interviewed using semi-structured interviews. The findings indicate that companies still focus on measures that drive short term gains instead of long term growth and that brand building activities are compromised by brand harming activities such as regular price cutting. Future research to evaluate the impact of marketing activities that drive short term sales on brand equity and subsequently shareholder value is recommended.