Importance of Brand to an FMCG Company-Free-Sample for Students

Question: Discuss about the Importance of Brand Equity in gaining Competitive advantage to an FMCG Company. Answer: Literature review: The literature review takes into account the important concepts and theories pertaining to the subject of study, brand equity. It delves into various aspects relation to brand equity like brand equity model, brand awareness and market penetration. The paper clearly discusses the role brand equity plays in ensuring the FMCG companies enjoy high profits and competitive advantages in the market. Conceptual Framework: Figure 2. Figure showing brand equity and competitive advantage relationship (Source: Author) According to Jin and Weber (2013) the model proposed by Kelly states that companies must create a positive and specific perception, feelings and opinion about their products among the consumers. The theory then mentions that strong brand equity results in a strong market picture about the goods and services which enable the companies pull a large number of buyers. Figure 1. Brand equity model (Source: Keller 2017) Huang et al. (2014) in their literary work mention that customer satisfaction created by consumption a high standard branded goods and services leads to promotion of the brands by the consumers which further makes the brand equity stronger. Sengupta, Balaji and Krishnan (2015) clashes with Huang et al. in their work and point out the brand power singly does not lead to market competitive advantage achieved by a company in the competitive FMCG sector. They state that fall through of the FMCG companies to sell high quality goods and services and generate customer satisfaction results in weak brand equity and losing of the competitive advantage. Brand awareness and market penetration: Huang and Sarigll (2014) state that brand knowledge refers to the capability of consumers relate and recall a particular branded product. Companies generate high brand awareness by promotion which permits them to achieve profound market penetration and sell products to a large number of consumers. Buil, De Chernatony and Martnez(2013) state that elements of brand equity like brand awareness, relatedness with brands and impact of perceived quality on buyers thought about products and optimise their purchase decisions. This analysis points out that market penetration and brand awareness enjoyed by branded products earns them high brand equity. Competitive advantage: Rubach and McGee (2015) states that the theory of generic competitive advantage by Michael Porter covers three strategies companies can adopt to gain competitive advantage in the competitive market. These are cost leadership strategy, differential strategy and focus strategy. Cost leadership strategy: Ibrahim(2015) states in his work that the theory of cost leadership strategy states that the FMCG producers with objective to achieve cost leadership must offer their products to a large population of customers to earn huge revenue. This massive revenue enables these firms to allocate their costs which maximise their profit margin. Malhotra (2014) states that high brand equity enables FMCG companies offer their goods and services to big consumer bases and earn big revenue which enables them to minimise the rates of their products offered. It can be inferred from the above discussion that high brand equity enables companies to obtain cost leadership in the international market. Differential Strategy: According to Davcik and Sharma(2015) companies require to achieve differentiation in their products from their rivals to earn competitive advantage. Malhotra (2014) states that high brand position assist the companies in promoting their goods and services to differentiate them from their market competitors. The analysis shows that strong brand equity permits the FMCG multinational companies to differentiate their product offerings from their rivals and obtain market competitive advantage. Focus strategy: Choudhary(2014) illustrates that niche marketing enables the FMCG firms focus on more specific requirements of the consumers and sell them products which meet those needs. This strategy of focus helps the FMCG firms to withstand the challenges presented by multinational competitor companies. An analysis regarding competitive strategies opted by the leading FMCG companies proves that they use all the three generic strategies to obtain and retain their competitive market positions. These powerful strategies arm the multinational firms to counteract threats of substitutes, new emerging firms and maintain their global market positions. Literature gap: Researchers feel a number of gaps while conducting researches which limits the span of the researches. Brand equity is a new concept but has considerable work to its credit but most of the work lacks reliability. The sources available on the official websites of the FMCG companies often do not give sufficient information about brand equity. The information provided on the other web sources lacks reliability due to access of users to edit them. The research also requires an exhaustive study of articles, journals and books. These two factors results in a gap between the expected amount of amount and actual data collected. References: Buil, I., De Chernatony, L. and Martnez, E., 2013. Examining the role of advertising and sales promotions in brand equity creation.Journal of Business Research,66(1), pp.115-122. Choudhary, S., 2014. Rooting by niche marketing.International Journal of Advanced Research in Management and Social Sciences,3(10), pp.84-91. Davcik, N.S. and Sharma, P., 2015. Impact of product differentiation, marketing investments and brand equity on pricing strategies: A brand level investigation.European Journal of Marketing,49(5/6), pp.760-781. Fremeth, A.R., Holburn, G.L. and Richter, B.K., 2016. Bridging Qualitative and Quantitative Methods in Organizational Research: Applications of Synthetic Control Methodology in the US Automobile Industry.Organization Science,27(2), pp.462-482. Huang, C.C., Yen, S.W., Liu, C.Y. and Chang, T.P., 2014. The relationship among brand equity, customer satisfaction, and brand resonance to repurchase intention of cultural and creative industries in Taiwan.International Journal of Organizational Innovation (Online),6(3), p.106. Huang, R. and Sarigll, E., 2014. How brand awareness relates to market outcome, brand equity, and the marketing mix. InFashion Branding and Consumer Behaviors(pp. 113-132). Springer New York. Ibrahim, A.B., 2015. Strategy types and small firms' performance an empirical investigation.Journal of Small Business Strategy,4(1), pp.13-22. Jin, X. and Weber, K., 2013. Developing and testing a model of exhibition brand preference: The exhibitors' perspective.Tourism Management,38, pp.94-104. Keller, K. 2017. [online] Available at: https://www.kvimis.co.in/sites/kvimis.co.in/files/ebook_attachments/Keller%20Strategic%20Brand%20Management.pdf [Accessed 18 Aug. 2017]. Malhotra, S., 2014. A Study on Marketing Fast Moving Consumer Goods (FMCG).International journal of innovative research and development,3(1). Rubach, M.J. and McGee, J.E., 2015. The competitive behaviors of small retailers: Examining the strategies of local merchants in rural America.Journal of Small Business Strategy,12(2), pp.65-81. Sengupta, A.S., Balaji, M.S. and Krishnan, B.C., 2015. How customers cope with service failure? 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