Brand Equity for Leveraging Business Performance of Fast Moving Consumer Goods Companies

Abstract

Globalization and liberalization of markets, has increased the intensity of competition faced by different organizations and hence the pressure to perform better is high. In order to fight competition companies spend huge amount on brand building activities. There is a need to study the implication of these on the performance of the business. Fast Moving Consumer Goods Industry (FMCG) is one of the fastest growing industries in India. This research focuses to identify the interrelations between the customer-based brand equity and business performance for the FMCG industry in India. Brand equity was approached from the perspective of the consumer. The literature review provides little research evidence where brand equity can be leveraged for business performance in the FMCG industry. There is immense need to focus on the concept of brand equity which can be leveraged for business performance The study merges both descriptive and exploratory approaches in order to provide a comprehensive analysis of the research problem. The study used structured and clearly stated hypotheses and involved testing the objective theories by examining the relationship among the variables. These variables were measured using questionnaires. Data on both financial performance and operational performance was collected from published external secondary sources and computerized database. Samples were chosen from the five States of Madhya Pradesh, West Bengal, Gujarat, Karnataka and Punjab based on probability and non-probability sampling. Descriptive and inferential statistics was applied to analyze the data. The four components of brand equity, appears to play a more dominant role in determining a brand’s equity for FMCG products. Brand association emerged as thelargest contributor to brand equity. The results convey that measures of consumerbased brand equity are accurate reflections of business performance in the marketplace, particularly with the operational performance. Brand loyalty had the highest influence on operational performance. The findings of this study will not only enrich the field of research pertaining to the use of brand equity for leveraging business performance, but also helps brand managers of FMCG companies to manage their brands effectively and efficiently.