Managing brands in the new marketing environment

Abstract

Modern branding dates from the turn of the 20th Century and the beginning of mass manufacturing. These manufacturer brands then became the dominant forces in the Fast Moving Consumer Goods (FMCG) market for the next three quarters of a century. This dominance arose as manufacturers gained a better understanding of the nature of brands, and as mass media emerged (Fanning, 1995). However, in recent times several authors in the branding literature have begun questioning the relevance and even the survival of manufacturer brands. These authors have identified that the market in which brands have grown and flourished has changed dramatically (e.g. Fanning, 1995 & de Chernatony, 1996). Retailers have consolidated and become more powerful, media has fragmented, markets matured, and consumers more sophisticated and value savvy to name a few. Some authors have as a result of considering these changes suggested that there is perhaps a need to revise the classical model for branding (King 1991, Knox 1994, Macrae 1995, De Chernatony 1996, & Mosmans 1997). However, there is a limited amount of empirical work, which takes consideration of these changes and offers a revised model for branding. The purpose of this research is to develop a model for managing FMCG's brands against these changes (forces) in this new marketing environment. In particular this research seeks to identify the forces that are effecting the strength of FMCG's brands, and rank these forces in terms of this effect. This research also seeks to identify how manufacturers of FMCG's brands can respond to these forces in order to counter and/or overcome them. The research is exploratory in nature and it utilises the comparative multiple case logic of replication and extension. In-depth case studies were conducted on six FMCG's companies within New Zealand. The findings of this research depict two models for managing FMCG brands in the new marketing environment. This first model illustrates the forces that FMCG brands face today and in the future. These forces include retail power, fragmentation and rising cost of media, increasing consumer sophistication, competitor forces, value sensitive consumers, brand proliferation, globalisation, maturation of product categories, technology, and weaknesses in the marketing department. The second model illustrates the responses FMCG's manufacturers can use to counter and/or overcome these forces.