Analyzing Brand Equity for Competitive Advantage in an FMCG Company

This report examines the critical role of brand equity in achieving a competitive advantage within the Fast-Moving Consumer Goods (FMCG) industry, using Procter & Gamble (P&G) as a primary case study. The research delves into the relationship between brand equity, market penetration, and profitability, exploring how strong brand equity contributes to competitive advantages. The report reviews literature on brand equity models, brand awareness, market penetration, and competitive strategies such as cost leadership, differentiation, and focus strategies. The methodology includes an exploratory investigation with a focus on secondary data analysis. The report also addresses ethical considerations, research limitations, and the proposed structure of the dissertation, providing a comprehensive overview of brand equity's impact on an FMCG company's global position and competitive success. The report's findings highlight the importance of brand equity in gaining access to larger consumer bases, generating substantial revenue, and sustaining a strong global position in the FMCG market.

Running head: BRAND EQUITY IN AN FMCG COMPANY
Importance of brand equity in gaining competitive advantage to an FMCG company
Name of the Student
Student ID:
Name of University
Author Note

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BRAND EQUITY IN AN FMCG COMPANY
Executive Summary:
The assignment studies the importance of brand equity to the FMCG companies taking Procter
& Gamble as an example. Procter & Gamble is the largest FMCG company in the world and the
owner of brands like Gillette and Head & Shoulders. The multinational FMCG companies give a
huge importance to creating and maintaining of high brand equity in the global competitive
market. In fact, brand equity forms one of the core business strategies of today’s multinational
companies. The assignment studies the importance of brand equity and its relationship with the
global position of the company. It is linked closely with several other marketing areas like
market penetration, competitive advantages and customer satisfaction. It is capable of effecting
profit earning capacity of the companies and their global positions. The assignment contains a in
depth of the theories and importance of these concepts with P&G as the backdrop.

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BRAND EQUITY IN AN FMCG COMPANY
Table of Contents
1.0 Introduction:..............................................................................................................................2
1.1. Aim of the research:..................................................................................................................2
1.2. Objectives of the research:........................................................................................................2
1.3. Research questions:..................................................................................................................2
2.0. Literature review:......................................................................................................................3
2.1 Brand equity model:..............................................................................................................3
2.2. Brand awareness and market penetration:............................................................................4
2.3 Competitive advantage:.........................................................................................................4
2.3.1. Cost leadership strategy:................................................................................................4
2.3.2. Differential Strategy:.........................................................................................................5
2.3.3. Focus strategy:...............................................................................................................5
2.4. Conceptual framework:............................................................................................................6
3.0 Research methodology:.............................................................................................................6
3.1. Types of investigation:.........................................................................................................6
3.1.1 Justification of the Investigation Chosen:.......................................................................7
3.2. Data collection method:........................................................................................................7
3.2.1 Justification of the Chosen Data Collection Method:.....................................................7
3.3. Sampling method:.................................................................................................................8
3.3.1 Justification of the sampling method used:....................................................................8

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BRAND EQUITY IN AN FMCG COMPANY
3.4. Accessibility issues:..............................................................................................................8
3.5. Ethical issues:.......................................................................................................................8
3.6. Data Analysis plan:...............................................................................................................8
3.7. Research limitations:............................................................................................................9
4. Structure of proposed dissertation:..............................................................................................9
5.Time Horizon (Gant Chart):.........................................................................................................9
References:....................................................................................................................................11

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BRAND EQUITY IN AN FMCG COMPANY
1.0 Introduction:
The objective of the proposal of research is to study importances of brand equity to a
company in the Fast Moving Consumer Good (FMCG) industry. The researcher has
considered Procter & Gamble (P&G), the largest FMCG company in the world to conduct the
research (Us.pg.com. 2017). As per Urde, Baumgarth and Merrilees (2013), brand equity plays a
very important role in gaining market penetration, gaining access to larger consumer bases to sell
the products, earning huge revenue from the market and gaining competitive advantage in the
market .The proposal will therefore delve into these topics in the light of P&G to study the
significance of brand equity to gain advantage to compete in the global FMCG market.
1.1. Aim of the research:
The objective of the research is to study the importance of brand equity to a company in
gaining competitive advantage in the intensely competitive FMCG market.
1.2. Objectives of the research:
 To study the connection between brand equity and advantage to competition.
 To analyse the factor responsible for brand equity enjoyed by a company.
 To study the relationship between profitability and brand equity.
 To analyse the role brand equity plays in sustaining global position in the FMCG market.
1.3. Research questions:
The four main questions the proposal would address are:
 How are brand equity and competitive advantage related?

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BRAND EQUITY IN AN FMCG COMPANY
 What are the factors responsible for the brand equity enjoyed by a company?
 What is the connection between brand equity and competitive advantage?
 What role does brand equity play in sustenance of the global position held by a company
in the FMCG market?
2.0. Literature review:
The literature review takes into account the important concepts and theories pertaining to
the subject of study, brand equity.
2.1 Brand equity model:
According to Jin and Weber (2013) the model developed by Kelly states that companies
must create a positive and specific perception, feelings and opinion about their products among
the consumers. The theory further states that strong brand equity creates a strong market image
about the products which help the companies attract a large number of consumers.
Figure 1. Brand equity model
(Source: Keller 2017)

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BRAND EQUITY IN AN FMCG COMPANY
Huang et al. (2014) in their work state that customer satisfaction created by using a high
quality branded product leads to promotion of the brand by the customers which further
strengthens the brand equity. Sengupta, Balaji and Krishnan (2015) contradicts Huang et al. In
their work and state the brand equity alone cannot lead to competitive advantage enjoyed by a
company in the FMCG sector. They state that failure of the company to offer quality products
and ensure customer satisfaction leads to weakening of brand equity and loss of the competitive
advantage.
2.2. Brand awareness and market penetration:
Huang and Sarigöllü (2014) state that brand awareness can be defined as the capability of
consumers recognise and recall a particular brand. Companies create high brand awareness
though promotion which allows them to achieve deep market penetration and sell their products
to a large consumer base. Buil, De Chernatony and Martínez(2013) state that elements of brand
equity like brand awareness, associations with brands and influence of perceived quality on
consumers’ perception about products and optimise their buying decisions. This analysis shows
market penetration and brand awareness enjoyed by brand products earns them brand equity.
2.3 Competitive advantage:
Rubach and McGee (2015) states that the theory of generic competitive advantage by
Michael Porter covers three strategies companies adopt to gain competitive advantage in the
market. They are cost leadership strategy, differential strategy and focus strategy.
2.3.1. Cost leadership strategy:
Ibrahim(2015) states that the theory of cost leadership strategy tells that the FMCG
companies in order to gain cost leadership must sell their products to a huge base of customers to

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BRAND EQUITY IN AN FMCG COMPANY
earn massive revenue. This high revenue helps these firms to distribute their costs which increase
their profit margin. Malhotra (2014) states that high brand equity helps FMCG firms sell their
products to large consumer bases and earn huge revenue which allows them to lower the prices
of their products. Thus it can be inferred from the discussion that high brand equity helps
companies to achieve cost leadership in the market.
2.3.2. Differential Strategy:
Davcik and Sharma(2015) state that companies require to differentiate their products
from their competitors to earn competitive advantage in the market. Malhotra (2014) states that
brand equity helps the companies to promote their products and differentiate them from their
competitors. This analysis shows that brand equity allows the FMCG companies to differentiate
their products from their competitors and obtain competitive advantage in the market.
2.3.3. Focus strategy:
Choudhary(2014) states that niche marketing helps the FMCG companies focus on more
specific needs of the consumers and offer them products which satisfy those needs. This focus
strategy helps the FMCG companies to stand the challenges posed by multinational competitor
companies. An analysis of the competitive strategies adopted by the top FMCG companies
shows that they apply all the three generic strategies to attain and retain their competitive
positions in the global market. These strategies arm these multinational companies to counteract
threats of substitutes, new entrant firms and retain their global positions.

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BRAND EQUITY IN AN FMCG COMPANY
2.4. Conceptual framework:
Figure 2. Figure showing brand equity and competitive advantage relationship
(Source: Author)
3.0 Research methodology:
Research methodology as stated by Fremeth, Holburn and Richter (2016) refers to the
systematic process of conducting the research in an organised manner. It leads to better
understanding of the research process and lends a strong structure to the research.
3.1. Types of investigation:
The three types of methods of investigation namely, exploratory, descriptive and
hypothesis testing method. Exploratory research is conducted in case the topic of study is
High global position and
international brands
Deep Market
penetration, brand
awareness
High revenue
Strategic competitive
advantages
Top position in
the market
Prevents competitors
and new companies
from threatening
position

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BRAND EQUITY IN AN FMCG COMPANY
comparative new and not enough literary sources of information are available. Descriptive
research studies the topics in the light of a given population. Hypothetical testing considers
studying the topic of research through statistics based on parameters assumed by the research to
narrow the scope of study to make it more specific. The researcher here takes into account a
certain population on whom he tests the acceptance or prevalence of attributes of the chosen area
of study. The researcher usually conducts hypothetical tests based on a large population size to
get a broader result which applies to a large population.
3.1.1 Justification of the Investigation Chosen:
Brand equity is a comparatively new area of study and hence the chosen method of
investigation is exploratory.
3.2. Data collection method:
There are two methods of collecting data to conduct a research namely, primary and
secondary. Primary data refers to methods where the researcher conducts research through
formal and informal communication. The formal ways of gaining primary data consist of
interviews and surveys whereas the informal methods consist of informal conversations. The
secondary data collection method consists of consists of websites, articles, books and journals.
3.2.1 Justification of the Chosen Data Collection Method:
The chosen method of data collection applied in the study mostly consists of secondary
sources of data. The matter in the research has been collected through exhaustive study of
articles, books, journals and websites.

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BRAND EQUITY IN AN FMCG COMPANY
3.3. Sampling method:
There are two types of sampling methods, the probability method and the non probability
method. The method of probability conducts studies on the samples to collect information on
random basis whereas the non probability method studies samples by choosing specific
respondents.
3.3.1 Justification of the sampling method used:
The sampling method used is probability sampling because brand equity effects a large
population of people. Hence, conducting probability sampling would give opportunities to gain
information from a large population which would strengthen the study.
3.4. Accessibility issues:
The researchers while conducting research has to face several accessibility issues. The
first accessibility issue faced was that the people were not ready to divulge their brand
preferences. Some of the web content pieces were not reliable and hence could not be accepted.
3.5. Ethical issues:
Every researcher has to maintain certain moral and ethical codes of conduct while
conduct research. The Data Protection Act 1998 mandates the researcher to maintain privacy of
the respondents and publish results only after obtaining their expressed consent.
3.6. Data Analysis plan:
There are two categories of data analysis, quantitative followed by qualitative. The
researcher is required to take quantitative data analysis method to conduct the research. He can
interview the customers of P&G to gain information about their views about the branded

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BRAND EQUITY IN AN FMCG COMPANY
products of the company. The researcher would conduct qualitative analysis from data collected
from secondary sources.
3.7. Research limitations:
The researchers face limitations in terms of both time and budget while conducting
researches.
4. Structure of proposed dissertation:
The structure of the dissertation would be composed of five chapters. The initial chapter
would introduce the topic, the second would contain the literature, the third research
methodology, the fourth would tell about the findings and the fifth would conclude the research.
The chapters would be broken down into sub parts for detailed study of the topic.

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BRAND EQUITY IN AN FMCG COMPANY
5.Time Horizon (Gant Chart):

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BRAND EQUITY IN AN FMCG COMPANY
References:
Buil, I., De Chernatony, L. and Martínez, 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 Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand
equity, and the marketing mix. In Fashion 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.