Future of the brand management structure in FMCG: a two-dimensional perspective

Abstract

The brand management structure has been in use in the fast moving consumer goods (FMCG) sector for quite some time. Researchers have tracked the historical development of organising for managing manufacturer brands covering the period dating back to the 1870s. Currently, there is debate on what the future holds for the brand management structure given changes that are taking place in the marketing environment, and the debate remains unresolved. This study seeks to explore the question of how FMCG marketing practitioners perceive the future of the brand management structure. While the key players in FMCG include manufacturers and retailers, a review of the literature has shown that previous research has largely neglected the retailer dimension, which is a relevant dimension in the FMCG equation. The dimension becomes even more important in the wake of extant literature’s emphasis on the growing power of distribution channels. This research is a two-dimensional perspective that explores the views of manufacturers on the one hand and retail chain stores on the other. Based on the literature, four research questions are developed on the current state of organising for managing manufacturer brands, the management of house brands, perceptions on a shift in the locus of power from manufacturers to retailers, and perceptions on the future of the brand management structure. The research questions are investigated using the case study methodology, focusing on FMCG firms in the New Zealand dairy sector on the manufacturer side and a chain store on the retailer side. Data collection is done using in-depth interviews. The data are subjected to qualitative forms of analysis. While there are other sub-factors investigated on each research question, the main finding from both dimensions is that the brand management structure is not outdated; it is still useful and works well for some companies, and in certain cases, the structure is used alongside the category structure. Abandoning the brand management structure would have a negative impact on innovation. The findings largely support previous research that concluded that the brand management structure will not disappear from the scene. Theoretically, this study has added a fresh and relevant dimension to the debate. The new dimension has produced results that are largely consistent with the manufacturer side of the FMCG sector and with previous research. The findings contribute to the body of knowledge on the future of the brand management structure and have managerial implications as well. Directions for future research are also identified.