slide 1: Ms. Richa Joshi Research scholar
Delhi Technological University
EXAMINING THE RELATIONSHIP
BETWEEN SALES AND BRAND EQUITY
IN GLOBAL FMCG BRANDS
Paper Presented at International Conference on Contemporary Management Practices Creative or Dogmatic
Jagan Institute of Management Studies JIMS | www.JimsIndia.org
slide 2: 2
AGENDA
01 02 03 04
Objective
Research
Methodology
R Square Conclusion
slide 3: OVERVIEW
slide 4: 4
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
In this paper we are trying to analyze the impact of Brand Equity on the sales with
respect to various brands .
PURPOSE
slide 5: 5
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
To demonstrate the pattern of sales of three Global FMCG Brands for a period of 8
years.
To Present the Brand Equity of all the three Global FMCG Brands for past 8 Years.
To determine the impact of Brand equity on sales.
OBJECTIVES
slide 6: 6
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
INTRODUCTION
Brand Equity is termed as set of asset and liabilities linked with the brand that add or subtract value
provided by the product to firm and its competitors.
In order to analyze impact in global context we have taken three global FMCG brands Nestle Johnson
Johnson and Danone which have been listed in top 100 brand in terms of brand equity for the last 8
years by interbrand.com.
The three brands belong to different countries i.e. Johnson Johnson is U.S based firm Nestle is
Switzerland based firm and Danone is france based firm.
slide 7: 7
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
The Research Design is exploratory in nature. The data used is entirely secondary data collected
from the balance sheets of all the three companies i.e. Nestle Danone Johnson Johnson.
The data for Brand Equity is collected from www.interbrand.com it is a U.S based brand
consultancy firm.
The data collected has gone through correlation and regression analysis since the data of
dependent and independent variable is in metric form.
RESEARCH METHODOLOGY
For implementing correlation regression analysis SPSS V 20.0 is used. The sales data and
brand equity data has been analyzed for the past 8 years i.e. 2006-2013. The data is time series
data .
slide 8: 8
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
HYPOTHESIS TESTING
H1 Sales and Brand Equity are associated.
β≠0
H10
Sales and Brand Equity are not associated
β0
H2
Brand Equity does impact Sales.
H20
Brand Equity does have no impact on sales.
slide 9: 9
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
Johnson Johnson Danone Nestle
Years
Sales in
Million
Brand
Equity in
Million
Sales in
Million €
Sales in
Million
Brand
Equity in
Million
Sales in
Million
Brand
Equity in
Million
2006
53324 3193 12038 15854.05 4638 98500 4932
2007
61095 3445 12776 18807.55 5019 107600 5314
2008
63747 3582 15220 21181.67 5408 109900 5592
2009
61897 3847 14982 21583.07 5960 107600 6319
2010
61587 4155 17010 22728.76 6363 930200 6548
2011
65030 4072 19318 24995.56 6936 836400 6613
2012
67224 4378 20869 27534.56 7498 897200 6916
2013
71312 4777 21298 29372.07 7968 921600 7527
The sales brand equity for all the three FMCG companies have been listed in the following
table.
slide 10: 10
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
CORRELATIONS
Correlations
Sales in Million
Johnson Johnson
Brand Equity in Million
Johnson Johnson
Sales in Million
Johnson
Johnson
Pearson Correlation 1 .880
Sig. 2-tailed .004
N 8 8
Brand Equity in
Million
Johnson
Johnson
Pearson Correlation .880
1
Sig. 2-tailed .004
N 8 8
. Correlation is significant at the 0.01 level 2-tailed.
slide 11: 11
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
CORRELATIONS
Correlations
Sales in Million
Danone
Brand Equity in Million
Danone
Sales in Million
Danone
Pearson
Correlation
1 .986
Sig. 2-tailed .000
N 8 8
Brand Equity in
Million Danone
Pearson
Correlation
.986
1
Sig. 2-tailed .000
N 8 8
slide 12: 12
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
CORRELATIONS
Correlations
Sales in Million
Nestle
Brand Equity in Million
Nestle
Sales in Million
Nestle
Pearson Correlation 1 .842
Sig. 2-tailed .009
N 8 8
Brand Equity in
Million
Nestle
Pearson Correlation .842
1
Sig. 2-tailed .009
N 8 8
. Correlation is significant at the 0.01 level 2-tailed.
slide 13: 13
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
R SQUARE
Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .880
a
.775 .737 2682.73789
Predictors: Constant Brand Equity in Million Johnson Johnson
The regression Equation for sales of Johnson Johnson is:
The value of R square for Johnson Johnson is 77.5.
It indicates that 77.5 of changes in sales are being explained by brand equity. The regression Equation for sales of
Johnson Johnson is:
YSJ 28330.234 + 8.858 BEJ
Where YSJ is the sales of Johnson Johnson and BEJ is the Brand Equity of Johnson Johnson
slide 14: 14
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
R SQUARE
Model Summary
Model R R Square Adjusted R Square
Std. Error of the
Estimate
1 .986
a
.972 .967 809.73669
a. Predictors: Constant Brand Equity in Million Danone
The value of R square for Danone is 97.2 which indicates that 97.2 of changes in sales of Danone are being
explained by the Brand Equity of Danone.
The Regression equation for sales of Danone is:
YSD -213.176 + 3.691 BED
Where YSD Sales of Danone and BED Brand equity of Danone
slide 15: 15
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
R SQUARE
Model Summary
Model R R Square Adjusted R Square
Std. Error of the
Estimate
1 .842
a
.709 .660 246725.13259
a. Predictors: Constant Brand Equity in Million Nestle
The value of R square for nestle is 70.9 which indicates that 70.9 of changes in sales of Nestle are being
explained by the Brand Equity of Nestle. Hence by observing the R square values of all the three FMCG Brands it
can be estimated that H20 is rejected and H2 is accepted i.e. the Brand Equity does impact sales.
The Regression Equation for sales of Nestle is:
YSN -2038316.246 + 408.262 BEN
Where YSN is the sales of Nestle and BEN is the Brand Equity of Nestle
slide 16: 16
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
CONCLUSION
Results suggest that Brand Equity plays a very important role in enhancing and increasing sales
since the study has taken three major FMCG brands which have marked their presence globally and
the data which has been taken is covering a time span of eight years hence it can be concluded
that the Brand Equity is an important variable which effect sales.
However the results can only be generalized when the research extend beyond the three
companies to each and every company in FMCG sector it can be regarded as the scope of this
study for the near future.
slide 17: 17
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
REFERENCES
• Aaker David A. 1991. Managing Brand Equity: Capitalizing on the Value of a Brand Name New York: The Free Press 224 p.
• Aaker David A. and Keller Kevin Lane 1990. Consumer Evaluations of Brand Extensions Journal of Marketing 54 January pp. 27-41.
• Abhishek Dwivedi Bill Merrilees 2013. Brand extension feedback effects: towards a mediated framework Journal of Consumer Marketing Vol. 30 Iss: 5
pp.450 – 461.
• Abosag Ibrahim etal. 2012. Examining the relationship between brand emotion and brand extension among supporters of professional football clubs
European Journal of Marketing Vol. 46 No. 9 pp. 1233-1251.
• Afzal Sarwat 2013. Factors influencing successful brand extension into related and unrelated product categories Asian Economic and Financial Review
32:216-226.
• Dacin Peter A. and Smith Daniel C. 1994. The Effect of Brand Portfolio Characteristics on Consumer Evaluations of Brand Extensions Journal of Marketing
Research 31 May pp. 229-242.
• Chernatony L. de . L. Hem E. and M.I. Nina 2003. Factors influencing successful brand extensions. Journal of Marketing Management 19: 781-806.
• Swaminathan F. and Reddy. 2001. The impact of brand extension introduction on choice. Journal of Marketing 65: 1-15.
• Ramanathan Jayasankar 2013. Consumer Evaluation of Brand Extensions: Good to Service and Service to Good vikalpa volume 38 No. 2 .
• Vanitha Swaminathan Richard J. Fox Srinivas K. Reddy 2001. The Impact of Brand Extension Introduction on Choice. Journal of Marketing Vol. 65 No. 4 pp.
1-15.
• Vukasovi Tina 2012. Launching of a new product with the brand extension strategy Management knowledge and learning International Conference.
slide 18: Jagan Institute of Management Studies
slide 19: 19
Jagan Institute of Management Studies JIMS
www.JimsIndia.org
About JIMS
JIMS Rohini is one of the leading MBA
institutes of Delhi. We impart professional
education both at post graduate and
undergraduate levels in the fields of
management and information technology.
Our PGDM program is approved by the AICTE and is
accredited from NBA for excellence in quality education.
PGDM program has also been granted equivalence to
MBA degree by the AIU. We offer specialized PGDM
programs in International Business and Retail as well.
JIMS Rohini Sector 5 also offers technical programs viz BBA
BCA MCA affiliated from GGSIPU.
Established in 1993 JIMS completed its 20 years of
Excellence in 2013. We offer excellent academic
structure industry interaction and job opportunities.
slide 20: Address
3 Institutional Area Sector-5
Rohini
Near Rajiv Gandhi Cancer
Research Institute Delhi-110085.
Contact Details
Phone : 011-45184000/1/2
Mobile : +91-9871097501
Email : admissionsjimsindia.org
GET IN
TOUCH
Web Address
www.jimsindia.org
Facebook: https://www.facebook.com/JimsDelh
Twitter: https://twitter.com/JIMSsec5Rohini
G+: https://plus.google.com/+jimsrohini
YouTube: https://www.youtube.com/user/jimsquery/
LinkedIn:
https://www.linkedin.com/company/jagan-
institute-of-management-studies-jims-
Slideshare: http://www.slideshare.net/JimsIndia
Pinterest: https://www.pinterest.com/jimsrohini/