The role of distribution in determining a brand's availability and ability to charge a price premium within emerging markets

Abstract

Consumer packaged goods (CPG) firms managing and distributing their brands within emerging markets often have to take a dual marketing approach to overcome the various socio-economic, institutional and retailing challenges that exist. This often requires the development of new distribution and brand management methods that are unique to these markets. Given that detailed marketing studies have only recently begun to receive attention, this study will add to the current set of literature, especially within the context of brand and distribution management within emerging markets. To the best of the researcher s knowledge as evidenced by the literature reviewed, this is the first study to empirically address the effect that various retail formats across rural and urban geographies have on branded product availability and price premium. The aim of this study was to establish which individual brands within various product categories are better at managing their availability and price premium across retail format and geography in the South African market. The study was quantitative in nature and descriptive in design, with pricing and availability data being gathered for 37 branded products by way of observational form. 272 retail formats across urban and rural geographies in each of the nine South African provinces made up the sample size. Although branded product availability was generally lacking in informal rural retail channels, the long-standing multi-national brands within the soft drink, cigarette and laundry detergent categories were found to be best at managing their brand and distribution footprints throughout South Africa. The findings also uncovered that counter to most emerging market literature, price premium was higher in formalised modern retailers compared to informal traditional retailers. These findings are further unpacked in the proceeding chapters. The limitations of the study and implications for emerging market literature are also discussed in detail.