A hundred and fifteen FMCG categories were reviewed across five product areas, in order to establish the incidence and success of masterbrands within the FMCG world. Bev Tigar, account director of ACNielsen Durban, explains how masterbrands were classified in the study: 'In order for a brand to be deemed a master, it had to be available across at least three different categories and marketed with the same name - or name derivative - in all three categories'.
According to this definition, ACNielsen established 35 masterbrands in the categories analysed. By far the greatest proportion of these were in the toiletry area, with home care showing the smallest number - three.
Answering the question of brands branching into multiple areas, it was found that four brands are currently operating in this manner, existing across either homecare and toiletry, or beverages and confectionary as examples.
Company names are often used as masterbrand endorsements. David Pusey, account director of ACNielsen Durban, mentions examples such as Nestlé, which has extended its 'Nes' derivative into various different areas such as Nestea, Nesquick and Nestum, to name a few.
Overall, it was found that masterbrands were growing slightly behind the total market included in the study. This lag came through in the food, beverages and home care categories, while confectionary and particularly toiletry grew well ahead of these overall markets. The growth of masterbrands in toiletry was driven by its high concentration in this area, while confectionary sees fewer but larger masterbrands contributing to this growth.
In this study, three manufacturers showed the most extensive masterbrand breadth: Nestlé topped the list with 'Nes' brands in 11 categories across food, beverage and confectionary areas. Nestlé's masterbrands attract a wide range of consumers, enabling a great reach across South Africa's households
Sunlight was next in terms of number of masterbrands. The Sunlight brand exists across five personal and home care categories, with the Sun derivative being present in another five. This brand is a good example of masterbrand success, with each of the subsequent additions contributing substantially to the total masterbrand's share.
Sunlight offers a range of products, from premium to value for money placements within varying categories. The brand continues to grow in almost every category in which it operates - an impressive feat, particularly amongst its more established categories, according to ACNielsen.
At least one item of the Sunlight brand has been purchased by 98.6% of households over the past year, with 9.2% of households purchasing all five Sunlight brands.
Moving onto the food side, Tiger Brands emerges as an expert in masterbrand strategies. Koo, All Gold, Purity and Jungle are food masterfood brands, according to the study's definition. Tiger Brands has managed to establish its masterbrands as 'expert' brand names in certain areas - for example, the Purity brand has become intrinsically linked to the baby food category. Beacon is Tiger Brands' major confectionary masterband.
From a personal care perspective, L'Oreal is a manufacturer which endorses its brands through its company name. Brands such as Garnier or Elvive are very rarely seen without the company brand L'Oreal appearing before them.
Colgate is another example of a brand that uses the trust that consumers place in its name to introduce them to new categories. The risk of trying new products or categories is substantially minimided by knowing and believing in the brand name of those items, says ACNielsen.
Pusey notes how "[i]t certainly appears that masterbrands are most successful when following a natural relation to other categories - for example a brand reaching across toothbrushes, toothpaste and mouthwash. This brings into play a number of related issues for industry players to consider: positioning, merchandising, promotion and advertising will all be affected by the way in which masterbrands are encouraged to operate.
"In addition to this we have of course noted a number of exceptions to the category-relation rule, where brands are starting to gain confidence in branching across different product areas. In South Africa this remains a somewhat new territory but one which is proving positive to those within it."
The point about lowering consumer risk is one which drives the success of trusted masterbrands and is one that manufacturers and retailers need to bear in mind in terms of consumer positioning, the ACNielsen study advises
Tigar concludes by pointing out that while the study has positioned a number of successes and opportunities for masterbrand manufacturers, it must be remembered that not all brands are destined for masterbrand extensions, and certainly not all for cross-area extensions. Masterbrands can certainly be an excellent way of increasing growth, but need to be implemented through brands and manufacturers strong enough to succeed in creating these areas of excellence.
