Brand value chain in practise; the relationship between mindset and market performance metrics: A study of the Swedish market for FMCG

Abstract

For decades, managers have analysed, planned and implemented long-term brand strategies based on customer mindset metrics (MSMs). Typically, such MSMs are customer satisfaction, liking, brand preference and Net Promoter Score (NPS). One of the core pillars, in brand management literature, is the assumed link between certain customer-based brand assets, often operationalized as MSMs, and future long-term market performance. However, few studies have systematically and broadly evaluated how the most common MSMs relate to actual performance data. This study investigates the link between the customer MSMs, most commonly used by practitioners, and their relationships with actual market performance. The paper explores 10 MSMs and 14 market performance metrics, in 10 categories, in the Swedish fast-moving consumer goods (FMCG) market. The study is based on survey data from 2007 that is compared to purchase panel household data from 2007 and 2010. Although MSMs are highly correlated to each other, their relations to brands' long-term market performance differ. A more nuanced approach to the MSM-market performance link is proposed, as there appears to be no single “silver bullet” MSM to rely on. Using a cash flow-oriented framework, the authors recommend opting for different MSMs depending on which of the three generic types of market performance (enhanced, sustained or accelerated) are targeted.