THE ROLE OF THE BRAND: EXAMINATION OF THE EFFECT OF A BRAND CHANGE ON FINANCIAL PERFORMANCE OF ELEVEN SOUTH AFRICAN RETAILERS

Has the role of the brand eroded to the point where it no longer influences the customer’s choice or the retailer’s financial performance? Does the brand have little to no relevance to either the customer or the company, to the extent that even an abrupt change in a retailer’s brand will not have a detrimental effect on financial performance? The overarching hypothesis of this research is that in contemporary multi-category mass-market retailing, the retailer brand has little to no effect on a retailer’s financial performance but that the dimensions of the retail mix are all important. This thesis argues that whilst the brand may play a role in certain retail environments, in multi-category, mass market retailing, the brand plays little to no role! The study conducted quantitative analysis, using empirical, secondary, scanner based data. The data consists of 36775 sales data points and 6 further variables for each of 987 stores across eleven multi-category mass-market South African retailers, over thirty six months (all references to 987 stores relate to a specific point in time post acquisition of the group; the average number of stores p. a. over three years of the analysis was 1021). The research used a linear mixed model, and analysis of variance to examine the effect of key dimensions of the retail mix (price, merchandise assortment, location and credit offer) on sales performance, and to examine the effect of different levels of each dimension on sales performance. Secondly, the research used a linear mixed model supported where relevant by paired t-tests and relative difference analysis to examine the effect on financial performance of both an abrupt change in a retailer’s brand and of a change in the retailer’s credit offer. The proposed research will investigate what happens when eleven established dominant brands are abruptly consolidated into five. The research will further investigate the short and long term effect of a change in the credit offer which improves affordability.