Reckitt Benckiser cites brand building spend for sales bump
Reckitt Benckiser’s decision to reinvest money saved through operational changes into brand building is showing signs of paying off after the FMCG giant reported a strong start to 2013 .
Revenue grew by a better than expected 7 per cent to £2.52bn in the three months to the end of March.
Earnings increased in all territories but grew particularly steeply in Latin and Central America where revenue increased 11 per cent year on year.
In a statement, the company cited “brand equity investment” and “better in market executions” for the revenue bump.
Last year, the company announced a series of cost-saving measures in its supply chain and elsewhere and has begun reinvesting the £100m saved in building and growing sales of its 19 key power brands, a list which includes Finish, Vanish and Calgon.
The company vows to continue to invest heavily in marketing activity to fuel growth, targeting a 5.6 per cent revenue increase for the full-year as it “continues to invest behind brand equity building initiatives.”
Reckitt Benckiser now uses a “Brand Equity Index” to measure the efficiency of its investment in brand building across TV and print, digital and social media. The new index replaced the “pure media” measurement.
