The Effect of Brand Management and Product Quality on Firm Performance: The Italian Craft Brewing Sector

ABSTRACT

The article contributes to the limited literature on marketing strategies of microfirms operating in new niches within mature industries. The study explores the effect of brand management processes and product quality on performance of microfirms in the Italian brewing industry. Preliminary qualitative interviews with eight entrepreneurs were realized. Then 92 questionnaires were collected from the entire population of 335 microbreweries operating in Italy for quantitative analysis. Findings suggest intrinsic product quality being the most relevant determinants of firms’ performance, while the adoption of brand management processes exerts a significant, negative impact. The article takes into account the relationship between brand management, quality, and performance by focusing on a single industry. Future research may enhance the significance of our findings by including multiple sectors. Entrepreneurs and microbusiness leaders should carefully assess both external (industry life-cycle stage) and internal (resource availability) factors before engaging in any brand management activity. In mature firms, it may be more beneficial and effective focusing on enhancing product quality. The article addresses an important gap regarding the adoption of brand management practices in microfirms, adding to the emerging strategic marketing literature in the small business field.

KEYWORDS:

• brewing industry
• microfirms
• brand management
• product quality