Branded sausages
There was a famous study done in the 1980s that demonstrated how when the proportion of branded sausages in the freezer cabinet was reduced to a certain level, total sausage sales would start to fall. The brands, it was shown, provided the necessary innovation to keep the category healthy. Look today in the freezer cabinet and chances are that the exciting things happening with sausages are happening inside an own label wrapper. (The Porkinson banger and the Wall’s ‘Instants’
sausage are noble exceptions, but often hidden from view in deference to the retailer’s own Lincolnshire herb, organic hand- reared low fat chipolatas… )
At last the branded suppliers began to realize that what they were witnessing was the growth of a new kind of brand, not a ‘me too, lukewarm imitation, no brand’, but a complex and increasingly innovative multifaceted brand – a retail brand.
offers and the savings, and more than groceries, the car insurance, holidays and financial investments.
Some retailers turn their stores into shows – the
‘retail theatre’ of The Disney Store, with its greeters and its sing-along video wall.
Of course, we might not even have ventured out of the house, but shopped from home by the Internet, logging on to a retailer’s site where the ability to build its own multifaceted but coherent brand offer at the expense of the necessarily frag- mented proprietary brands is even greater.
Getting the upper hand…
Time was when retailers knew about handling stock and building displays, and brands knew about customers. The retailers eagerly accepted the market research carried out by the brands, and their offer was effectively decided for them. All that has changed, largely as a result of the EPOS data gathered by barcode scanners and embellished by the further information from loyalty cards. Retailers have a knowledge of consumers that is second to none, and they use it to position and target their spectacularly multifaceted brand offers.
The consumer’s champion?
Tesco has fought a high profile campaign against a number of brands, most notably Levi Strauss, in aiming to offer branded goods at discount prices. It has labelled its campaign ‘rip-off Britain’, arguing that the big brands are using restrictive practices to keep their products at premium prices. Levi has responded by arguing that the environment in
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The retail brand’s multiple interactions have allowed it to ‘learn’ at a faster pace than most product brands
which you purchase the jeans – ‘the last nine yards of cable’ is its phrase – is an important part of the product and its image and should not be left in the hands of the discounting supermarket. One has to suspect both sides’ motives; we are looking neither at the consumer’s champion nor at the upholder of sacred brand values; rather this is a fight for the dominance of product or retail brands. At present, some aspects of the law stand behind the product brand, but much of the press is increasingly aligned behind the retailer. Of course, this particular battle has only just begun.
The death of proprietary brands?
Does the rise and rise of the retail brand imply the decline and fall of the proprietary brand? Probably not, provided that the suppliers recognize the chal- lenge and evolve their brands accordingly. It shouldn’t be supposed that the retailers have it all their own way. Their customers have certain expec- tations of what they will find in store, particularly with regard to certain brand names – their favourites, the big names, the recently promoted – and if they are disappointed, then they may just change the store they shop in. In this regard, a super- market with no Coca-Cola is rather like a pub with no beer.
Consumer brands still have a power over retailers, but only if they continue to behave as consumer brands – understanding the needs of their target customers, coming up with the goods, and investing in communicating that achievement.
There are signs that many are not sure of how to proceed along this path, as if stunned by the changes
Brands have no rights, least of all a right to survive – that depends on their ability to understand their customers better than anyone else
they have witnessed. When Tesco decided that it would sell its hugely valuable EPOS data to its suppliers, many of those suppliers were at a loss as to what to do with it. Having once been the consumer expert, building successful brands based on a genuine match between their capabilities as manufacturers and the consumer’s needs as uncovered by their research, it is as if a decade of category management has left them witless.
Category management has sometimes been used as a weapon to weaken the franchise held by consumer brands, and too many branded suppliers have been seduced into believing that a successful brand is just the outcome of a big promotional budget. At least retailers know better.
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Too many companies in B2B or service industries dismiss branding as a viable option. Here are just some of the stated reasons, with some counter comments to each:
• ‘Brands are just names, logos or slogans, and such things are irrelevant to our customer’s choice of a supplier.’
A good brand is much more than a name, logo or slogan, but even so, don’t underestimate the human element in your customers’ decision- making process. They respond to good quality promotion like anyone else, and don’t be surprised if your anonymity and timidity leaves them agog with indifference.
• ‘Brands are for products, and while we do have different products it is really the company that they are buying.’