This is a better first draft for a chapter. More sources and indepth numbers. Upon re-drafting this i’ll aim to add more scoures and up the anaylsis of quotes.
Word Count: 1823
Key: Sources
- Brand Positioning
Look into how supermarkets position themselves in the market. Compare and contrast to other brands using examples.
Brand positioning is used to describe the differences a brand provides between its competitors. It describe how and where they 'sit' in a particular market.
It's position represents the brand's place in the market. This is derived from developing the product's services image so that it occupies a distinct and valued place in the mind of the customer. The positioning presents a distinct proposition to the market that is in line with the brands values and the needs and desires of the customer (Davis 2009). As Davis states, to determine a brand's position, it is essential to understand what the brand means to a customers as well as having knowledge of the brand strategy.
- Brand Strategy
The strategies employed by supermarkets to ensure consistent satisfaction of their customers.
A brand strategy is critical to determine the direction of a brand and should detail areas such as understanding the brand's audience, its market and its vision. There are numerous strategies available to the supermarkets. UK Supermarkets have become a success phenomenon in retail over the last decade. Alongside numbers such as 90% of us using them every month, to every £1 in £8 in Britain being spent in Tesco, they a huge part of our consumer life. They are the most prevalent and influential brands in our lives. Supermarkets have developed sophisticated tactics to penetrate the market, allowing for them to sell more of their products to existing markets. The strategy for growth (domestically) is product development - to be able to sell and offer new products, to the same consumers.
One of many of such strategies is collaboration. The past decade has seen a huge increase in celebrity endorsement introducing 'own brand'/'own-label' ranges as seen with Sainsbury's Jamie Oliver and Waitrose's Heston Blumenthal. Such endorsements aim to make the product of service more visible or credible - leading to an increase in sales a direct result of enhancing the brand's reputation and image (Davis 2009). It offers shoppers a new range of goods, all the while extending the brand affiliation between company and its consumers. This alone is one of many moves made by supermarkets to push their brand and with it, their own brand products. Kristine Dryza, trend forecaster for leading retail brands explains 'Rather than stirring up wants and creating false needs, successful brands will be those that provide the greatest positive contributions to those who are affected by their creation.' Its about re-selling new value brands to existing, loyal consumers.
- Me-too brands
What is a me-too brand? The rise of me-too brands used by supermarkets as a cheaper alternative to leading brands.
Me-too products are sold under the umbrella of their parent brand. The most prevalent examples of 'me-too-ing' occur in the food market. It is the major companies who are producing these products - Sainsbury's ASDA and Tesco.(Lury 2001)
Me-too brands cannot occupy the same space as existing leading brands, also known as name-brands. As Lury (2001) states 'They have to do something to make themselves attractive to us, the consumers. Often this point will be a lower price...they have to find an edge, a point of difference against the original brand if they are too succeed. The retail brands haven't had the cost of all the initial explanatory research and development and don't usually have the cost of advertising their version of a brand so they can afford to charge less. ' Many leading brands are anything from 25% to 100% more expensive than a retailers own brand equivalent or an alternative named, but unknown product. For us as consumers, this is good news. We receive a good quality version of the product we want for less money that the name brands charge.
The total own-label sales in the UK is nearly three times that of the global average. 'Consumers perceive private brands as providing 'value for money' and this has been encouraged as retailers have continually improved the quality of their own label products. 'Supermarket labels and low priced 'fighting brands' are gaining an increasing share of the market and reducing the demand for brands.' (Doole and Lowe, 2005, p. 215)
Lury (2001) cites that 'The competition between the traditional manufacturer brand and the lower priced, 'me-too' products sold under a retailer's branding is one of the most important issues in the evolution of modern branding. The battle between brands' and retailers' own label products probably occupies more space in marketing media than any other subject.' He explains how the vastly growing introduction of own brands by retailers has revolutionised our shopping experiences as consumers.
Similarly, Sir Michael Perry, ex-Chairman of Unilever, noted the rapid growth of retailers years ago, describing this transformation in a speech to the Advertising Association in 1994. 'We no longer associate all supermarkets with the volume discounter’s philosophy of “pile ‘em high and sell ‘em cheap”. That is just one positioning. And the retailer that invented it no longer claims it. Stores like Sainsbury and Tesco have established their own reputation as guarantors of freshness and quality - and far more than that. For enhancing enjoyment of shopping; for broadening the minds and experiences of their customers and for catering successfully to all incomes, classes and tastes. They have established powerful brand identities of their own which command consumer respect. This formidable achievement has inevitably changed the competitive context for the manufactures’ brands in those stores. Consistency of quality is no longer enough. Its the minimum price of entry - but it’s no guarantee you’ll even get on the shelf.' Sir Perry recognised how...
These own brands are further split into smaller brands known as 'ranges'. Supermarkets divide their ranges and customers, to easier target certain demographics and can be categorized as such.
Premium (high-end) Examples of these products are Sainsbury's Taste The Difference, Morrisons Signature and Tesco's Finest. Within this fall the before mentioned ranges like Organics and FreeFrom. Additionally 'diet' and 'health' items are grouped here, Sainsbury's Be Good To Yourself and Morrisons NUME. Within this bracket, you are essential paying extra for not only the promises but the packaging.
Own Brand: (middle-tired) These products, using the supermarkets name and overall house brand as advertisement, such as by Sainsburys's and Morrisons M.
Basics: These also use the supermarket name but with what could be argued as intentionally poorer branding to signify the price difference. Sainsbury's Basics and Tesco EverydayValue.
The deliberate nature of such specific branding decisions I find fascinating. As Knox cites (2015) "Up until recently, the packaging of private-brand goods had not resembled that of independent brands. They are a cheap option not in direct competition with branded products, but sold to appeal to customers for whom a low price was the only issue". These brands were never created as direct competition, but to directly position themselves below leading name brands, brilliantly occupying a new area of the same market and as many studies show, are winning. More shoppers than ever are actively choosing own-brands from supermarket shelves over 'name
brands', having supermarkets brands account for 54% of UK supermarket sales, according to Nelisen, consumer researchers. Last year, sales of own-label food and drink had massive increases, from £40.6 billion in 2009 to £48.3 billion, from Mintel, leading market intelligence agency. The figure is expected to rise again to £49.7 billion this year. 71% of UK consumers believe that the overall quality of own-brands has improved, while 50% said they would buy more if greater variety was on offer.
Though Waitrose's essential range is frequently be mocked for it's definition of 'essentials' (including parmigiano reggiano, ironing water and artichoke hearts) but it is a billion pound range with around 2,000 products. Its sales also have continual increases, up 5.6 per cent year on year, outperforming the rest of its market. (Arkell 2015) Similarly same is true at ASDA, where half of the average weekly shop is spent on its own-label products. ASDA's senior brand manager Kathleen Palmer states ‘The boost in sales of own-label food is a reflection of the increasing quality and value of supermarket brands. The bottom line is that we can’t resist a bargain, especially now that it’s not at the expense of quality or variety.’ It is essentially pricing that are many consumers deciding factor. To be able to utilise a wealth of existing research information and profit from such is incredibly throughout. At this rate, there could be an argument to be formed that leading brands are no longer, in a practical term, 'leading', and will soon be seen as unnecessary, overpriced, products. " Bold (2014) cites 'The research is potentially bad news for brand owners, with 60% of shoppers saying the quality of most own-label brands is as good as that of name brands, nearly double the proportion of consumers who thought that four years ago.' Additionally Over two-fifths (42%) reported that some own-label brands were better quality than name brands and only 26% thought that own-brands were not suitable when quality was a consideration.
Mike Watkins (2014), Nielsen UK’s head of retailer and business insight, said: 'The perception of own-brand products has improved dramatically in recent years'. By consumers, buying selected own-label products is seen as the clever thing to do. The number of own-label purchasers who think they are better than 'leading brand' equivalents nearly doubled last year to 15% (Mintel). Additionally, and what comes as a surprise to me, is that there is no pattern for more expensive supermarket's own-labels vs cheaper own-label: Lidl's Deluxe range won Own Label Range Of The Year at the Oracle Retail Week Awards last year.
Nielsen’s Global Survey of Private Label (2014) was a result of polling over 30,000 respondents across 60 countries. Out of all the product categories analysed, vegetables and fruit achieved the highest concentration of own-brand sales with 100% of all consumers asked. Meat and poultry came next, at 96%. Additionally 44%, would be more than willing to pay the same price or more for an own-brand equivalent of a name brand, up from 28% four years ago. Watkins (2014) observed that 'As with manufacturer brands, retailers have, over time, successfully built equity into their own-brand products by investing in product innovation, further developing ranges and increasing marketing activity.'
Biblography
NILESEN N.V. (NYSE: NLSN) (2014) The State Of Private Label Around The World. [Online] Available from: http://www.nielsen.com. [Accessed 10 December 2015]
MARKETING MAGAZINE (2014) Supermarket own-brands generate more than half of UK grocery sales [Online] Available from: http://www.marketingmagazine.co.uk [Accessed 10 December 2015]
MAIL ONLINE (2015) Are any own brands as good as the real thing? [Online] Available from: http://www.dailymail.co.uk/ [Accessed 10 December 2015]
PERRY, M (1994) Advertisting Association. Speech
PERRY, M (1994) Advertisting Association. Speech
DAVIS, M (2009) The Fundamentals Of Branding. Switzerland: AVA Publishing
KNOX, M (2015) Supermarket Monsters: The Price of Coles and Woolworths' Dominance. Collingwood: Redback
LURY, G (2001) Brandwatching. 2nd Ed. Los Angeles: Blackhall Publishing.
DOOLE, I and LOWE, R (2005) Strategic Marketing Decisions in Global Markets. Boston: Cengage Learning EMEA.
