Sub-brands near their sell-by date

Supermarket chains introduced sub-brands in the early Nineties to take on big brands. But improved own-label products and over-stretched lines have led observers to question their long-term future.

On the surface Asda’s decision to axe its Integra laundry detergent brand and replace it with Logic (MW September 27) signals the supermarket chain’s determination to weed out poorly performing sub-brands.

But it also forms part of a wider ranging review into the future use of sub-brands by Asda which could in time see other names disappear from its shelves. It coincides with a similar review at Sainsbury’s and implies that supermarket retailers are starting to believe that sub-brands have, perhaps, gone as far as they can.

Supermarkets launched head-long into sub-brands in the early Nineties having reasoned that in areas like detergents and petfood – dominated by manufacturers with high advertising spends – it would be all but impossible for standard own-label products to succeed.

The theory runs that the massive disparity in marketing support makes it difficult for retailers’ own-label brands to gain recognition and so retailers “borrowed” brand values from the bigger brand names and sought to attach them to their own-label products.

The result was “brands” like Integra, one of the first supermarket detergent ranges, launched shortly after Sainsbury’s had led the way by introducing Novon in October 1992. It now has the dubious honour of being the first supermarket laundry brand to be killed off.

Jill Keen, head of Asda brand, says Integra’s branding was all wrong. “The word was difficult to say,” she says. “And it can be said in a number of different ways. It has technical undertones which are not explicit. Logic has researched well and consumers are positive about the product. Its name does not imply, like Integra, that we have done something but we won’t say what it is.”

But swapping Logic for Integra is more than a name change. If the name was the main problem it would not have survived for four years. Keen admits that Asda is in the process of ditching other sub-brands to replace them with the generic Asda name.

It is evidence that Asda, which traditionally has exploited own-label less than its rivals, now believes that its name has the credibility to carry more own-label products without the need to disguise them with sub-branded monikers.

“We are looking through all categories to see if the sub-brands are appropriate and meaningful,” says Keen. “There are no hard and fast rules, but we are more likely to remove sub-brands than to add them.”

Sub-brands give shoppers the impression that they are buying unknown manufacturers’ brands, unless the retailers’ name is given prominence on the packaging, at cheaper prices. But using the Asda brand has the advantage of promoting the store’s name.

Sainsbury’s now accepts that its Novon laundry detergent range has been extended too far and in doing so has reduced in-store choice. It is reining in the range by cutting lines and giving space back to brand owners especially Procter & Gamble (MW July 5) and Mars. The same is true of the chain’s TOPS oral care range which was only launched in February. Lines are being cut to make space for branded manufacturers’ products.

In essence, building one brand is difficult and expensive enough without trying to construct several others under the supermarket umbrella.

“Half the equity of a retailer sub-brand is still the corporate brand of the retailer,” says Creenagh Lodge, chairman of brand consultancy CLK. “They have not got the money to build brand values away from that. Their problem is their lack of bonding (through advertising) that Procter & Gamble, Lever Brothers and others have with their consumers.”

To reduce product development costs the supermarkets have taken to copying packaging, design and the positioning of products from the big spending brands. Lodge says: “Retailers’ brands have copied the style and values of the manufacturers’ brands, but have failed with their sub-brands to establish true brand depth.”

The sub-brands are vulnerable. Their advantages – they are up to a third cheaper with guaranteed shelf space in the supermarket – are outweighed by the disadvantages. They risk confusing shoppers and it is expensive for retailers to establish their brand values.

In a separate but related situation brand owners are also taking steps to rationalise their sub-brand portfolios. Birds Eye Wall’s is dropping all its sub-brands to focus its marketing activity on the core Birds Eye brand. Sub-brands such as MenuMaster, Healthy Options, Country Club, World Cuisine, Steakhouse and others are being axed – a reflection, it says, that the market is changing and that sub-brands no longer serve any purpose.

“Getting rid of sub-brands is more efficient and relevant to consumers who can’t identify with all the bits and bobs,” says Birds Eye marketing director Arnould Thirion, responsible for the clear-up. “Fifteen years ago the competitive environment was different, it was about having specific brands.”

The problem for brand owners is that improved technology means the quality of own-label products has greatly improved in recent years, and shoppers know this. Historically the brands have managed to get close to consumers through their weight of advertising support but the advent of sub-brands has made this more expensive.

The sub-brands have served their purpose in the past five years, and have helped boost the brand values of the retailers that launched them. But in some cases they now have the appearance of being burned out. This raises the question of whether in the future sub-brands will be used more for tactical purposes than to achieve any long-term objective.

They have already been launched in most areas where they are appropriate, and retailers have seen the problems of extending them too far. Retailers such as Asda and Sainsbury’s are looking closely at their sub-brands to see which have really established themselves, and will continue to root out imposters, posing as brands.

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