How far can own label go?

Will manufacturer brands become increasingly irre-levant to consumers as they are outmanoeuvred by supermarkets exploiting their special relationship with the consumer? Are supermarket own-label brands sufficiently innovative and distinctive to play in the “premier division” of manufacturer brands?

CLK’s October consumer survey considered these issues and tried to identify where the next battle is likely to be fought in the war between own label and manufacturer brands.

The research showed consumers still believe that brands are better at coming up with useful and interesting ideas for new products, with only 31 per cent believing that own label has the edge in this area.

Brands are also still seen as being well ahead in terms of packaging (with 73 per cent agreeing) and product quality (with 59 per cent agreeing that this is the case). But before brand manufacturers start patting themselves on the back, they should take note that, with almost a third of consumers looking to own-label brands for innovative ideas, this is no time to be complacent.

What does the consumer want from innovation? Experience would suggest that it is not enough to “find a need and satisfy it”, as the marketing text books would have us believe. The benefit of any innovation has to be brought to life throughout the brand mix in a distinctive and motivating way, so that the consumer will be enthused by the product.

More than half of the consumers who answered the survey admitted they found it easy to confuse own label with “real” brands, with 59 per cent agreeing with the suggestion that lookalike packaging and presentation should not be allowed.

Clearly, this shows that supermarkets are not yet producing strong, distinctive brands of their own. It also proves that consumers are still looking for the reassurance of the manufacturer brand name – otherwise they would not be annoyed by the confusion.

The challenge for supermarket marketers must be to gain recognition from consumers for own brand’s innovative qualities, and to create new brand equities for their own label ranges which can act as the basis for further growth.

Currently, however, they are either relying on the branding idioms developed by brand manufacturers (for example, Sainsbury’s Novon) or simply relying on their “master brand” (for example, Tesco Puffed Wheat Breakfast Cereal).

Admittedly, supermarkets have done well to stretch their master brands and leverage their customer relationships – from petrol to banking to the Internet. But just how far will customers allow them to go?

Remarkably, as the table shows, even a supermarket branded car – the Asda Hatchback, perhaps? – is not completely beyond the bounds of possibility, with over a fifth of all 35- to 54-year-olds saying they would seriously think about buying one.

More revealing – and more likely to happen – is the fact that much greater levels of interest were expressed in the idea of a supermarket-branded mobile phone than in the idea of supermarket branded financial advice and dentistry. Of course, the latter are areas where the expertise of the supplier is critical, and where consumers might perceive supermarkets to be lacking.

As supermarkets stretch their brands, they should continually check whether their general expertise as goods and service suppliers is sufficient to create a compelling and sustainable offer. There is, after all, a point at which a brand needs to demonstrate new competencies in order to justify entering a new area.

For example, Toyota recognised that a major move into the luxury car sector required a distinct new brand and offer – hence the Lexus. Asda, when it wanted to enter the financial services market, recognised the need for a similar distinctive brand with its own dedicated staff and launched The Insurance Shop.

But our survey also showed that the battleground between brands and own label is moving outside the confines of the supermarket. Consumers said they would be happy to buy supermarket own- label brands in their local – independent – convenience stores, with a fifth even being prepared to pay a premium on top of normal supermarket prices.

Some people wonder whether the supermarkets really are committed to such moves – and more importantly, whether their brands are fit enough to take on the manufacturer brands in a retail environment over which they will have little or no control.

In cyberspace, 16 per cent of adults claim they would prefer to do their supermarket shopping online rather than slog through the aisles of the real thing. But while at first glance the Internet seems to represent the retailers’ dream – a controlled retail environment with manufacturers’ brands reduced to digital icons – they cannot replicate the reality of the supermarket, where consumers can reach out and touch products.


Disney hunts international sales chief

Marketing Week

Walt Disney Attractions is looking for a sales and marketing director for Europe, the Middle East and Africa (EMEA), a newly created role. The new director will work alongside Stephen Park, UK sales and marketing director for Walt Disney Attractions and will have responsibility for all marketing and sales outside the EMEA not including the […]

Lack of Motivation

Marketing Week

Draft legislation that is currently plodding through Parliament is threatening to rip the heart out of the incentive business at a time when motivation is crucial. If there is a recession looming, competitiveness will be at a premium and motivated staff will be the greatest assets a company can have. The proposed changes could also […]

Homebase labours as B&Q boosts sales

Marketing Week

Kingfisher’s B&Q is giving J Sainsbury’s Homebase a pasting. Just days after Kingfisher announced that it would open 55 more giant B&Q Warehouse stores, J Sainsbury published figures last week showing Homebase’s like-for-like sales slipping. The DIY market may be facing tough times, and this will inevitably hit B&Q as well. But observers believe it […]


    Leave a comment