Product punching to beat the own label bullies
Retailer own label is the bully of the branding playground. He pins you against the wall and demands most of your pocket money ("trade support"). Then, he forces you to hand over the homework you’ve slaved over ("strategic partnership by sharing innovation plans a year in advance"). He then proceeds to copy your work, and hand in to the teacher before you (launching to market first), offering an apple as a further sweetener (lower price than you).
The last post looked at how many brands have reacted to this bullying by "surrendering the sausage" (product) advantage. These brands seek salvation in sizzle, trying to create emotional connections with their consumers as a form of protection. However, as we saw, this has not stopped own label getting even bigger and stronger; their share of UK grocery sales has doubled in the last 20 years, and is fast approaching 50%.
The last post also suggested that surrendering the sausage was not the only option. And here I’ll propose some ways in which brands can differentiate using product as a source of advantage.
1. Be famous for something
The place to start is remembering why brands were created in the first place. This was not to "create emotional connection", it was to help people buy confidently, quickly and easily. And today, with the overwhelming complexity of choice consumers face, the main role of brands should still be to simplify choice by standing for something.
This requires a crystal clear positioning, and then seeking to "own" this position in the minds of consumers. The word "own" here is important. This doesn’t mean being one of several brands that score well on a given criteria. It means being significantly stronger and seen as THE brand for that benefit. In laundry detergents in the UK, decades of consistent focus on cleaning by the Ariel brand mean it is seen as the best choice for this benefit. This reflects both focus in R&D, and also in communication. Heinz is THE best tasting tomato ketchup, and no matter how hard a challenger tries to take it on, it’s almost impossible to "re-wire" this association in millions of peoples’ minds.
2. Stick to what made you famous
Having defined what made you famous, the next challenge is to stick to it, and avoid being diverted. The first diversion is chopping and changing your marketing mix, which we saw in an earlier post on mobile network Orange. For years they were hot, but after being taken over by France Telecom and putting in new management, they went off course. The second diversion is extending into new markets where the brand has limited added value, diverting attention from the core business. One risk with this "brand ego tripping" is that consumers get confused about what you stand for. The bigger risk is the fragmentation of marketing investment and resources. Marketing teams get distracted by the sexy "new toy", and spend less time protecting the core product against own label copy-cats. Examples of brand ego trips include Axe/Lynx shaving, Virgin Jeans, easyWatch/4men cosmetics/pizza/cinema/etc,
3. 100 little things
This is a really interesting one. It’s based on a conviction that at least half or more of differentiation is down to execution, not positioning. And specifically, it’s about doing lots of little things really well. Whilst own label can copy 1, 2 or more of these things, they can’t copy the whole mix. I once read this as being described as creating a "nest made of 100’s of twigs", which is a nice visualisation of this. Think about some of your favourite brands, and do a 5 minute brain bank on what makes it different, and see how long a list you come up with. Then think about being an own label brand trying to copy this complex formula for success.
I’m going to do innocent, and post the results tomorrow.
4. Build authority
Own label have hired plenty of good
marketing people, and can do a great job of copying your pack design,
concept, name and product. However, so far, they have not got the
expertise or resources to create products requiring heavy R&D. This
is why own label still has a small share of markets like cosmetics,
shampoo and laundry detergent. And even in markets where own label is
very strong, such as food and drink, building technical advantage is
great barrier to copying.
Take Flora/Becel Pro-Activ.
This range of spreads and mini-drinks has been proven to lower
cholesterol levels, based on millions of dollars of R&D. Also, huge
effort over several years has been applied to getting the active
support of "opinion fomers" such as health experts and doctors. To cap
it all, in Holland you can even save money on your health insurance
with VGZ if you use the product regularly!
4. Keep on keeping ahead
Make no mistake, the own label bullies will catch up with whatever innovation you bring to market and offer it at a lower price. However, one way to defend against this is to run faster. And to keep on running. In other words, you need a pipeline with wave after wave of innovation. No sooner has own label copied your first innovation, then "bam!" here’s the next one. And the next one. And the next one. After a while, they get tired of trying to keep up with you and go looking for someone slower and weaker to beat up. Relentless innovation is one of the reasons for the low own label share in the markets mentioned earlier: cosmetics, shampoo and laundry detergent.
5. Combine sizzle AND sausage
This post is all about re-gaining the product advantage, but this is even more powerful if it can be delivered in an emotionally appealing way. This seamless combination of "sausage and sizzle" truly is branding nirvana. Marks & Spencer, Pampers, Dove, innocent, Magnum…. all the best brands have a strong product story, but tell this in an entertaining, involving and memorable way.
So, plenty of ways to get the product out the next time that bully comes to pick on you…