Understand the Demand for Store Brands The battle between national brands and store brands in the grocery business changes with the economy. Both competitors must revise their game plans in an economic downturn, when consumers are more apt to substitute their familiar national brands for cheaper store brands. To take advantage of this trend, retailers strive to give customers more choices, invest more in product innovation, promote their own brands better and try to localize their products. And when the economy thrives, national brands gain the advantage as customers put their focus on quality and trust, rather than price. As national brands are typically considered to be cutting-edge and associated with higher quality, they must emphasize that they are irreplaceable, that they are a better value despite their higher price, and get on board with Internet marketing to earn repeated business and ensure product availability. When retailers co-brand with national brands, both tend to profit. To stay competitive and ensure profits, both sides must focus on the unique advantages that only their products can provide consumers, whether it is quality, price, locality, availability, value, or variety.
Issues to Overcome New difficulties and opportunities show their face in the grocery business during changing times. A tough economy poses great challenges for national brands, which see consumers often sacrificing quality as they purchase lower-cost store brand alternatives. This added challenge for national brands opens up greater opportunities for retailers, which can better cater to the financial struggles of customers with their cheaper store brands. However, when an upturn in the economy hits, store brands must prepare for consumers returning to the familiar national brands, as they can afford the more expensive national brands. But because store brands have been perceived as having higher and higher quality, national brand companies cannot always count on customers returning to their products, as they might not see the dividends in paying a lot more for a national product that is not that much different than the retailer’s cheaper substitute. A shifting economy can pose problems for both store brands and national brands, bringing to the forefront issues with pricing, quality, and value.
Turning It around There are many things that both store brands and national brands can do to overcome challenges brought about by changing economic times so that they can ensure success. Changing up their game plans and crafting effective marketing approaches can make both sides winners. With the rising consumer tide shifting toward store brands, there are a number of things retailers can do to spur customers to purchase their own brands, (Sison 2011). • Increase product offerings to cover each category of products • Localize products • Create new cutting-edge products
Store brands can employ these action steps to compete effectively with popular national brands. On the other hand, national brands must take a different route in order to stay on top of their game and keep customers from switching to cheaper alternatives. • Focus on product characteristics that cannot be replicated and are irreplaceable • Do a better job emphasizing to consumers how their products are superior in performance • Keep promotion strategy away from focusing on price • Concentrate on providing purchasers with a personalized experience • Create attractive product attributes that will motivate consumers to buy • Offer products online to assure product availability and generate repeated business
By following these half-dozen directives, national brands can improve the way consumers view their products so that price is no longer the motivating factor. If both store brands and national brands employ the aforementioned techniques prescribed for them, their sales are likely to improve.
Reflecting at the Checkout
