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Are they brands like the others?


Are they brands like the others?

The big brands have long regarded distributor’s brands with condescension, and would deny their new type of products the sacred title of ‘brand’s . That would call their historic hegemony into question, a kind of lèsemajesté:until now, the big brands have led the field and dominated it. For them, stores were distributors, a revealing term, since it refers more to logistics and transport than to talent for composing an overall offer, for stage-managing the shelves, for business through optimization of the upstream and downstream.

This is why, moreover, stores insist on being called retailers. The rise of the distributor’s own brand (DOB) is all the harder to accept since it signifies the end of particular type of marketing: it therefore leads to questions that go far beyond the problems of gaining market share, of which companies have not yet taken the full measure.

In order to answer the question of the exact nature of the distributor’s brand, we can examine either their management, or their status among buyers. Is the distributor’s brand managed like a manufacturer’s brand? From a managerial point of view, distributor’s brands are, broadly speaking, brands like any other. They have all the features of a brand(thinking of a particular target, selecting principal competitor whose clients they will attempt to steal, defining an offer and a price, setting themselves up with packaging and communication) but in addition they have to respond to two different constraints simultaneously.

They have to find their place in the distributor’s marketing mix, in which they now represent a key component of identity, differentiation and loyalty generation. And they generally use price as the driving force behind their own marketing mix, even when, exceptionally, they are positioned in a premium segment. For this reason, management of these brands does not have the same autonomy as producer’s brand. Their image positioning is based on that of the company. As for their price positioning, it is generally relative, set between the two client benchmarks of the big brand prices and hard-discount product prices.

In formal terms, the distributor’s brand often takes on the form of the umbrella brand:

Careful products, or Au chan or Escorted. Admittedly, there are also private labels that make no reference to the store but present themselves as isolated, thematic brands. The hypermarket chain Interface its own boats and factories: it sells seafood under the Captain Cook brand, and its processed meats under the name Moniker. Careful sells a range of over 100regional products under the brand Reflects de France (Reflections of France).

To concentrate on the store brand, also known as the banner, since it capitalizes on the reputation of the store’s name to define tangible offer at the product level, it typically covers a large number of products, or even shelves: through its extension, it brings service of practicality to the customer, who can find it by passing from shelf to shelf. It functions like a common factor, a decisional marker across the store.

The manufacturer’s brand, on the other hand, signifies competence: its extension is therefore necessarily more limited. Flurry, the French specialist in processed meat and fresh delicatessen products, would not dream of selling jam. The maker’s mark has a trade, an expertise, and a savoir-faire that underpin its progress, materialized through innovations.

This does not mean that a distributor’brand may serve as an umbrella for anything and everything. We shall see that this should be carried out based on category that creates reputation (the prototype) first and foremost for those products that are considered to be close to each other, because they are either complementary or substitutable. Bringing everything together under the umbrella of a name is no tan end in itself: the brand is there not to save money, but to create value for customers.

From this point of view, it is revealing that the big supermarkets develop a portfolio of umbrella brands, in order to cover the whole scope of their offer while also seeking the Cleveland type of client involvement (Caperers and Laurent, 1988). At Mono prix Miss Helen is the feminine beauty and hygiene brand, just as Catalina George is the male clothing brand.

In contrast, Mono prix aims to associate its name with emerging consumer trends: organic, sustainable development, gourmet, openness to the world, healthy eating, etc in the form of ‘line brand’s , as does Tosco(healthy choice, organic, sustainable development etc).

This cross-cutting status of the distributor’brand explains the difficulty of managing the store brand entirely like a brand. In fact, there is no brand without positioning: thus nacreous First Line was the brand of the most recent progress in television, hi-i, white goods and computing, at the cheapest price.

Among the big distributors, it is still often the purchasers and not the marketers who have the power. The former, and this is their key strength, react by seizing opportunities (an exceptional lot of goods here, filling a gap in the range there), and by optimizing the difference between the purchase and the sales price.

The marketing viewpoint is to install the necessary brand coherence, which goes far beyond the logo, in all the aisles. The brand must not depart from its positioning, its platform (same price range, same level of technology, etc). These two points of view are on collision course. Often the store brand is asked to put its name to products that are not entirely in line with its positioning in order to avoid having to create an individual marquee for them. Moreover, the distributor’s brand is subject to the vagaries of sourcing.

To return to First Line, this brand never took off, since easy as it is to imitate the troposphere Ma man jam, it is difficult to offer highpoint screens at low prices. There are simply no suppliers in the high-tech market to deliver such products. This is why at the end of 2005 Careful decided to put amend to First Line, and retained only its lowest, Blue Sky.

It is impossible to talk about brands without touching on the question of innovation. Infarct, the function of the national brand, the big brand, is to supply progress through innovation, change, fashion, design and so on. This requires marketing expertise – long-term thinking on the expressed, or latent and unconscious, expectations of future clients. They also have the expertise of the major industrialists. To be a brand is to be a leader, to look far into the client’s future. Eliminating the chemical preservatives implies replacing them with natural preservatives: it took three years of R&D to find bouillon's to carry out the same preservative function.

Does the distributor’s brand also innovate?

No, since it does not have the means to do so. Its business model assumes light marketing – in order to reduce the costs linked to the dozens of product heads –and the fact that it follows quickly in the wake of what is already working, that is the innovations of the successful manufacturers, by copying them to within a few details. In fact, the product specifications of subcontractors tasked with manufacturing a distributor’s brand product are up to 80 per cent defined by the characteristics of the successful product to be imitated.

If Shekel invents tablets to replace washing powder, the DOB must then manufacture identical tablets. According to the stores, the remaining 20 percent of the specifications will be a way of providing differentiation linked to the store’s own values. However, in order to be able to appear quickly on the shelves with an identical offer at a 30 per cent lower price, it is necessary to economies on marketing an dR&D: the distributor’s brand business mo delis that of copying, of imitation taken to the maximum.

A common riposte is that distributor’s brands were the first to introduce such and such an innovation in terms of packaging: for example, turning shampoo bottles upside down, in accordance with their actual position in the bathroom. However, the distribution brand, by the very construction of its economic model, does not seek to innovate:its price is obtained through turning the efforts and investments of the manufacturer’brand to its advantage, profiting from its strong position in the relationship, which means that the manufacturer needs the store far more than the store needs the manufacturer.

Upon the launch of new food, hygiene and maintenance products, the mass distribution stores today request immediate access to the same innovation for their own brand.

The examples most often given to prove that distributor’s brands can innovate reelects de France and Escapades Gourmands(Gourmet Escapades). We know that this revolutionary concept consists of revitalizing the production of 100 regional recipes, having them produced by SME's in these regions, and bringing them together under the same brand, sold in all the Careful Group’s stores.

From this point of view, Reflects de France is at rue brand: an innovative concept, a target, caprice positioning maintained for all products, a strong graphic identity, a high level of taste quality and an imaginary quality (nostalgia). This example shows that, when the distributor behaves like a true brand, it opts for own brands, or becomes the store of the brand and not the brand of the store. For example, Gap, which was the exclusive seller of Levi’s, began to introduce its DOB, and progressively ceased to sell anything but it sown store brand products. However, it was then necessary to clearly define a brand concept, the store becoming the place where the brand was expressed and experienced.

Gap defined the concept as anti-fashion . Decathlon does the same. It is symptomatic that in order to accentuate its status as designer/manufacturer with its own stores, Decathlon gave up its store brand (there are no longer any Decathlon products) in order toboggans everything under what it called‘passion’ brands: that is, a portfolio of private labels. We present below this interesting case of a distributor becoming a designer.

Consumer relationships with distributor’s brands

Let us now look at the question (are distributor’s brands truly brands?) from the angle of the consumers themselves. For consumers in mature countries, distributor’s brands are perceived as genuine brands, with their attributes of awareness and image always combined with an attractive price.

When asked the classic awareness question(‘What are the yogurt or bicycle brands that you know, even if only by name?’), consumers name As da or Decathlon. When asked if they intend to buy them (general client opinion) or buy them again (behavioral loyalty), the scores are just as high. It is no accident that on the majority of mass-consumption shelves, lowest-price products and distributor’s brands hold the dominant market share.

Over time, some distributor’s brands are able to achieve the typical brand effect, as shown by Table below, which looks at the United Kingdom, for many years a leader in this field. According to the Brand study, the consumer’s proximity to the brand moves from a feeling of presence(awareness, recognition) to a feeling of relevance(it’s for me) to the perception of performance and a clear advantage, and ultimately to a genuine affective attachment. It disinteresting to note that two distributor’s brands have made it into the top 10 of English brands studied by Brand: Marks & Spence rand Boots.

We might say, of course, that there is an affective transfer from the store to its products, a halo effect. Boots and Marks &Spencer are highly respected and historic stores in the United Kingdom, having create da relationship of reciprocal trust and esteem with their clientele over time. However, this halo effect is precisely the lever on which the distributor’s brand is counting.

Research carried out by one of our HEC doctoral students on the sources of engagement with the brand, depending on whether it is a producer’s or a distributor’brand, throws brand-new and unprecedented light on the matter. C Erase (Erase sandpaper, 2006) worked on four product categories, in order to compare engagement with the Careful brand with that for the big brand in the same category. Engagement with the brand means more than repeat purchase. anel data has long shown that distributor products obtain repeat purchase rates (behaviorally) as high as those of the big brands, or even higher. The same is true for engagement: the declared levels of engagement are high in both cases, for bathos and national brands.

Brand attachment: the 10 winning brands

Engagement– personal involvement with the brand – measures a strong relationship with the brand, meaning that if the brand were not there, the client would prefer to wait than buy an alternative. For the consumer, there is no substitutability. The reverse is indifference, or sensitivity to the slightest rise in price. This engagement comes from two sources. The first is attachment, measured whereas a strong perception of proximity (the customer feels a closeness with the brand), and the second, satisfaction linked to a perception of difference in product performance.

As Table below demonstrates, what engagement with the store brand does is essentially to create closeness with the store. The reverse is true for the manufacturer’s brand: their ‘fan’s are fans because of a strong experience of the product’s superiority.

C Erase’s doctoral thesis also examines the consequences of engagement with the brand. In theory, the more people are engaged with the producer’s or distributor’s brand, the less they will seek variety when shopping in this aisle, and the less sensitive they will be to the price. This is exactly what happens with the big brand: repeat purchase of the identical product results directly from the client’engagement with the brand and its reductive effect on two key factors of disloyalty (enjoying variety and being sensitive to price).

For the store brand, engagement with Careful influences the repeat purchase, and certainly diminishes the appeal of variety, but does not make the client insensitive to the price. This means that the repeat purchase of the distributor’s brand is always contingent on the price: it is highly conditional. These shelves are now seeing the advent of lowest-price products. The repeat purchase rate of the distributor’s brand, although high, is essentially false loyalty (Caperers and Laurent, 1996):the customer is always sensitive to the price, and keeps an eye on price differences on the shelf.

It is not an absolute brand . Nevertheless there is an interesting difference in the way a distributor’s brand works, compared with the manufacturer’s brand. As Levy’s research (in Levy and Caperers, 1996) on the impact of distributor’s brand trials on attitudes showed, the satisfaction created by distributor’s brand increases the credibility of all the distributor’s brands, at least in terms of attitude. If a customer tastes Careful biscuits, which compete with the segment leader Pep ito, and finds them to be excellent, it increases the possibility that they will also buy Tosco chocolate biscuits.

This is why distributor’s brands have difficulty creating loyalty to the store, as is often observed in studies: admittedly they create repeat purchasers within the store, but they do not appear to offer discriminating reasons, or even overriding reasons for visiting one store over another. Nor does an examination of the reasons for purchase in people on the border of the two ‘regular customer’ zones find them appearing as the number one criterion. The distributor’s brand therefore plays less of a role in differentiating itself from the competition than the manufacturer’s brand, which works only for itself. These results have been shown again in very recent analyses (Symposia, 2007).

This does not mean that all distributor’s brands are perceived to be equal: the image of the store (quality, cleanliness, popular or elitist character, and so on) reflects on everything that bears its name, therefore firstly on the distributor’s brand.

Determinants of attachment to distributor’s and producer’s brands

Strategic Brand Management Related Practice Tests

Strategic Management Practice Tests