Private branding primer1

1.Private Branding Primer Presentation for Cramer-Krasselt Winn-Dixie Stores September 18, 20xx Michael J. Williams 20xx Michael J. Williams

According to Websters New World Dictionary the word brand is defined as a.) an identifying mark or label on products of a particular company; trademark,

b.) the kind or make of a commodity,

c.) a special kind or variety

Every brand has a personality or product makeup to create a reason for the consumer to purchase.It can be connected to product innovation, packaging presentation, advertising and creative support, channels of distribution.Consumers want to buy products that they identify and have an affinity link.

Every consumer product has competitive and alternative choice challenges.Positioning a brand with aU.S.P.(Unique Selling Proposition) gives it a competitive edge.A brand has a greater chance to break out of a perceived Me-Too commodity item to a necessary product that consumers choose over the competition.

"Differentiation" is the collection of differences in features and benefits versus competitive products.The key is to determine how important these collective differences are to the buyer.Communication of important differences is the basis for a successful positioning strategy.

Source: Al Ries & Jack Trout, Marketing Warfare

What is unique about your business or brand vs. direct competitors? Which of these factors are most important to the buyers and end users of your business or brand?

Which of these factors are not easily imitated by competitors?

Which of these factors can be easily communicated and understood by buyers or end users?

Can you construct a memorable message (USP) of these unique, meaningful qualities about your business or brand?

Finally, how will you communicate this message (USP) to buyers and end users?

Controlled, integrated program of communication methods and materials designed to present a brand to prospective customers.

To communicate need-satisfying attributes of products to facilitate sales thus contribute to long term profit performance.

Source: Promotional Strategy, Engel, Warshaw and Kinnear

Tools:

Advertising

Personal Selling

Selling Support

Publicity

Sales Promotion

Past History

Focus Groups

Image Evaluation

Needs Hierarchy

Trend Analysis

Environmental Factors

Case Studies

Communicating with the brand strength.

Clarity and Precision

Easily Understood

Avoiding slang, jargon and confusion

Building positive image

Avoidance of negative imagery

Primary Research: Setting up a study that specifically tests theories or beliefs.This research will be quantified and statistically important in the decision process.

Secondary Research: Research that is purchased from a well known and trusted source such as AC Nielsen, Scantrak, Towne-Oller

Develop products and services that sell.

Answers critical questions

Product attributes that customers do care about.

Most preferred attribute levels.

Effectively perform pricing and brand equity studies.

Source: SPSS Inc. Headquarters, 233 S. Wacker Drive, 11th floorChicago, Illinois 60606

Evaluations of future risk:

Real future risk as disclosed by the fully matured future circumstances when they develop.

Statistical risk, as determined by currently available data.

Projected risk, as analytically based on system models structured from historical studies.

Perceived risk, as intuitively seen by individuals.

Source: Risk Benefit Analysis ,Richard Wilson and Edmund A.C. Crouch,Harvard University Press

Use of Syndicated Service:

Scantrak, InfoScan

Nielsen Marketing Research, IMS Intl, MIS, Towne-Oller, IRI

Use of in-store database:

Loyalty Cards,

Panel groups

Introductory Stage new idea that demands investment spending to gain awareness, get trial and distribution.

Competitive Stage selling an established product, must use incentives toboth consumer and the trade.

Commodity Stage product at maturity, brand preference weakens, physical variations among competing products narrows, method of production stabilize.

The tangible product or service must be offered to the consumer at a price that will produce an acceptable return on investment.

The price chosen must be carefully tuned to the consumers willingness to pay.

Competitors actions especially important when there are many similar products.

Legal constraints i.e.FTC, Robinson-Patman Act.

VIEWConcept

V isibility how visible a package design is

I nformation ability of package to communicate key product attributes

E motionally - appealing to see if package communicates the product personality.

W orkability how well the package protects its contents

Source: Promotional Strategy, Engel, Warshaw, and Kinnear

Consumer

Cash Refunds

Contests, sweeps

Coupons

Premiums

On-packs, value packs

Contests

Free goods

Dealer loading

Dating

Display allowances

Merchandising, Point-of-sale

Products must be made available when and where the consumer dictates.

The last 50 years has seen the growth of mass channels with the last 20 years seen the growth of super centers (hypermarkets) and big box specialty retailers.

Objective is to adapt to consumer requirements for product availability

Define your target customer group by identifying the market that has a similar set of needs and concerns that your product or service can satisfy.

Demographics objectively defined

Psychographics emotionally defined

Source:Creating Brand Loyalty,by Richard D. Czerniawski and Michael W. Maloney AMACOM, 1999

Source:Engel, Blackwell and Kollat, Consumer Behavior 6 thed.

The first step is to stay current with changing customer needs. Successful positioning usually links physical (functional) needs to psychographic (emotional) needs. For example, Starbucks did this by linking coffee (functional) to a social atmosphere (emotional).

People buy products that they feel are sound and valid.Purchasing behavior is determined by many patterns:

Cultural andethnic groups

Habits

Referrals by centers of influence

Advertising

Effective yet costly way of introducing a new product.

Tends to stimulate a higher rate of trial.

Large CPG companies can afford it.

Done in conjunction with product research.

Use of Sales Promotion tools

Couponing

Value added sizes

Point-of purchase promotion

Rebates

Free goods

Displays and secondary placement

Once a brand has invested in a consumer, it must be willing to spend to keep them.

Loyalty programs Betty Crocker points

Self Liquidating Premiums Pillsbury cookbook offers

Contests Coca Cola instant winners

Cross Sells Free or discounted offers Frito Lays chips and Pepsi coupon

Loyalty is achieved when the set of buying criteria is met by the product on a consistent basis.

The pattern becomes a habit and will continue as long as the product continues to meet the expectation of the consumer.

If the product fails to deliver its expected result the consumer will start the purchase process by sampling competitive products.

Store brand products encompass all merchandise sold under a retail store's private label. That label can be the store's own name or a name created exclusively by that store.

Source: PLMA

Major retailers can offer consumers as a store brand almost any product that is manufactured and mass merchandised. Food, drug and discount store brands cover full lines of fresh canned, frozen and dry foods, snacks, ethnic specialties, pet foods, health and beauty aids, over-the-counter drugs, cosmetics, household and laundry products, lawn and garden chemicals, paints and hardware, auto aftercare, stationery, and housewares.

Source: PLMA

For the consumer, store brands represent the choice and opportunity to regularly purchase quality food and non-food products at savings compared to national brands, without resorting to coupons or promotional pricing. Store brands consist of the same or comparable ingredients as the national brands and because the store's name or symbol is on the package, the consumer is assured that the product is manufactured to the store's quality standards and specifications.

Source: PLMA

Manufacturers of store brand products fall into four classifications:

Large national brand manufacturers that utilize their expertise and excess plant capacity to supply store brands

Small, quality manufacturers who specialize in particular product lines and concentrate on producing store brands almost exclusively. Often these companies are owned by corporations that also produce national brands

Major retailers and wholesalers that own their own manufacturing facilities and provide store brand products for themselves

Regional brand manufacturers that produce private label products for specific markets

Source: Store Brands Today by the Private Label Manufacturers Association (PLMA)

Store brands now account for one of every five items sold every day in U.S. supermarkets, drug chains and mass merchandisers.

They represent a nearly $50 billion segment of the retailing business and are achieving new levels of growth every year.

To generate revenue and profits that are acceptable to stockholders R.O.I. targets. (measurable)

To build and grow a business that is fiscally sound. (measurable)

To be a customer driven business that provides products and services (measurable)

Use store brands to increase business as well as to win loyalty of customers.

Give retailers a way to differentiate themselves from the competition.

Store brands serve to enhance the retailer's image and help cement its relationship with consumers.

Creation of a store brand that uses the retailer as the brand .

Creation of a store brand that differentiates and uses segmentation.

Creation of several brands that are category or product dependent.

Private Brands that:

Account for 91% awareness of consumers

Generate over $50 billion segment of the retail business.

Store brands account for one of every five items sold in U.S. food, drug and mass merchandisers.

Source: Private Label Manufacturers Association, Gallup Study

Consumer Awareness of Store Brands -91%(86%)

Consumers Who Buy Store Brands Regularly 83%(77%)

Consumers Who Say Store Brands are as Well Packaged as National Brands 76%(68%)

Consumers Who Say Store Brands Taste and Perform as Well as National Brands 72%(67%)

Consumer Who Say Price Has Major Effect on Buying Store Brands 61%(67%)

Source: Gallup Poll, Gallup 1996 versus (1991) 1996

Shopping Products Price/Value have strong influence on the buying decision.

Specialty Products Exclusivity and uniqueness position

Convenience Products Ease of use and availability in the places people shop

Answer: It is abrandproduct that is exclusive for its retailer.It is found in aspecificretail location.

It has the same attributes as nationally branded products.

Wide Distribution

Mass Merchandisers

Combo Stores

Home/Hardware Stores

Limited Distribution

Department Stores

Gen. Merchandisers

Specialty Retail

Catalogers/ Direct Mail

Several reasons but all relate to improving theBottom line.Retailers can generate morerevenue andmore profitfrom there own private brands.

Retailers cancontrolproduct, price, channel of distribution and promotion.

Retailers cancontrolthe source of production.

Retailers have morecontrolwith national or regional brands (slotting allowances, co-op adv., display allowance, PFAA, couponing).

Retailers can give a reason for the consumer toshop their stores exclusivelyfor all their needs.

Buildstore identity and loyaltywith private brands.

Transfer orbuild a retailer quality nameto the private brand name.

Basically, private brands can return more money to thebottom lineof companies.

Private brands are thefastest growing segmentin packaged goods marketing.

They continue to outperform branded products inquality, value and customer loyalty .

High price/value perception.

Everyday, less expensive to the consumer than national brands.

Perceived as good or better than a national brand.

Offers the consumer more variety within the category.

Fastest growing segment in consumer products.

Retail outlet dependent.

Retailers offer satisfaction guaranteed.

Trust in retail name equals trust in product.

Product provides a need based on a want.

Source: Retail Industry, Brands versus Private Labels. Part 2

Low Price = Low Quality

Previous customer experience with failures i.e. if the private label jelly isnt good then their other products arent good.

A negative backlash on the retailers image.

Lack of standardization between categories.

Source: Retail Industry, Brands versus Private Labels. Part 2

Store Brands

Store Sub Brands

Umbrella Brands

Individual Brands

Exclusive Brands

Retailers name is very prominent and evident on the packaging.

Examples:

Walgreen's Aspirin

Publix Microwave Popcorn

CVS Baby Powder

Products where the retailers name is low key on the packaging.

Examples:

Wal-Mart presents Sams Choice

Albertsons Simply Clean Detergents

Kenmore Appliances by Sears

A generic brand independent from the name of the retailers name.Umbrella brands are used in different product categories.

Examples:

Superbrand dairy products (Winn Dixie)

Martha Stewart Everyday housewares(K-Mart)

Name used in one category.This is used to promote real discount product line.

Examples:

Hampton Bay Lighting (Home Depot)

Great Value Foods (Wal-Mart)

FMV foods (Kroger)

Again a name is used in one category but to promote added value products within a category.

Examples:

Private Selection (Kroger)

Michael Graves Housewares (Target)

A&P's a famous brandto your grandparents. In 1912, A&P stores instituted "cash and carry" transactions at a time others kept customer tabs. A&P was among the first grocers to make its own products like A&P Bokar Coffee (which Cmdr. Richard Byrd carried on his 1929 Antarctica expedition). The company launched Woman's Day magazine in 1937. And at its loftiest, A&P's revenue in 1950 was second only to General Motors. But that was then. Source: CIO Magazine September 2001

Kroger is considered a market leader today.Below are excerpts from its business plan.

OUR MISSION is to be a leader in the distribution and merchandising of food, health, personal care, and related consumable products and services

We will conduct our business to produce financial returns that reward investment by shareowners and allow the Company to grow

We will constantly strive to satisfy the needs of customers as well as, or better than, the best of our competitors. Operating procedures will increasingly reflect our belief that the organization levels closest to the customer are best positioned to serve changing consumer needs.

Source: www.kroger.com

Kroger Named One of Best-promoted Brands

SEPTEMBER 04, 2002-- STAMFORD, Conn. - Kroger was the only supermarket banner named one of the best-promoted brands of the past two years by Promo, a trade publication based here.The magazine's editors lauded the Cincinnati-based chain for the accuracy of its customer database, its marketing partnerships with consumer packaged goods companies, and its private label branding efforts. "Top CPGs beat a path to Kroger for targeted mailings; Kroger dices its database well to hit just the right cardholders," writes the magazine in its September issue. Promo added that Kroger is one of the chains most successful at executing loyalty marketing programs driven by manufacturers but delivered in-store. Also figuring into Kroger's designation was the fact that its private label goods account for 23 percent of total sales.Source: Progressive Grocer

Also figuring into Kroger's designation was the fact that its private label goods account for 23 percent of total sales.

Source: Progressive Grocer

Private brands are viewed as cash cows but need developmental and promotion funding.

Private brands can command the best real estate from a retailer.

Private brands need the same support of a Brand/Product team as national brands in order to stay current and adjust to consumer needs.

What are the retailers guideline for national brands?

What other costs/revenue are associated with national brand programs?

Is the return from the private label program at an acceptable level for replacing national brand programs?

The most important consideration for long term growth and business building.

Remember the adage, If you do not take care of your customer, somebody else will.

Source: Customer Centered Growth, Richard Whitely and Diane Hessan,The Forum Corporation

Retailers know that consumers can buy a national brand anywhere, but they can only buy private brand at their store.

Must give the consumer a reason to keep coming back to your store to purchase the products they need and want.

Does the retailer already have a private label or parts of a private label program?

Does the retailer have talent to execute a program?

Does the retailer have relationships with manufacturers and suppliers?

Product Attributes:

(all attributes are product driven)

Size and shape

Texture

Ease of use

Customer Service available

Legal Requirements

FDA Requirements

Batch Coding

Maintenance of manufacturing processes

Clear and Informative

Maintains the integrity of the product within.

Consumer friendly

Communicates product attributes and benefits

Re-enforces a family and branded position

Trademark protection

Food and Drug Administration rules

Batch coding

Ingredient integrity

Handling procedures

Inspections

Mission/Vision

We are customer focused and our objectives are ambitious but within reach: we intend to be the best and most successful food retailer and foodservice operator in every region in which our companies are active.

Source: Royal Ahold NV

Wegmans Brand Not Your Average Store Brand

At Wegmans, we have a unique philosophy when it comes to our "store" brand. We believe that price is only part of the equation. The other part is quality. That's why we use only the best ingredients, work closely with our chefs throughout product development, and test and re-test until it's right. It's also why we stand by every Wegmans brand product with a simple guarantee: Any problems...just bring it back for a refund. Give it a try. We think you'll be satisfied.

Source: www.Wegmans.com

Safeway SELECT Verdi Self-Rising Pizza 1st Place, 1999 San Francisco Taster's Choice Panel - Outscores Tombstone, Red Baron, DiGiorno & Freshcetta.

Safeway SELECT Gourmet Club Frozen Chicken Breasts 1st Place, 1999 San Francisco Taster's Choice Panel - Outscores Butterball Chicken Requests & Tyson .

Safeway SELECT Healthy Advantage Blueberry Waffles 1st Place, 1999 San Francisco Taster's Choice Panel - Outscores Kellogg's Eggo & Trader Joe's.

Source: www.Safeway.com/awards

Market Leaders Kroger, Albertsons, Safeway

Market Movers Royal Ahold NV

Industry Innovators Target, Wal-Mart, Wegmans

Market Laggards Pathmark, A&P

Compare your brand positioning with your competition's positioning. You should not be able to substitute anyone else's brand name for yours in your brand positioning statement.

Recommended Tactic

Creation of a store brand that differentiates and uses segmentation example: Krogers good-better-best positioning.

Good = F.M.V. (For Maximum Value)

Better = Kroger Brand

Best = Private Selection

Data Mining

Regression Analysis

Focus Groups

Pantry Diary Panels

Case Studies

Competitive History and Analysis

Establish the brand's character or "personality." This is done through descriptions that reflect personality traits or values. Consistency in advertising messages will eventually bring these characteristics to customers' minds automatically.

WINN-DIXIE's strength lies in our family of more than 120,000 loyal and productive associates. Our continuous training programs are committed to enhance the associates' ability to provide customer service with professionalism, while improving their personal skills to move ahead with the Company.

By aggressively building new and larger locations, remodeling and enlarging existing locations and offering an expanded line of merchandiseandservices, Winn-Dixie looks forward to continued growth.

OUR EFFORTS are focused on delivering total customer satisfaction and low price leadership. And this goal, we believe, is the key to gaining new customers and increasing sales and profit. We will accomplish this by being flexible and responsive to the ever-changing needs of our customers.

More emphasis is placed on the location directors taking greater responsibility for merchandising to meet the needs of each store's customers. Today's customer prefers one-stop shopping. In response, we continue moving to largerstoresincentralized locations.

With increased square footage, we are able to surround the customer with more departments and more time-saving choices from service centers like seafood, floral, pharmacy, deli, bakery, international wines and cheeses, banking, ATMs, photo processing, postage stamps and money orders. We are also expanding general merchandise, health and beauty care and frozen food areas.

Our satellite communications system increases our efficiency to network with all Winn-Dixie locations, allowing our associates to spend less time on paperwork and more time assisting the customers.

Source: www.Winn Dixie.com

What does the Winn-Dixie retail brand stand for?

Position

Personality

Attributes

Customer Loyalty

Strengths and Weaknesses

What Private Label brands does Winn-Dixie currently own?

What are the strengths and weaknesses of those brands?

How are these brands managed?

Does each product group have its business plan versus its competitive environment?

Who is in charge to position and give the brand its personality?

Is this a single-minded effort or a multi- branded strategy?

What are the elements that must remain the same? logos, trademarks, etc.

Who is the competition?

Determined on a product or category basis.

Agreement on strategic direction.

Agreement on tactical plan

Budgetary commitment

Priority determination.

Calendarization

PERT model The Program Evaluation and Review Technique to insure that the projects are on track and assigns accountability.

Pre and Post Analysis Measurements before and after an event to validate actions taken.

Purchase and Repurchase Tests

Putting together a Private Brand program that enhances:

Corporate goals and objectives

Builds long term growth

Enhances the bottom line as measured as R.O.I

Retailer is in the position of strength with their brand:

Signage

In store promotion

Real estate the retailer owns the shelf space

Promotional banners, shelf talkers, merchandising

Advertising message and delivery

Store Tie-ins and events

Retailer can control the promotional schedule of their private brand:

Best location, display and end caps.

Price feature advertising

In store sampling

Seasonality impact

Retailer can build brand usage through secondary locations.

Universal displays that are multi-purpose and promote the overall brand position.

Dominate the best locations in the store to up-sell and cross sell the private brand.

Retailer have the additional advantage of knowing the national brands merchandising tools to use for their house brands.

Retailer will have a first look at what competitive national brands are doing to support their lines and can react to the competition.

Retailer will be able to give the private label brands the best locations when doing their planograms and space allocation.

Retailer will be able to allocate secondary space such as end caps and seasonal shelf space to their private brands.

Retailer can up sell their private brand especially when they implement a segmentation positioning by also selling a enhanced premium product in the same category.

Retailer can cross sell products with on-packs or couponing. Example: private brand cheese with private brand crackers.

The private brand products advertising will have the same voice as the retailer advertising and create Brand Synergy.

Part of the overall Public Relations will be the integration of the Private Brand products into the overall company mission.

With validation by outside sources, the private brands gain true brand identity in the marketplace.

Retailer can monitor sales by SKU, product line and category.

With IT investment, the retailer knows with categories will produce the most revenue and profit.

Retailer now has the control of changing the marketing mix to enhance his own private brand position.

Brand Management teams Private brands need the same business planning that the national brands have.

Promotional support Private brands need to be an integrated part of the retailers overall promotional calendar.

Advertising Like national brands in order grow, the retailer has to put support dollars behind their private brand.

Conducting product and line review to determine if the brand position is being supported.

Supporting the Private brand through in-store banners, signage, Point of Purchase displays, circular and insert advertising, Television and radio advertising,web site support

Brand Management will have the responsibility of new product line extensions based on demand from consumers and competitive products.

Brand Management will also update and discontinue product that no longer meet revenue and profitability goals.

New Product Development teams will stay current with emerging trends and new competitive product introductions.

Responsible for the recommendation of new categories that are grocery and non-grocery related.

Maintain the Private Branded position for new products.

Quarterly assessment based on revenue and profitability.

Measurements of consumer transactions and size of purchase.

Measurement of dollar share and market share.

Updates and product improvements as warranted.

Business

Private branding primer1