New Stretegic Brand Management - Chapter 5
Post on 07-Aug-2015
- 1. Produced by Kevin Almeida CHAPTER 5: MANAGING RETAIL BRANDS
- 2. Produced by Kevin Almeida Content Evolution of the Distributors Brand Why sell Distributors Brand? Should manufacturers produce goods for DOBs? The financial equation of the distributors brand The three stages of the distributors brand Factors in the success of distributors brand Launching a Store Brand: Eight Steps Optimizing the Store Brand Marketing Mix How trade brands become real brands
- 3. Produced by Kevin Almeida Evolution of the distributors brand The notion of private label categorizes the distributors brand as a thing apart, and not using the word brand therefore fails to account for the true reach of distributors brands. Distributors now manage their brand portfolios as part of an overall vision for the category and for the store. They have to choose their brand mix for each category segment, and make a decision with regard to the type of brand to offer. In terms of nominal relationship to the store, a distributors brand may either carry the name of the store or its own name: one or the other. Eg: Store endorses its own products: All Marks and Spencer products are called St. Micheal. Denoting the forms of distributor brands; The OWN Brand or PRIVATE LABEL has its own name and doesnt refer to the company name. The COUNTER Brand The POSITIONING Brand offering the best quality / price ratio, position themselves on trends or in the premium segment.
- 4. Produced by Kevin Almeida How retail brands innovate The function of the national brand, the big brand, is to supply progress through innovation, change, fashion, design and so on. Can the distributors brand also innovate? Its business model assumes light marketing in order to reduce the costs linked to the dozens of product managers. A common riposte is that distributors brands were the first to introduce innovation in terms of packaging. Eg; turning shampoo bottles upside down.
- 5. Produced by Kevin Almeida Consumer relationships with distributor brands Distributor brands are perceived as genuine brands, with their attributes of awareness and image always combines with an attractive price. The consumers proximity to the brand moves from feeling of presence (awareness, recognition) to a feeling of relevance (its for me) to the perception of performance and a clear advantage, and ultimately to a genuine affective attachment. Engagement personal involvement with the brand measures a strong relationship with the brand, meaning if the brand were not there, the client would prefer to wait than buy an alternative. Engagement comes in two sources 1. Strong perception of the proximity 2. Satisfaction linked to a perception of difference in product performance.
- 6. Produced by Kevin Almeida Why sell distributors brands In the mass consumption sector, the early distributors brands are almost always born of a conflict between the distributor and the producer. Consumers are selective. They decide in which categories they are the most tempted to buy distributors brands: those in which they have a low degree of involvement. (Kapferer and Laurent, 1995). Brands exists wherever customers perceive a higher risk in purchasing.
- 7. Produced by Kevin Almeida Cont. The distributors brand makes it possible for large stores to present themselves as objective allies of local and regional SMEs against the multinationals. Mass distribution does not always have a good image. The crushing of small businesses has contributed in large measure to the desertion of town centers.
- 8. Produced by Kevin Almeida Manufactures producing goods for DOBs The following arguments advances in producing DOB goods; It relieves the burden of fixed costs. Allows them to benefit from economies of scale. May be intrinsically profitable, since there is no need for marketing, communication or sales force. If no execution, their competitors will.
- 9. Produced by Kevin Almeida The financial equation of the distributors brand The principle of ROI, in understanding why the distributors brand is an advisable step; Net Margin = Gross Margin Costs Stock Rotation = Sales per square meter / Investment per square meter ROI = Net Margin * Stock Rotation This has been the key differentiator component from the outset for the following brands;
- 10. Produced by Kevin Almeida The three stages of the distributors brand First Stage: is known as reactive or oblative; This is how, many own products are born. A category management approach quickly identifies those segments where something should be offered to the client. Second Stage: is imitative; Distributor examines its competitors distributors brand ranges, and sets about imitating them, producing the same products typically supplied by its other competition. Third Stage: is the identity stage; The distributors brand is used to capture market share from the competition. It becomes a genuine instrument of strategic differentiation, expressing the identity, values and positioning of the store itself.
- 11. Produced by Kevin Almeida
- 12. Produced by Kevin Almeida Factors in the success of distributor brands The rise of a new brand is also the result of the actions taken by the competition. Factors for distributor brands market share; The size of the potential market: the distributor opts for long production runs The high margin in the sector The low advertising expenditure The ability to achieve quality Consumers price sensitivity. (Hoch and Banerji) 1993 It is known that a factor does affect the penetration of distributors brands is the rate of innovation in a sector. The success of distributor brands is linked to a supply effect but also by a lack of competitiveness from high-profile brands, which are too used to high margins, and do not innovate. This penetration depends on the specific range of category. Consumer degree of involvement (Enduring sense or as a temporary feeling at the moment of purchase)
- 13. Produced by Kevin Almeida Launching a store brand Retailers have to take sales and margins from their own suppliers, not only through better trade conditions, but by selling the products under their own store brand. Once the decision is made, eight specific steps should be followed; 1. Specify the reasons why the retailer needs a private label now. 2. What products should be covered? A private label policy certainly grows in scope through time and experience. 3. How many price lines should be there? 4. How many brands should there be? 5. How far should retailers go in the specifications? 6. Proposals should be really launched. 7. Validate the choice of supplier. 8. Launch inside and outside.
- 14. Produced by Kevin Almeida Re-cap Evolution of the Distributors Brand Why sell Distributors Brand? Should manufacturers produce goods for DOBs? The financial equation of the distributors brand The three stages of the distributors brand Factors in the success of distributors brand Launching a Store Brand: Eight Steps Optimizing the Store Brand Marketing Mix How trade brands become real brands
- 15. Produced by Kevin Almeida QUESTIONS?
- 16. Produced by Kevin Almeida THANK YOU
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