Store brand success alarms national brand marketers

By Caroline Scott-Thomas

- Last updated on GMT

Related tags Store brands Marketing

A majority of consumers from around the world say that private label products are at least as good as national brands in providing a range of benefits, according to a global survey from Ipsos Marketing.

The online survey, of 21,623 adults from 23 countries, adds to a stack of evidence that store brands have moved beyond being simply cheap imitations of well-known products toward providing consumers with other benefits that contribute to an overall perception of value. And this could cause difficulties for national brands, Ipsos Marketing said.

More than 80 percent of survey respondents said that private label products were ‘the same as or better than’ branded products for taste, convenience, trustworthiness, and being environmentally friendly – as well as providing good value for money (89 percent).

President of Ipsos Marketing’s global shopper and retail research Gill Aitchison said: “Our data indicates that store brands are challenging national brands on a number of key brand attributes. In essence, the brand experience associated with store brands is matching the brand experience associated with national brands – and that is very alarming for national consumer packaged goods marketers.”

However, there are things that marketers of national brand products can do to regain market share, according to market researchers The Integer Group and M/A/R/C Research. They suggest concentrating on on-shelf messaging, since more decisions are being made in-store; good communication of value; offering a range of product varieties; and continuing to use coupons and rebates.

‘Emotional’ brand benefits

But Ipsos’ Aitchison added that benefits would have to go even further if branded products are to win back customers.

He said: “Store brands are flourishing as a result of product quality improvements in conjunction with the effects of the poor economy on consumers, which has elevated purchasing of store brands. The level of trust in store brands…may mean that shoppers may be less likely to return to more expensive brands in the future unless the benefits really outweigh the cost – and these will tend to be emotional benefits rather than functional benefits.”

Aitchison said that packaging, innovation, uniqueness and quality were national brands' greatest strengths, according to the survey data.

Private label, or store brand, products have seen a huge increase in popularity, with sales up $12bn – 17 percent – over the past two years, according to figures from The Nielsen Company.

The Ipsos survey included respondents from Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, Hungary, India, Italy, Japan, Mexico, Poland, Russia, South Korea, Spain, Sweden, the Czech Republic, the Netherlands, Great Britain, the United States and Turkey. It was carried out from November 2009 to January 2010.

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