Private Label, my friend ~ Brand Mix

Sunday, September 9, 2007

Private Label, my friend

Back in the day, when I was a brand manager at Nestlé, this kind of thing used to drive me crazy. I was working on Coffee-mate at the time and every grocery store had their own creamer that looked more or less like ours. "They're stealing our brand. Consumers will be confused. How can they get away with this?", I would rant.

Then I had a moment of realization. Better they just try and copy us than actually do something different. If they are copying, they are following and, if we are half way decent at our job, we should always be able to stay out front. I came to think of Private Label, if not my friend, then at least someone I could easily live with. In fact, I found that these me-too products were helpful - they provided a certain fear factor I could leverage to protect my marketing budgets so I could keep investing in product innovation and brand building.

I'd be much more worried these days. More and more retailers have discovered that it's better to be a leader than a follower and are using their own label products as ways to differentiate themselves from other retailers. Innovative companies like Costco and Trader Joe's led the way but now more traditional stores like Safeway are following suit.

Manufacturers that have been underinvesting in their brand or spending too much money on short-term promotions now find themselves in a very tough position and it's not surprising that Private Label sales are surging.

So, if I was the Benadryl brand manager, I'd be thanking my lucky stars that Walgreens, in this case, has shown so little imagination.

No comments:

Blog Directory - Blogged