Are brands as important as they used to be? Back in the days when there were only a few A-brands in every product category, consumers faced a much easier choice. Now consumers can choose between dozens of brands, even when only looking for tissues or toilet paper. And that’s without counting the online, international possibilities. So, does brand value even make a difference anymore? Do consumers nowadays only choose products based on availability, convenience and price? Of course, the importance and weight of brand value depends on product category and the involvement of the consumer towards a specific product category. But is it still important for brands to invest in brand image and reputation?
As always, there are multiple sides to each story. It’s the same for this one. And let me warn you, it’s kind of complicated.
On one side, there is the theory of Lovemarks. This model is designed by Kevin Roberts, CEO of Saatchi & Saatchi, in 2004. It tells about brands that are so remarkably inspirational that they are the future beyond brands and they provoke loyalty beyond reason. They transcend brands. And they had to work very hard to gain this status. Achieving the Lovemark-mark is the Walhalla of brands. It is what every brand wants, but is only achievable for some.
This Lovemark-theory all sounds great. But we must not forget that being a Lovemark also implies keeping this image up-to-date. And that is easier said than done. These brands invested heaps to become one and are expected to keep up these investments. The marketing and image reinforcement of these brands has to be always-on, in mass media and targeted media. Because otherwise all previous efforts will be forgotten in the blink of an eye. People are forgetful, unfortunately.
Being a Lovemark or not; it’s all just a snapshot of one specific moment. Lovemarks manage to establish deeper and more emotional connections with their fans than other brands. Yet, this connection can vanish like fresh snow within weeks or days. The news of one big blunder or scandal can nowadays spread fast like a disease and blow up all brand equity or image at once. Or, the brand can be this strong that it survives and takes over the market again. Just take a look at Volkswagen’s sales figures, when the news about their scandal had passed.
I told you it is complicated.
FMCG private labels as truly established brands.
Now, let’s focus on the other side of the story. For this, we will narrow our scope to the food FMCG.
In the 80’s there was already a shift towards the ‘private label’. Previously, the FMCG brand marketeers had all the power. They lured people to the retailer, and thus they should have the power, was their way of thinking. Later, retailers began to question this balance of power. They owned all the fresh products and started producing own-label products. This way they could take over power of a large part of their own floor- and shelf space.
These own-label products gained in quality. Rivalry for in-store space all over the place! And the losers of this story are the B and C-brands that no longer could compete. They disappeared from the shelves at the big retailers. And the own-label products, they kept on gaining power and quality. Nowadays, they are as strong as A-brands. For example, let’s look at the ready-made meals from Delhaize. In collaboration with top chefs they really pull of the A-brand image. And that’s no wonder. With the current high-quality standards for products, every brand that passes these tests can be seen as a high-quality product.
Even own-label products of discounters flourish. Because even with their image that’s a little below the brand of other retailers, they are qualitative and there are still enough suitable moments and places to consume their products. And this way, they also take up a big share of their own sales.
And the other A-brands on the retailers shelves, they feel the pressure. That’s why they are becoming more and more creative when filling in their marketing mix. Especially when looking at the promotion and place. Obviously, online is now the new place to be. Experiential is the buzzword. And concerning price: they go deep. Remember the 1 + 2 for free promotion at Albert Heijn.
We should conclude that own-label brands can no longer be called ‘private labels’. Because they are truly established brands. Let’s all vouch for the use of names instead of this term that’s simply too general and unremarkable.
Brands need guts.
There are still a lot of brands in between the Lovemarks and the own-label products. What should -or more importantly- shouldn’t they do? Above all, they can’t forget to invest in their brand image. It still remains the main reason why people buy their products and it will always stay that way. Ok, from time to time people do buy products because of promotions and other temporary factors. But if brands want to remain powerful and if they want to be bought repeatedly, they need to invest in their brand story and personality. Just ask Byron Sharp from ‘How Brands Grow’ what price promotions and price-focused campaigning can do to your brand. Let me give you just a little hint: it’s not good.
Recently, it has been notable that not a lot of brands are reinforcing their brand image through campaigns. They are focusing on specific products or, even worse, on price. This way they are degrading the image of their own brand. Because what respected brand only focuses on price? People don’t buy A-brands for the attached price. No, they buy these brands for the experience, image, taste or the look and feel. When people only start to pay attention to price, we can officially invoke the end of marketing. And then, that’s it.
Overall, it comes down to this: brands need guts.
Like Apple, when they launched the Ipod. A product no-one would ever use or desire. Or Airbnb. Who would ever want to go on a vacation and stay in someone else’s house? Yuk. Or like marketing a mobile phone, because who would want to be available 24/7? I think you get my point.
Consumers have no idea what they want until they can buy it. Even when there is not yet an existing ‘need’ for your specific product, you can still create one. Consumers think they know what they want, or what they’ll use 3 years from now but they are not really creative. We must be aware that the guts and creativity of marketers and entrepreneurs is vital to market new, innovative and pioneering products.
And these guts are not only desirable when launching a new product. Brands also need guts when thinking about communication and advertising. Just take a look at what happened to Nike’s sales when they used Kaepernick in their advertising. Brands need to be daring. People buy brands because they want to be identified with the image of these brands. And who wants to be seen as dull anyway?
Source: New Brand Balance 2019 – Dentsu Aegis Network
Written by Peggy Storme – Junior Consultant