In times of crisis sales of generic store brands rise. What should premium brands do or not do when faced with this?
increase customer service activities and follow ups
To answer this question, a Tide commercial I recently saw on TV comes to mind. It was very effective. Tide showed their bottle and how much actual detergent versus water was in their bottle versus the competition. Tide had a lot less water than the competition. They stressed that Tide was a leader in laundry detergent because they never compromised their quality and that's why clothes were whiter, cleaner and stayed looking newer longer when washed with Tide. Premium brands should keep their name out there and always identify why they are a premium brand as well as why they are the better choice. They must sell themselves effectively if they are going to get a consumer to pay a little more for their brand during tough times.
In my opinion, they should not diminish the quality and compete with a lower price tag. The sensible thing to do is to appeal to the the customer by showing that their product is worth spending a little more. This can be done by demonstrating that buying a cheaper product can be more costly in the long run.
Premium brands should not try to compromise their products by getting into price wars with generics. Premium brands are premium for a reason and should continue to emphasize why they are.
Do not get into a price war competition! Highlight the added bonus of using your brand over the generic ones.
Reduce their profit margin and boost sales.
In my company can make strategy of discount offers as opposed to huge sales has a more beneficial effect
should do is be careful to take care in attitudes and decision making for both product and customer
This may be one of the most interesting questions, since I just wrote an answer to a question on this concept, more related to how Seniors address purchasing store brands vs.Brand Name products.
Here it is:
Two questions,
What will the next generation of food shoppers look like?
How far away are we from "crossover," the point at which eating in and eating out cost the same? That's where we're going, and we're going to see more and more of the"drive up" or "drive through" windows at brand name restaurants that serve lower-priced meals to the middle-class marketplace.
Combine Cloud Commuting-coming soon to a home near you- and maybe the idea isn't "cooking for the family," the idea is a "good meal for the family." Does it really have to be prepared with my own two little hands?
Oops, three questions.
Will Aldi's profit imperative require Private Labeling to a greater degree, AKA Target?
The Wal Mart experience was "Brand Names for less."
Wal Mart today, along with Target, the major food chains are chasing Private Label (PL) more than ever before.
Food manufacturers have literally let the camel's nose under the tent. There may be no going back.
The food manufacturers haven't helped in some cases with lowering the quality of their branded products, making the Private Label shopping comparison leading to a PL purchase easier, when it should be more difficult, "They are almost the same price, is Kraft's brand Mac n" Cheese that much better?"
If Kraft can't promote a Value Package with a Qualitative difference, they're in trouble, even if their manufacturing margin is the same between the two products.
In the end Limited Assortment Discount Pricing, "Brand Name Only" (my addition) stores with Fresh, Local Produce, quality Deli, on site REAL bakery, and, get ready..here it comes.. No Photo, Pharmacy, Dry Cleaning, or other distraction, may win the race.
Otherwise it's "Pick it up, Baby."
Or, "What did you make for dinner tonight honey?"
"Reservations."   | | |
Show greater relevancy and value
It's all about the blue ocean strategy. Too many marketers believe that by adding a product feature they can compete. But this is a never ending battle of wills. The true success comes through differentiation of significant proportion. Constantly ask, what makes you better? Is it sustainable?
There are two routes to take:
a.) Change the market demographic: cater to higher levels of wealth, people with more expendable income, etc.
or
b.) Change your market strategy: whether it means lowering prices (like lingerie brand "The Lake and Stars") for a quarter, offering bigger deals or joining with a sample sale site.
N/A
They need to stay "competitive" without giving away the house. They should know this is temporary and promote their quality difference as usual.
In times of crisis premium brands need to understand the position they chose to put themselves in. In times of peace and stability, which is rarely, the generic store brands suffer as premium brands do well. It's business and competition you can't have one with out the other. I think it that situation premium brands should lower prices to meet real expectations but do not limit quality. That may create an internal issue, however, in time of crisis people knowing they can get a quality premium brand for a good price will keep them loyal to their premium brand throughout. |
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