CPGmatters: What Are Top Ten Best Practices for Private Label Promotion?
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
Increasing store brand sales calls for building innovative marketing strategies. The best way to do that, says Professor Mark Lang of St. Joseph's University, is to borrow a page from the brand manager's playbook. In other words, learn how brand management best practices transfer into the promotion of store brand products.
"A good cycle of promotions will assure that private label will maintain gains during the recession," said Mr. Lang recently in a presentation at the annual Food Marketing Institute (FMI) conference and trade show in Las Vegas.
He reviewed the basics of promotion including its common elements and the Top Ten Best Practices. What is the objective of all promotions? "Obviously, it's to increase sales," he said.
Mr. Lang listed the following
common elements of a promotion:
- Offer - What are you giving? TPR (temporary price reduction), other?
- Message - What are you saying?
- Display - Where and how are products presented?
- Delivery - In-store (controlled by the retailer) or out of store (controlled
by media)
"All of these elements work together to create a promotion," he said.
Here are Prof. Lang's Top Ten Best Practices:
- Get organizational buy in.
- Focus on the target customer. ("Who is the subset of the population being targeted?" The promotion must be built for that target.)
- Don't promote on price. ("You don't want to habituate on price. It's a slippery slope.")
- Use the store brand as a feature item.
- Partner with national brands. ("You can partner and collaborate on retailer-generated promotions." Examples include Comet cleanser and Safeway towels; Nabisco cookies and Target milk.)
- Cross promote. (grocery with fresh foods)
- Leverage symbolic products.
- Promote solutions. ("Multiple executions add up to store loyalty.")
- Branded execution (Use integrated marketing for consistency across packaging, POS, etc.)
- Mix and match. (combine two or three elements in one promotion)
In response to a question from the audience, Prof. Lang singled out Wegmans, Publix and Trader Joe's as retailers doing an outstanding job promoting store brands.
Sales of store brand products topped $86.4 billion across the major U.S. retail channels over the past year, according to the latest data compiled by The Nielsen Company for the Private Label Manufacturers Association.
In supermarkets alone, where market share in units reached an historic high of 23.7 percent, store brands growth outpaced national brands by a spread of eight basis points and dollar market share also set a new record at 18 percent. Store brands accounted for 90 percent of the sales growth in supermarkets, adding $1.5 billion in incremental sales (+2.9 percent), while national brand sales were virtually flat for the year at +0.1 percent.
Discussion Questions: In what areas do you think private brands of supermarkets most lag behind national brands? Which of the promotional practices mentioned in the article do you think are most critical?