Publix BOGO Involves National and Own Brand

Discussion
Apr 12, 2007

By George Anderson

“Buy One, Get One Free” (BOGO) is one of the tried and true methods for supermarkets to move additional product during promotional periods. In most instances, these types of promotions involve a well-known national brand. If you were thinking about the latest BOGO promotion being run at Publix, you’d be half right on that count.

As Supermarket News reported yesterday, Publix is running a promotion over the next five weeks that will pair a well-known national brand and its store brand equivalent. If a shopper purchases the national brand, they get the Publix item free.

Private label executives at most supermarkets have maintained for some time now that their store brands equal or exceed the quality of comparable national brand items while carrying a lower retail price. With its latest promotion, Publix appears to be putting that premise to the test with its customers.

Between April 26 and May 2, shoppers can go to Publix and pick up an 18.2-ounce box of Kellogg’s Raisin Bran Crunch, a 64-ounce bottle of Welch’s Grape Juice and a 12-ounce package of Thomas’ English Muffins and receive their equivalent store brand items at no charge.

Discussion Questions: What will the Publix BOGO national/store brand promotion do to the chain’s relationship with its national brand suppliers? Do you think there will be a high level of conversion from national brands to the Publix private label as a result of this promotion?

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12 Comments on "Publix BOGO Involves National and Own Brand"


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Ed Dennis
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Ed Dennis
15 years 1 month ago

Publix has a great deal of confidence in their products because they specify and oversee the quality. In an era when many national brands are just “brands” that are packed for a corporation based upon the lowest bid, it is easy for an organization like Publix to provide a comparable product or better product for their customers by contracting with these very same packers. Brands are marketing tools who’s pricing and packaging are constantly manipulated to deliver volume and profit for the brand owner. Publix currently does a fantastic job of delivering very high quality products to their customers. If I can buy a comparable product to 57 sauce for 1/3 the cost of the traditional brand then Heinz will just have to find a way to live without the profit my purchase would have provided.

Justin Time
Guest
15 years 1 month ago

Bravo to Publix. A shrewd and wise move.

Yes, national brands are living through the final phase of their love fest with the consumer. That is why Kraft and General Foods are spending so much of their resources to introduce new products and product lines.

Private store brands are on a resurgence. A&P family of banners has proudly sold America’s Choice and Master Choice brands since the early 90s. These lines have expanded over the years and offer the consumer both quality and value. Hey, don’t be surprised if Ann Page and even Jane Parker make a return appearance in the coming years as A&P celebrates 150 years in the business.

Whether they be gourmet or organic, private label brands are here to stay.

Jeffery M. Joyner
Guest
Jeffery M. Joyner
15 years 1 month ago
Publix supermarkets enjoy a very loyal consumer following. I have lived in two markets where they dominate food sales. One of the reasons they enjoy such a great following is service. They are not shy about the service attribute and are pretty good at it too. Another attribute where they excel is quality. Publix has a long reputation of providing quality products to its very loyal customer base. While Publix has competitive pricing, they have never really been one to bet on price being the primary factor that wins consumer loyalty. Now Publix has raised the bar substantially with this unique promotion. They are in essence saying to consumers that we are producing very high quality “own brands” and we are not afraid to prove it by providing you an “almost free sample.” For the consumer this is a big win. Each who participates will most likely enjoy the experience with the Publix brand. For some this will be like getting a free prize since they are already sold on the “Publix brand.” For others… Read more »
Kai Clarke
Guest
15 years 1 month ago

Publix is creating a great environment for both their store brands and the national brands they complement. It is important to recognize that store brands are a complement to national brands. Great national brands stand on their own merit (like Coke) regardless of their surrounding store environment. Getting consumers to “try before they buy” is the greatest obstacle that any store brand has. Publix is willing to forsake short term revenues in order to get their product into the consumer’s hands. This is the BEST way to get consumers to try it (while they are using the national branded product) and to rapidly get conversion to a store brand. This approach is innovative and has only an upside, since the mid and long-term revenues will certainly outweigh the short term costs. Store brands have born this out time and again, and this promotion will be on more success that underscores the profitable presence that store brands represents.

Bobby Martyna
Guest
Bobby Martyna
15 years 1 month ago

Raises some interesting issues, including possibly a value hit on the private label product. Wouldn’t it have made more sense to structure it as “buy the private label brand and get the national brand for free”? Might have cost a little more, but the emphasis on paying for value in the PVL brand is embedded in the reverse concept.

David Biernbaum
Guest
15 years 1 month ago

Publix BOGO promotion where consumers get the store brand free with the purchase of the national brand is a creative and courageous endeavor to help build consumer confidence in the store brand program. I believe this is a very smart endeavor and I do not believe for any number of reasons that it will hurt the national brand. The last 20 years has demonstrated that 80% of consumers are brand oriented while private label has grown to 20% or more, up from under 5% as recently as the 1980s. What this promotion will accomplish is to bring a very positive image to the Publix store brand program, and both brands will benefit from the promotion. Private label manufacturers better be up to the task of assuring Publix that their products are national brand equivalent or better, or else the promotion could backfire.

Gene Hoffman
Guest
Gene Hoffman
15 years 1 month ago

If Publix’s private labels are as good as national brands, and I suspect they are, the customer will get two equally good products for the price of the national brand item(s). Both brands will get promoted and the national brand loyalists will get to test “free” the corresponding private label. I vote that this is a smart move by Publix and trust the national brands are still staying ahead of private label quality and value. Otherwise, there’ll be some product switching after the 5-week test. The burden is on national brands to prove they are worth a few cents more in today’s marketplace.

David Livingston
Guest
15 years 1 month ago

If customers don’t know by now that the store brands are as good as or better than the national brands (except when it comes to catsup and toilet paper), they probably never will learn. This is good for the national brand companies because it promotes their products as well.

I’m always encouraged to see Publix try out new ideas and find ways to succeed. Especially at a time when its competitors, such as Winn-Dixie and BI-LO are just trying to figure out how to remain alive.

Ken Wyker
Guest
15 years 1 month ago
I think that evaluating the impact on the specific brands involved misses the point of the Publix promotion. This is more of an advertising program for Publix brand than it is a promotion for the specific items involved. This is a smart move by Publix because it is innovative and sends the message that they’re prepared to literally go head-to-head against the national brands. That message will benefit their entire line of Publix brand items as customers will assume that if the grape juice is just as good, the peanuts and ice cream probably are as well. My guess is that the items involved were very carefully selected by Publix. They most likely are the items that have tested well against the national brand items in taste comparisons and have a reasonable price advantage versus the national brands. The message is that you can pay less and not sacrifice on quality. I’m not sure how this promotion might affect their relationship with the national brand manufacturers, but I think their focus is on their customers,… Read more »
Mark Lilien
Guest
15 years 1 month ago

Publix’ BOGO promotion is terrific because it’s so simple! It should attract everyone but the people who could never be reached anyway. There’s nothing the famous brands folks can say in rebuttal except: all comparisons work 2 ways. Some customers will prefer the national brands. Let’s see if there is any lasting change in the private label share at Publix.

Liz Crawford
Guest
15 years 1 month ago

Well, you have to hand it to Publix for creating a heck of a trial program. Sure, conversion will be high; they are obviously confident enough in their product performance to bet the farm.

As regards the relationship between Publix and these National Brands–let’s just say that this doesn’t make for cozy pillow talk.

On a macro level however, this move signals the end of an era. The dominance of National Brands is coming to a close. Retailers have both strategic and financial incentives to create and promote private label. To stay alive, National Brands will have to 1.) occupy the very high end of the market, or 2.)occupy niches and/or 3.) innovate at the speed of light.

Bhupesh Shah
Guest
Bhupesh Shah
15 years 1 month ago

I don’t think that this promo will strain the relationship. In fact, it might strengthen it as national brand owners realize that their distribution and exposure on shelf is determined by how well they support their customers – even if it puts a dent in their volume.

In those cases where the volume swings towards the Publix brand item, the national brand owner will have a further impetus to create unique value that warrants the higher price point. By the same token, retaining the volume will indicate where the national brands are stronger in providing value and this will give them leverage to negotiate greater support from the retailer.

Handled well, it could be a win-win for both parties.

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