March 10, 2007

Restoring trust in the brand

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It ’ s no secret that private-label brands have been gaining market share steadily at the expense of regional and national brands. But what ’ s striking about the latest independent study of store brands is that the growth is trickling down from food and beverage to non-grocery categories.

Don Planche is Executive Vice President at Globe Electric, a Montreal-based company that manufactures and packages dozens of private-label SKUs for stores such as Lowe ’ s and BJ ’ s Wholesale Club. Planche echoes the study results by noting that consumer sentiment has shifted somewhat. Where consumers once placed supreme trust in the brand, they are now more inclined to trust the store where they shop. Trust in individual brands frequently ranks second.

An often-cited statistic in marketing circles is that consumers make 70% of their purchase decisions in the store. This means that a strong majority of them enter a store perhaps knowing what product they want to How to make market research work for you. buy, but they have no specific brand in mind.

In other words, this latest research lends credence to the argument that consumers ’ destination is increasingly becoming the store rather than the brand.

Do these developments spell doom for regional and national brands? Of course not. But they do provide opportunity. Pick any category and it ’ s easy to identify brands that shoppers purposefully enter the store to purchase, because they trust those brands. A useful exercise is to have your creative team examine how these brands earned trust. Then, apply those findings to your own brand. You just might learn something about how your brand stacks up against the growing influence of private- label brands.

Jim George, Editor-in-Chief






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