Focus on value vs. focus on brand
02/18/10 05:51 AM Filed in: Branding
Once you
start cutting price it's hard to raise it again, especially if your
brand has become a commodity because of frequent promotion.
Consumers are redefining value on their terms and to them a lot of
store brands offer better value than national brands. Some brands
like Pepsi & Jello continue to do well during the downturn
because they are clearly differentiated from store brands and offer
consumers comfort at a time of high stress. Other brands like
toilet paper and paper towels, however are not doing so good
because to consumers paper is paper.
In an interview
with Brandweek,
ConAgra Foods’ CMO Joan Chow said
post-recessionary consumers are
"still
concerned about value, so the habits [they]
formed during the last economic recession will
stay with [them]." Chow said the downturn has led
ConAgra to put more ad dollars behind brands like
Banquet. It's the company’s “most important value
brand from a retailer’s point of view,” and is
its biggest consumer brand, with more than $1
billion in annual retail sales, according to
ConAgra's Rodkin. To build on that strategy,
ConAgra is currently testing Banquet fruit pies,
as it looks to extend the brand into “a new
eating occasion,” namely “dessert,” Rodkin
said.
This is a safe bet because research does show that more and more consumers are seeking out comfort foods. As I stated earlier this week brands that cut price risk becoming "me too" brands. Brands that invest in marketing and get closer to their customer needs and wants are going to succeed.
Some brands are
making modifications to stay in consumers good
graces. Campbell announced changes to its
condensed soups, including sodium reduction. The
food giant is focused on tweaking its portfolio
to keep in line with consumer demand for both
“wellness and value,”.
This is a safe bet because research does show that more and more consumers are seeking out comfort foods. As I stated earlier this week brands that cut price risk becoming "me too" brands. Brands that invest in marketing and get closer to their customer needs and wants are going to succeed.
