Saturday, November 7, 2009

Copy cat package design and house brands

Marketers are losing upto $2B in sales annually as consumers are reaching out accidentally to home brands with similar packaging , according to a recent report that I read. Not sure if it is an accidental switch as it is claimed to be. Most consumers hard hit by the recession are more than willing to switch to the house brands. Why would I pay an extra dollar for Glad trash bag, when I do not get to flaunt the widely recognized brand name in front of anybody and I dont care too much about the quality as long as it can hold my trash.

Where would consumers be truly reluctant to switch to a house brand? I do agree there are some areas:

1. Pharmaceuticals: no way I want a Shop-Rite's version of Tylenol- it might just add to my headache later

2. Beauty products: I wouldn't want to mess with my face- I dont want that get that Amrish Puri look

3. Certain food products: this may be the greatest gray area ias this would vary from person to person. Changing from Aunt Jemima maple syrup to Shop-Rite version may be a strict no-no for some but maybe okay for others. Some people would continue buying it, just because that was what our family has always bought. But changing from LactAid version of milk to local house brand of milk might be easier. After all, I wouldnt know if LactAid changed it cows!

Housebrands were originally intended to compete with established brands and served as an alternate cheaper option. These are also called "White Label" or "Private Label" products. The house brands are beginning to become brands by itself. "Up and Up" from Target or " No Label" from Loblaw are examples of white label brands. (Loblaw's also has a high end brand called President's choice.). Hopefully retailers would not get into the game of spending huge amounts on these house brands such that these brands lose the competitive advantage that they have today

1 comment:

  1. Recently read in the Economic Times on pricing of private label products in India

    Private labels or in-house brands....are priced nearly 15% lower than their branded counterparts. This is largely because the retailer’s branding efforts are limited to in-store display and promotions unlike that of FMCG brands