For my critique I read Seth Godin’s blog called “Sixty to Zero” and formed the following opinions:
Godin writes about how car companies always market acceleration and other features related to speed but do not market braking. He isn’t meaning for this to be the main topic of the blog, but it is an interesting thought. My conclusion is that braking is not exciting and does not sell, unless the company is Volvo (actually Volvo has a commercial airing right now about automatic braking on the new S60). Acceleration can be a point of difference that makes a car superior to other cars, while it is a basic and rational expectation of the consumer that the car can safely brake in a reasonable time. Fast acceleration is a luxury while braking is a necessity.
Ok, what Godin is meaning to get to is that sometimes marketers have to hit the brakes hard and find out where they are, such as in the newspaper industry. Marketers and the industry in general have no clue how to save print papers. I get all of my news online and feel that my generation will be the generation that kills the print-newspaper industry. A lot of factors come into play on why my generation is not subscribing to papers: (1) all of the information can be found online, plus we can find more specific articles that we want to read; (2) newspapers create a lot of waste and require a large amount of energy to print and deliver; (3) newspaper subscriptions are an added cost that is not necessary; (4) and the list goes on.
Godin makes some bold claims, such as 90% of sales will come from word-of-mouth or digital promotion by 2011. I agree that both are important and word of mouth can be extremely successful, but I do not see where this number comes from. There are many other mediums that marketers use to reach potential customers which I believe account for over 10% of sales. The 2011 deadline may be a little short too since not everybody has the Internet or a PC.
Another claim made is that outsourcing will improve in technology so much that it will be cheaper to outsource than do anything in-house. I agree more with this claim, but sometimes data is confidential and contains business secrets so in-house data functions will always be around. Most outsourcing firms do have a greater competitive advantage and larger economies of scale, but it is unlikely businesses, especially small ones, will outsource everything.
One last claim is that there will be no major print editions of major newspapers by 2012. While print is on the way out the door, it can’t be counted out too soon. Many consumers just like the experience of sitting down to coffee and the paper in the morning and will continue to do this. Large newspapers will likely consolidate or charge higher prices before they completely go away. Once again this is another claim by Godin with no support to back it up. 2012 is in the not-so-distant future and while a few papers will almost surely go under, not everyone will. I think of the Wall Street Journal when this is mentioned; the Journal has a large readership and will likely outlast many of the other papers due to its quality and relevance to the business industry.
After reading the blog and seeing how staples like the newspaper are slowly going away I wonder what other mediums will disappear. In the not so distant future it is likely that cable and satellite may be old news when consumers have on-demand access to every TV show ever made via televisions connected to online databases. My TV viewing habits have been altered due to programs being offered online for free and I see this as a topic that will be important in the future.
Tuesday, April 21, 2009
Monday, April 13, 2009
Paper Outline
Professor Walls, one of my key concerns is that I am writing a paper more focused on private label products and not on insights and experiences. If you would provide feedback on this it would be great. Also, I have not formed all my recommendations yet so I can leave room to be open to additional ideas. I plan to visit several stores this weekend, such as Wal-Mart, HEB and Whole Foods to try to gain insights that I can use in my paper.
I. Introduction
Private label brands provide customers with excellent savings compared to leading national brands, but often do not connect with the customer and achieve the same level of loyalty as leading brands. Lower pricing is the underlying reason most consumers purchase private label products, but past this point the brand/product does not offer the consume the same benefits as a leading brand, such as using Crest with its strong reputation compared to a store brand toothpaste. Gaining insights about how and when customers will use a private label product will benefit both the retailer and the consumer.
Topics to be discussed in the Body are:
i. Article Review
ii. Price Comparisons
iii. Packaging
iv. Risk Reduction in Product Choice
v. Image of Store and Product Association
vi. Loyalty Programs
vii. Successful Private Label Extensions
viii. Personal Opinion and Insights Gained
Body:
Article Review
-In this section I will review articles that I have found; publications include AC Nielsen, Journal of Retailing, Private Label Buyer, and Retail Merchandiser. By beginning with an article review the base of the report can be set up to give the reader a better understanding of some underlying themes the paper will include. Main themes in the paper are listed below and expanded on.
-Price Comparisons: Price comparisons of private label products by category will be expanded on from the AC Nielsen article and Private Label Buyer. Since price is the underlying factor in the purchase of private label brands it is important to begin my article review with this topic.
-The Categories Private Labels are Most Successful: The AC Nielsen article does a great job of breaking down product categories where some private labels even lead the market. An analysis of market share will also be included. Packaging of products can be included in this review too since the packaging of private label products are often associated with the category.
-Risk Reduction: The article in the Journal of Retailing breaks down the role of risk reduction in the purchase of private label products. This is an interesting topic and can lead to insights that will be discussed in my opinion section. Customers will often avoid the purchase of private label products that are highly visible to others and that may receive negative reactions from their peers. Consumers also try to minimize the chance of making a mistake in their purchase by sticking with well-known national brands instead of opting for the less expensive private label.
-Image of the store and associated private label products: Different types of stores choose what products they will produce as private label to be consistent with their image (e.g. Wal-Mart vs. Whole Foods). This topic will also be discussed more in my opinion section.
Personal Opinion Section and Primary Research
In this section I will expand on my secondary research and add my own professional opinion. I will include data that I collect from stores, such as packaging images and prices, for a point of comparison.
-Loyalty Programs: Stores could implement a loyalty program that promotes the continual use of private label products. If a customer is satisfied with the private label products they would be more likely to try other products produced by the store. This type of program could help build a relationship between the company and customer that could lead to other insights. Also, information could be gained on purchase habits and frequencies if a loyalty card is used.
-Private Label Packaging: I would like to include images of private label products that I think the packaging either successful or unsuccessful. Insights could be drawn on patterns and recurring trends in packaging that customers like or dislike. Proper packaging is important for a private label brand to compete with strong national brands.
-Analysis of Product/Store Image: An analysis of the relationship between private label products and the store that produces them can lead to different strategies that can improve the customer-product relationship and lead to insights. I think Whole Foods does a good job at this and would like to expand on their strategies that I think other private label producers could benefit from.
-Refund Policies: Since customers perceive risk when trying a new product that is not a national brand a refund policy if a customer is not fully satisfied could help reduce this risk. An analysis of major private label producers’ policies will be a main source for this section. HEB’s refund policy has encouraged me to try their private label products.
-Open Section: After I conduct my primary research I believe I will gain more insights about the private label consumer. I would like to keep an open mind so that I can add to what I have already learned. I am leaving a section open here so that I feel comfortable adding on to the outline and to encourage additional insights too.
Conclusion:
Private label brands provide an excellent value to consumers, but they usually stop marketing at this point. Gaining more insights about their main consumers and the consumers’ behavior can not only benefit the companies, but the consumer as well.
-Revisit both secondary and primary research
-Emphasize key insights that can be easily implemented
-Closing thoughts
I. Introduction
Private label brands provide customers with excellent savings compared to leading national brands, but often do not connect with the customer and achieve the same level of loyalty as leading brands. Lower pricing is the underlying reason most consumers purchase private label products, but past this point the brand/product does not offer the consume the same benefits as a leading brand, such as using Crest with its strong reputation compared to a store brand toothpaste. Gaining insights about how and when customers will use a private label product will benefit both the retailer and the consumer.
Topics to be discussed in the Body are:
i. Article Review
ii. Price Comparisons
iii. Packaging
iv. Risk Reduction in Product Choice
v. Image of Store and Product Association
vi. Loyalty Programs
vii. Successful Private Label Extensions
viii. Personal Opinion and Insights Gained
Body:
Article Review
-In this section I will review articles that I have found; publications include AC Nielsen, Journal of Retailing, Private Label Buyer, and Retail Merchandiser. By beginning with an article review the base of the report can be set up to give the reader a better understanding of some underlying themes the paper will include. Main themes in the paper are listed below and expanded on.
-Price Comparisons: Price comparisons of private label products by category will be expanded on from the AC Nielsen article and Private Label Buyer. Since price is the underlying factor in the purchase of private label brands it is important to begin my article review with this topic.
-The Categories Private Labels are Most Successful: The AC Nielsen article does a great job of breaking down product categories where some private labels even lead the market. An analysis of market share will also be included. Packaging of products can be included in this review too since the packaging of private label products are often associated with the category.
-Risk Reduction: The article in the Journal of Retailing breaks down the role of risk reduction in the purchase of private label products. This is an interesting topic and can lead to insights that will be discussed in my opinion section. Customers will often avoid the purchase of private label products that are highly visible to others and that may receive negative reactions from their peers. Consumers also try to minimize the chance of making a mistake in their purchase by sticking with well-known national brands instead of opting for the less expensive private label.
-Image of the store and associated private label products: Different types of stores choose what products they will produce as private label to be consistent with their image (e.g. Wal-Mart vs. Whole Foods). This topic will also be discussed more in my opinion section.
Personal Opinion Section and Primary Research
In this section I will expand on my secondary research and add my own professional opinion. I will include data that I collect from stores, such as packaging images and prices, for a point of comparison.
-Loyalty Programs: Stores could implement a loyalty program that promotes the continual use of private label products. If a customer is satisfied with the private label products they would be more likely to try other products produced by the store. This type of program could help build a relationship between the company and customer that could lead to other insights. Also, information could be gained on purchase habits and frequencies if a loyalty card is used.
-Private Label Packaging: I would like to include images of private label products that I think the packaging either successful or unsuccessful. Insights could be drawn on patterns and recurring trends in packaging that customers like or dislike. Proper packaging is important for a private label brand to compete with strong national brands.
-Analysis of Product/Store Image: An analysis of the relationship between private label products and the store that produces them can lead to different strategies that can improve the customer-product relationship and lead to insights. I think Whole Foods does a good job at this and would like to expand on their strategies that I think other private label producers could benefit from.
-Refund Policies: Since customers perceive risk when trying a new product that is not a national brand a refund policy if a customer is not fully satisfied could help reduce this risk. An analysis of major private label producers’ policies will be a main source for this section. HEB’s refund policy has encouraged me to try their private label products.
-Open Section: After I conduct my primary research I believe I will gain more insights about the private label consumer. I would like to keep an open mind so that I can add to what I have already learned. I am leaving a section open here so that I feel comfortable adding on to the outline and to encourage additional insights too.
Conclusion:
Private label brands provide an excellent value to consumers, but they usually stop marketing at this point. Gaining more insights about their main consumers and the consumers’ behavior can not only benefit the companies, but the consumer as well.
-Revisit both secondary and primary research
-Emphasize key insights that can be easily implemented
-Closing thoughts
Tuesday, March 31, 2009
Free Blog Two
I couldn’t think of anything to write this blog over, so I decided to watch the Michael Shermer Podcast and I’m glad that I did. He made a lot of great points about science, intelligence, and theory that I thought wouldn’t relate to marketing.
As a Led Zeppelin fan I liked the back-tracked Stairway to Heaven segment too. I picked up on the Satan part at first, but when he put up the supposed backwards lyrics I could make myself hear every word since that is what my mind wanted me to hear. I have tried to spin Zeppelin IV backwards on my turntable before but could never get it perfect at 33 rpm. I also thought the images of the Virgin Mary and the smiley face on Mars were interesting too, and this brings me to the point where I relate this to marketing. As consumers we are too trusting and should be more skeptical. Often, like the images and Stairway demonstrations we believe what we are told without testing for ourselves. A real-world example of this would be Tide detergent; supposedly it cleans clothes better and most consumers believe this without testing for themselves. I have always used Tide since it is included in my care packages, but I really don’t know if it cleans better; in fact I likely couldn’t tell the difference between clothes washed in Tide or the leading store brand. Procter and Gamble and the bottle tell me that it cleans better, so like most consumers I believe it. This is true for a lot of different products but Tide stuck out to me.
I also found the part on intelligence increasing three points every decade interesting too. This seems to be true, but after watching the Podcast maybe I should be more skeptical about it. If the average IQ is 100 now that means in 100 years the average person will be considered a genius by today’s standards. When put in a time perspective 100 years is not too long considering the universe is 13.7 billion years old. This brings me to yet another marketing insight: if the average person is a genius in 100 years, will marketing also adapt at this rate to be able to reach customers at the genius level? Some thought on the topic lends to the idea that if the general population is increasing at this rate then most college-educated marketers will adapt at the same rate as well and marketing as a function will be able to adapt too. This is really interesting considering marketing has adapted so much since the 1950’s, but adding the aspect of marketing to geniuses makes it seem more difficult. If most of the consumers are at this intellectual level they might be able to see through some of the thin marketing tactics and analyze things more themselves.
As I said earlier, when I first started to watch this Podcast I thought, “yeah, it’ll be ok to get through the assignment,” but I am glad that I ended up watching it. It was interesting to realize the history of thought behind Saturn having rings, which most second-graders know today to be a fact, when some of the most historic intellectuals of the day battled with the idea. I agree with Shermer that both good theory and science must be combined and one without the other usually leaves questions, but no answers. In my opinion this has been one of the more interesting Podcasts, not to say that the others were boring, but this one really resonated with me and I believe I was able to draw some insights from it. The insights might be more marketer-based than customer-based but in the end both end up almost mingled together.
As a Led Zeppelin fan I liked the back-tracked Stairway to Heaven segment too. I picked up on the Satan part at first, but when he put up the supposed backwards lyrics I could make myself hear every word since that is what my mind wanted me to hear. I have tried to spin Zeppelin IV backwards on my turntable before but could never get it perfect at 33 rpm. I also thought the images of the Virgin Mary and the smiley face on Mars were interesting too, and this brings me to the point where I relate this to marketing. As consumers we are too trusting and should be more skeptical. Often, like the images and Stairway demonstrations we believe what we are told without testing for ourselves. A real-world example of this would be Tide detergent; supposedly it cleans clothes better and most consumers believe this without testing for themselves. I have always used Tide since it is included in my care packages, but I really don’t know if it cleans better; in fact I likely couldn’t tell the difference between clothes washed in Tide or the leading store brand. Procter and Gamble and the bottle tell me that it cleans better, so like most consumers I believe it. This is true for a lot of different products but Tide stuck out to me.
I also found the part on intelligence increasing three points every decade interesting too. This seems to be true, but after watching the Podcast maybe I should be more skeptical about it. If the average IQ is 100 now that means in 100 years the average person will be considered a genius by today’s standards. When put in a time perspective 100 years is not too long considering the universe is 13.7 billion years old. This brings me to yet another marketing insight: if the average person is a genius in 100 years, will marketing also adapt at this rate to be able to reach customers at the genius level? Some thought on the topic lends to the idea that if the general population is increasing at this rate then most college-educated marketers will adapt at the same rate as well and marketing as a function will be able to adapt too. This is really interesting considering marketing has adapted so much since the 1950’s, but adding the aspect of marketing to geniuses makes it seem more difficult. If most of the consumers are at this intellectual level they might be able to see through some of the thin marketing tactics and analyze things more themselves.
As I said earlier, when I first started to watch this Podcast I thought, “yeah, it’ll be ok to get through the assignment,” but I am glad that I ended up watching it. It was interesting to realize the history of thought behind Saturn having rings, which most second-graders know today to be a fact, when some of the most historic intellectuals of the day battled with the idea. I agree with Shermer that both good theory and science must be combined and one without the other usually leaves questions, but no answers. In my opinion this has been one of the more interesting Podcasts, not to say that the others were boring, but this one really resonated with me and I believe I was able to draw some insights from it. The insights might be more marketer-based than customer-based but in the end both end up almost mingled together.
Tuesday, March 24, 2009
The Persuaders
The three-stage technique used by Dr. Rapaille consisted of moving past reason and through emotion to get to the primal core. Dr. Rapaille fit many of the stereotypes of psychologists but his message and impressive list of customers speak for themselves.
Past Reason
In the first step of breaking the code Dr. Rapaille introduces a focus group to a topic and listens to their input. The initial step involves a traditional focus group and a circle of chairs. Participants in the group are encouraged to say how they feel about a topic, such as luxury, and begin to feel more comfortable with the study. Most of the comments made deal with reason in the cortex and are not extremely important in the study; the purpose is to move past the first two steps to get to the primal core.
Through Emotion
Dr. Rapaille stated that participants in a focus group want to show how intelligent they are and this presents a barrier; in order to get past this barrier he gets the members to tell a story about the topic as if the audience was a five-year-old from another planet. The Persuaders did not show much of this step but it could be seen that the focus group was surprised and confused but played along. By having the members tell a story in the simplest form it removed many of the emotions and brought members to the basics of the topic.
To the Primal Core
To begin the third and most important phase of the focus group Dr. Rapialle removed all of the chairs from the room and replaced them with pillows; focus group participants were then encouraged to relax on the pillows with the lights off and think about the first time they experienced the topic or product. After a period the lights were turned on and participants would write about their first experience, which could take them back thirty years and excite the memories they experienced. This brought participants to the primal core and was the main goal of Dr. Rapialle’s study.
One idea that interested me in the reptilian code was the idea that the first time a new product or idea is experienced we imbed and define the product or experience from that first time. This seems intuitive but when I think of coffee I think of my morning routine, not the first time I saw my dad drinking it in the morning. I can see, though, how relaxing and thinking of the first time I experienced the product how the thought of my dad would come to mind. In The Persuaders Dr. Rapialle used the illustration of thinking of mothers when coffee came to mind. I thought it was interesting that we build and build on a first experience of a product, but can still remember the primal core of the product.
I thought the idea of Song airlines was a bit too idealistic and the marketers were a little out of touch with reality. They used and wanted customers to use buzzwords like “that’s song” instead of “that’s cool” to describe their experiences with Song. The marketers also focused only on a specific target market of women during the show; this could be the only part the editors chose to show but if this was the only group they targeted, like in the commercial, they are missing out on many customers. They never addressed business travel and every time I have flown the people in the plane were very diverse, not at all like the upscale, trendy woman the marketers were targeting. I get the image in my head of walking into one of Song’s airplanes and seeing it just completely full of the women they are targeting and it just seems ridiculous to me. With a budget of $12M Song was facing an uphill battle against other giants such as JetBlue and Southwest.
Past Reason
In the first step of breaking the code Dr. Rapaille introduces a focus group to a topic and listens to their input. The initial step involves a traditional focus group and a circle of chairs. Participants in the group are encouraged to say how they feel about a topic, such as luxury, and begin to feel more comfortable with the study. Most of the comments made deal with reason in the cortex and are not extremely important in the study; the purpose is to move past the first two steps to get to the primal core.
Through Emotion
Dr. Rapaille stated that participants in a focus group want to show how intelligent they are and this presents a barrier; in order to get past this barrier he gets the members to tell a story about the topic as if the audience was a five-year-old from another planet. The Persuaders did not show much of this step but it could be seen that the focus group was surprised and confused but played along. By having the members tell a story in the simplest form it removed many of the emotions and brought members to the basics of the topic.
To the Primal Core
To begin the third and most important phase of the focus group Dr. Rapialle removed all of the chairs from the room and replaced them with pillows; focus group participants were then encouraged to relax on the pillows with the lights off and think about the first time they experienced the topic or product. After a period the lights were turned on and participants would write about their first experience, which could take them back thirty years and excite the memories they experienced. This brought participants to the primal core and was the main goal of Dr. Rapialle’s study.
One idea that interested me in the reptilian code was the idea that the first time a new product or idea is experienced we imbed and define the product or experience from that first time. This seems intuitive but when I think of coffee I think of my morning routine, not the first time I saw my dad drinking it in the morning. I can see, though, how relaxing and thinking of the first time I experienced the product how the thought of my dad would come to mind. In The Persuaders Dr. Rapialle used the illustration of thinking of mothers when coffee came to mind. I thought it was interesting that we build and build on a first experience of a product, but can still remember the primal core of the product.
I thought the idea of Song airlines was a bit too idealistic and the marketers were a little out of touch with reality. They used and wanted customers to use buzzwords like “that’s song” instead of “that’s cool” to describe their experiences with Song. The marketers also focused only on a specific target market of women during the show; this could be the only part the editors chose to show but if this was the only group they targeted, like in the commercial, they are missing out on many customers. They never addressed business travel and every time I have flown the people in the plane were very diverse, not at all like the upscale, trendy woman the marketers were targeting. I get the image in my head of walking into one of Song’s airplanes and seeing it just completely full of the women they are targeting and it just seems ridiculous to me. With a budget of $12M Song was facing an uphill battle against other giants such as JetBlue and Southwest.
Sunday, March 8, 2009
Kenna's Dilema
Chapter five of Blink offered many insights, one of the examples I found the most interesting was the story of margarine being turned yellow to sell better. From the way the chapter describes the situation researchers had not given much thought to the small detail that, at the time, margarine was white instead of the typical yellow of butter. I thought it was strange that this had never occurred to anyone in the companies, but this example goes to show that no level of detail is too small for customer insights.
Even though the colors were different between old margarine and new margarine the taste is the same. Customers have such a connection with quality butter being a yellow color that they likely thought that something of another color was inferior. After analysis a marketing consultant was able to pinpoint the problem and the research agreed. At a dinner party people did not even notice the yellow margarine was not real butter, they even commented on how good the bread and butter tasted.
Another twist in this insight was that an aluminum wrapper made the margarine seem like a more prestigious product; I have never associated an individual metal wrapper with quality but after thought realized many champagnes have aluminum wrappers on top of the cork as well as Hershey Kisses. These two insights go to show that no level of detail can be left unturned in products and suggestions that might seem strange, if well founded, can often lead to a solution to the problem. Creativity and out of the box thinking are important in marketing but often answers are right under our noses.
Another insight I thought was interesting was the example of the role of packaging between E&J and Christian Brothers brandies. As the chapter describes, these brandies were considered lower level and their clientele were likely not concerned about taste as much as the moderate brandy consumer, but packaging between the two products was a big determinate on which brand was chosen. E&J beat Christian Brothers in blind taste tests and when it was poured from a Christian Brothers bottle, but the more smooth and exciting bottle design of Christian Brothers appealed to customers better.
The packaging of a product is likely the first thing a consumer sees when shopping and can instantly trigger recognition or the thought of a superior or inferior product. Companies go to great lengths to design packaging that appeals to customers better, but some companies seem to ignore this important factor. It is important to compare packaging within the industry to see what brand sets the standard, but it is also important to test customers on what is most appealing to them. E&J’s packaging seemed to be traditional and something management did not even see as being a problem; this mistake likely cost the company a lot over the years in lost sales and customers.
The design for this experiment seemed fairly easy and I was able to relate it to my Marketing Research and Analysis class. The X and O notation could be made out simply and I liked that the research had many controlling variables. Often complicated research methods are necessary to account for all variables, but in this example an elementary method proved to be effective enough. Often it seems research might go too deep in gaining insights when a large, underlying problem may be the cause of the problem in the first place. I think it is very interesting, though, that consumers’ tastes changed according to the bottle design and a trip through the aisles of a liquor store will show that the bottle or packaging design of a product can really make it stand out and seem superior to other products.
Even though the colors were different between old margarine and new margarine the taste is the same. Customers have such a connection with quality butter being a yellow color that they likely thought that something of another color was inferior. After analysis a marketing consultant was able to pinpoint the problem and the research agreed. At a dinner party people did not even notice the yellow margarine was not real butter, they even commented on how good the bread and butter tasted.
Another twist in this insight was that an aluminum wrapper made the margarine seem like a more prestigious product; I have never associated an individual metal wrapper with quality but after thought realized many champagnes have aluminum wrappers on top of the cork as well as Hershey Kisses. These two insights go to show that no level of detail can be left unturned in products and suggestions that might seem strange, if well founded, can often lead to a solution to the problem. Creativity and out of the box thinking are important in marketing but often answers are right under our noses.
Another insight I thought was interesting was the example of the role of packaging between E&J and Christian Brothers brandies. As the chapter describes, these brandies were considered lower level and their clientele were likely not concerned about taste as much as the moderate brandy consumer, but packaging between the two products was a big determinate on which brand was chosen. E&J beat Christian Brothers in blind taste tests and when it was poured from a Christian Brothers bottle, but the more smooth and exciting bottle design of Christian Brothers appealed to customers better.
The packaging of a product is likely the first thing a consumer sees when shopping and can instantly trigger recognition or the thought of a superior or inferior product. Companies go to great lengths to design packaging that appeals to customers better, but some companies seem to ignore this important factor. It is important to compare packaging within the industry to see what brand sets the standard, but it is also important to test customers on what is most appealing to them. E&J’s packaging seemed to be traditional and something management did not even see as being a problem; this mistake likely cost the company a lot over the years in lost sales and customers.
The design for this experiment seemed fairly easy and I was able to relate it to my Marketing Research and Analysis class. The X and O notation could be made out simply and I liked that the research had many controlling variables. Often complicated research methods are necessary to account for all variables, but in this example an elementary method proved to be effective enough. Often it seems research might go too deep in gaining insights when a large, underlying problem may be the cause of the problem in the first place. I think it is very interesting, though, that consumers’ tastes changed according to the bottle design and a trip through the aisles of a liquor store will show that the bottle or packaging design of a product can really make it stand out and seem superior to other products.
Sunday, February 22, 2009
Private Label
For my research topic I would like to look at private label brands and the customer connection or experience with the products. Private label brands have become more accepted recently in the United States, and have been very popular in Europe for decades. In economic times like now customers are willing to trade off brands in order to save money, and the growth potential of private label brands continues to grow.
Consumers tend to be brand loyal to a brand that they believe gives them something more and are willing to pay a price. Moms choose Crest toothpaste for their kids believing that it is better at protecting their kids’ teeth while others might be brand loyal to Quaker Oats oatmeal, believing it to be healthier than the store brand. Customers usually claim an experience with a branded product, which makes it harder for private label manufacturers to gain the same level of connection and experience.
An AC Nielsen study found that private label growth rate is five percent while manufacturer brand growth is fairly stagnant at two percent. The savings for customers buying private label brands ranges from sixteen percent to forty-six percent less than brand name products. This creates a lot more value for the customer, but many customers are hesitant to accept these private label products as comparable in quality.
An exception to the private label plague is Ol’ Roy dog food, which is manufactured by Wal-Mart. Ol’ Roy is the top-selling dog food, but many customers do not realize that it is a private label; this might be due to the nontraditional private label packaging of the product. Ol’ Roy packaging does not look like the typical packaging that often plagues private label goods. It is likely that Ol’ Roy has differentiated itself from being known as a private label brand, and the success of this strategy has paid off.
This topic is important to me because I think consumers often put too much emphasis on brands and are not willing to try a product that might be more beneficial in price for them, consider these people brand snobs if you will. In the over-the-counter medicine industry my friend in the PharmD program at UT has told me that many private label products are made by the same manufacturers of products that may be three times more expensive because they carry a well known brand name. This topic is also interesting to me and I think there is a lot of future potential in marketing private label products.
The AC Nielsen article was interesting and provided an excellent analysis of private label goods, ranging from growth rates by country to the percentage of savings versus other brands. The article also states that in nine of fourteen countries almost all households have purchased private label goods in the past year; besides lower income households there is no typical private label consumer as well.
The research on the topic will be interesting too, as more and more stores realize how profitable store brand goods can be. A few concerns that I have about the topic are that the information between sources may be similar or product specific; in the course of the project I may decide to focus on one segment of private label goods in order to better understand a segment.
Source:
Nishikawa, C., & Perrin, J. (n.d.). Private label grows global. Retrieved February 23, 2009, from AC Nielsen Web site: http://us.acnielsen.com/pubs/ 2005_q4_ci_privatelabel.shtml
Consumers tend to be brand loyal to a brand that they believe gives them something more and are willing to pay a price. Moms choose Crest toothpaste for their kids believing that it is better at protecting their kids’ teeth while others might be brand loyal to Quaker Oats oatmeal, believing it to be healthier than the store brand. Customers usually claim an experience with a branded product, which makes it harder for private label manufacturers to gain the same level of connection and experience.
An AC Nielsen study found that private label growth rate is five percent while manufacturer brand growth is fairly stagnant at two percent. The savings for customers buying private label brands ranges from sixteen percent to forty-six percent less than brand name products. This creates a lot more value for the customer, but many customers are hesitant to accept these private label products as comparable in quality.
An exception to the private label plague is Ol’ Roy dog food, which is manufactured by Wal-Mart. Ol’ Roy is the top-selling dog food, but many customers do not realize that it is a private label; this might be due to the nontraditional private label packaging of the product. Ol’ Roy packaging does not look like the typical packaging that often plagues private label goods. It is likely that Ol’ Roy has differentiated itself from being known as a private label brand, and the success of this strategy has paid off.
This topic is important to me because I think consumers often put too much emphasis on brands and are not willing to try a product that might be more beneficial in price for them, consider these people brand snobs if you will. In the over-the-counter medicine industry my friend in the PharmD program at UT has told me that many private label products are made by the same manufacturers of products that may be three times more expensive because they carry a well known brand name. This topic is also interesting to me and I think there is a lot of future potential in marketing private label products.
The AC Nielsen article was interesting and provided an excellent analysis of private label goods, ranging from growth rates by country to the percentage of savings versus other brands. The article also states that in nine of fourteen countries almost all households have purchased private label goods in the past year; besides lower income households there is no typical private label consumer as well.
The research on the topic will be interesting too, as more and more stores realize how profitable store brand goods can be. A few concerns that I have about the topic are that the information between sources may be similar or product specific; in the course of the project I may decide to focus on one segment of private label goods in order to better understand a segment.
Source:
Nishikawa, C., & Perrin, J. (n.d.). Private label grows global. Retrieved February 23, 2009, from AC Nielsen Web site: http://us.acnielsen.com/pubs/ 2005_q4_ci_privatelabel.shtml
Saturday, February 14, 2009
Free Blog
The ideal life in America is well defined and has been instilled into peoples’ minds since childhood: two-story house, white picket fence, 2.3 children, a perfect lawn, new car, and of course the corner office. I know from my experience so much emphasis is placed not on following this model exactly, but at least coming close to meeting the expectations. While not all of the expectations are material, most of them are. I have become disillusioned with the idea that success is not measured in material objects. Think of examples of people that are thought to be successful: Bill Gates, Warren Buffet, Richard Branson and Martin Luther King. More often than not the first person to come to mind when the word success is mentioned is a billionaire. Examples like MLK, Mother Teresa and M. Gandhi exist but they are often not the examples that come to mind first even though they are great examples of being successful.
Fortunately for everyone people have been successful in the pursuit of bettering the lives of others, but I think most people define success by owning a certain item further defined by the brand and price. Is it all marketers' fault that people believe this? The answer is definitely no, but it likely plays a part in it. There are many questions I am asking myself lately about marketing products to people and if I think it is something I will say forty years from now was a worthwhile devotion of my life. The answer changes from day to day but has really shifted as of lately. Although we haven’t had any articles that pertain to this subject I think it is important that students realize there are many ethical questions to ask themselves when marketing a product.
Take today for an example: I went on a hike with my roommate and close friend and we had a great time. It didn’t matter what brand of shoes we wore, what kind of water bottle we used, or the names on the backpacks we carried. The things that mattered most were the memories and the experience; I know we have talked a lot about experience in class, but this was a different type of experience. On the trail not much else mattered for those six hours, even the fact that we brought barely enough food to be considered a lunch was fine with me. I was with two of my best friends and we were having a great time; if an experience like that could be marketed then I’m sold. But maybe the reason that we all enjoyed it so much was that we were able to enjoy so much with so little, which could be looked at as a greater value to bring this thought back to marketing terms.
To tie everything together I think often success is viewed as too material and sometimes the best things in life cannot be branded. Many times I find that I am not chasing after my own idea of success, but others. Some people like Bill Gates and Shirley Polykoff are able to find success and help others in products, while other people are not. They believed in their products, something that often diminishes down the ranks of a company. Many insights can be drawn from this, but they are not the type most marketers want to face. Although I wish products and brands didn’t play as large a part in my life the fact is hard to ignore. It was nice to escape everything for a few hours today, but I know that is something I can’t find happiness in everyday. Although students will find their own version of success and happiness in different careers and ways I think it is important for us to evaluate and pursue our own individual definitions.
Fortunately for everyone people have been successful in the pursuit of bettering the lives of others, but I think most people define success by owning a certain item further defined by the brand and price. Is it all marketers' fault that people believe this? The answer is definitely no, but it likely plays a part in it. There are many questions I am asking myself lately about marketing products to people and if I think it is something I will say forty years from now was a worthwhile devotion of my life. The answer changes from day to day but has really shifted as of lately. Although we haven’t had any articles that pertain to this subject I think it is important that students realize there are many ethical questions to ask themselves when marketing a product.
Take today for an example: I went on a hike with my roommate and close friend and we had a great time. It didn’t matter what brand of shoes we wore, what kind of water bottle we used, or the names on the backpacks we carried. The things that mattered most were the memories and the experience; I know we have talked a lot about experience in class, but this was a different type of experience. On the trail not much else mattered for those six hours, even the fact that we brought barely enough food to be considered a lunch was fine with me. I was with two of my best friends and we were having a great time; if an experience like that could be marketed then I’m sold. But maybe the reason that we all enjoyed it so much was that we were able to enjoy so much with so little, which could be looked at as a greater value to bring this thought back to marketing terms.
To tie everything together I think often success is viewed as too material and sometimes the best things in life cannot be branded. Many times I find that I am not chasing after my own idea of success, but others. Some people like Bill Gates and Shirley Polykoff are able to find success and help others in products, while other people are not. They believed in their products, something that often diminishes down the ranks of a company. Many insights can be drawn from this, but they are not the type most marketers want to face. Although I wish products and brands didn’t play as large a part in my life the fact is hard to ignore. It was nice to escape everything for a few hours today, but I know that is something I can’t find happiness in everyday. Although students will find their own version of success and happiness in different careers and ways I think it is important for us to evaluate and pursue our own individual definitions.
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