Retail Brands - Essay Example

?Retailing has been around for a long time and has developed to quite an extent. The retailing industry has not only had an impact on the social lifeof individuals but also on the economic aspects of life. People have always been selling goods since the concept of money and bartering came into existence. There may have been a change in the manner of payment and so forth but the idea of exchanging goods has been at the core of every industry. Retails as we know them now are an evolution of the barter system of the past and though there have been evolutions throughout history as we grew out of the bazaars and the forums of old to establish the shopping malls and complexes today. Every country has had its own way of development that has led to retailing and branding of products. The retailing market has now become a segmented form of marketing with a particular retailer focusing on a particular group of customers. This is perhaps a way of improving the manner of dealing with the growing needs of consumers who demand more attention in their particular items or products of interests. Retailing is now gaining control of the market shares that were once overtaken by the stores that were individually owned or were in the form of co-operatives. Now there are large retailers with a chain of stores that are focused in a particular location or country such as ASDA, Waitrose, Sainsbury’s and others in the United Kingdom and GAP, Old Navy and JC Penney in the United States of America. However, it is a far cry from saying that retailers have had an easy go at keeping their share of the market. Retailers have had to constantly improve and strive to better understand the needs of customers. It may be easier in a manner that the smaller industries are now becoming less of a challenge for retail giants such as Wal-mart but if the consumers stop spending or the stores lack the technological advancements needed to keep up to the fast paced global market then they will lose out on their share of the profits. There is a lot more to printing your brand name on a product and expecting customers to come and buy it. Retailers have had to go a long way to establish a trust between the name and brand of a company and the end customers who are the ones are picking items off the shelves. Brands are considered to be the logo of a company and it is how customers have come to associate products. A particular brand can even be a way of representing the social status of an individual in society such as the purchase of a piece that is branded by Harry Winston as compared on one that someone may pick up from a rack at Primark. Brands go a long way to help to make customers familiar with particular products whether it is fashion, electronics and so on. Particular retailers such as General Electric have widespread array of products that they sell to the public which range from motor vehicles to small kitchen appliances. Brand loyalty is established over a period of time and how well the product meets the desires of the individuals. Many people prefer a Toyota car over a Honda or that of Ford and this is due to the experience that they may have had with the products over time. If there is brand loyalty then it is more likely that the price of various articles won’t be as much of an issue as long as the customers find that the article is needed (Ailawadi, K. L., 2004). Retail brands such as H&M and Marks & Spencer’s have made use of celebrities to further the influence of their retail brands. Marks & Spencer hooked up with Antonio Bandares (Amanda Andrews, The Times), the Hollywood actor, to campaign for the retail brand to increase sales and the campaign paid off. The brand also featured the fashion icon Twiggy for their campaign to appeal to women and managed to get the attention of their target group as well. The icon managed to shake off the reputation that the brand has of cot carrying fashionable items. Supermarket giant Sainsbury’s products have the retailers brand but there were signs that sales were higher when the products branded by the retailer were endorsed by Jamie Oliver, the celebrity chef (BBC NEWS, 2003). There are some analysts who claim that the association with the chef and the endorsement of the retailer’s brands has brought in extra sales of around a billion pounds. Clearly this behavior by consumers shows that by brand names are not the only factors that can lead to higher sales. Retailers have had to make us of other influencing methods to encourage consumers to spend money on products. This strategy may even fail at times for retailers as H&M was using Kate Moss as the face of their campaign and the scandal involving her alleged drug addiction led to a quick pulling back of the retailer from the deal. Accidents and other mishaps on part of retailers and other giant companies are also a badly influencing factor on sales and perceptions of people. Errors can prove costly at times when it comes to the customer’s loyalty with a particular brand. In the state of Massachusetts in the United States of America it was found that due to errors in scanners there was an overcharging on a number of items (Boston Herald, 2010). Recalls made by automobile companies such as Ford and Chrysler have also caused inconvenience. Chrysler recalled about 150000 of its trucks and SUV’s due to problems in steering, air bags and other concerns (The Wall Street Journal, 2010). Such problems may disconcert customers from buying products from those companies that are now recalling more and more vehicles from the market. Retailers also need to be privy as to their competition. Tesco along with other retailers have been in competition to grab a larger market share. ASDA has had lower prices in various numbers of products causing consumers to leave their particular choice of retailer and move to others. There has been a blow to the world economy and retailers have also had to face the brunt of it. Consumer spending has also been on a decline and there need to be several strategies that need to be employed if retailers expect that the public will again spend in numbers. Wal-mart, the supermarket giant and leader in retailers in the United States has employed a number of strategies and tactics to get consumers to spend. They have even roll backed on a number of items selling them near throw away prices and making customers feel as though they need to spend money on items that are priced so low. Such tactics are helping the brand climb up again and is improving confidence. Retailers have thus been shown that brand names are not enough to enhance sales. Retailers are also more or less at the mercy of the brands manufacturers and the retailers are the ones that store items for the public to consume. Brand marketing is done by the respective manufacturer and so it then falls on the retailer to produce the traffic for the sale of the goods that they store. Retailers need more than a large amount of branded products in their stores to attract individuals. Brands need to be sold through proper advertisement and proper facilities. Customers want to feel that the retailer they go to is providing goods that are for them and that their needs and queries are being looked after in a proper and caring manner. The retailers which will generally provide the more customer care are bound to see the result in their sales and traffic as a result. Retailers need to look critically at the assortment of areas of their store and figure out what is working for them and what is not. Those departments that are losing the attraction of customers need to be remodeled and perhaps even removed from the store. Upgrades with regards to technology need to be made to help make the shopping experience for customers easier and efficient. Internet shopping is also on the fast track and so websites need to be put up that reflect the retailing store or chain. Some input also needs to be surveyed with regards to the needs of customers who are eventually the real deal breakers in the business. Brands are important to a business and are a means of identifying a particular business with just a name or a symbol (Klein). Manufacturers now have all registered trademarks that are used to brand their products that may well be a sign of the quality of a product. A brand, in the current global economy, adds to the value of a product well above the cost of its manufacturing and this additional amount is determined according to the name of a brand. The brands market share, its market share and the members of the community that the brand is focusing on is how the manufacturers add on the extra value of their labor. L’Oreal and Christian Dior cosmetic products are priced well above those of Avon and E.L.F due to the group of society that the manufacturers are appealing and marketing to. From here arises the concept of brand equity. Brand equity is an intangible asset that is usually determined by the consumer (Net MBA).  Robert Passikoff describes brand equity as “the status or strength of the brand and its ability to meet or exceed the expectations consumers use to define the Category Ideal. This identifies how consumers view the category, compare offerings in the category, and, ultimately, buy in the category. Its what they really expect from a brand.” (Passikoff, 2006, p 30). There has been a drastic shift in the manner that retail stores are now behaving. Before in the past when one went to the different grocery stores there were usually branded products on the shelves and manufacturers competed with one another to gain the larger market shares. Manufacturers such as Heinz and Campbell competed in various products for the better quality and better priced items and retailers were providing the physical surroundings where products were sold. Now, retailers such as Marks and Spencer as well as other retailer super giants such as ASDA, Sainsbury’s and Tesco creating their own-branded products. These products are sold at a lesser price than the branded products and are a way for the retailing stores to expand business as they have in banking and insurance. Studies have been carried out where customers have been given own-branded products and manufactured products and most of the respondents preferred the own branded product. This was after they were told that the prices of the three products used in the study were all the same (Davies, 2003, p.82). Even the blind taste tests that were conducted were more in favor of the products that were produced by the brands but this is in contrast with what the study shows to be the buying chart of the consumers. Though the taste was the same of the products and even better in some cases there was a reluctance to buy the own-branded products. A shift in power has taken place over some time and this is probably because now power is manifesting in the retail sector (Burch, 2007,p. 100). This trend is due to a number of reasons such as the food manufacturers being challenged by the retailers who are trying to break through the hold the manufacturers have (Brands that have the power to change the world, 2008). The own brands that supermarkets are putting in their stocks are low priced and offer an alternative to consumers. Customers have something other than the leading brands to choose from and in time they may even gain more and more confidence in the retailers own branded goods. A major factor and perhaps a blow for the manufacturers of branded products is that some don’t have their own outlets or retails and are dependent on other retailers and supermarkets for the sale of their goods. If retailers feel that customers are buying more and more of their own-branded products then they may cease to buy from the manufacturers and stock up on their own goods making it less costly for them. Otherwise supermarkets can ask for large amounts to put the branded goods on the shelves. The relationship that exists between the manufacturers of the food industry and retailers also is of question. In the globalised economy that exists today there are a large number of resources available to retailers who have a highly developed and computerized system of logistics. If food manufacturing brands try and flex their muscles in any way to stop supplying to a retailer or demand their removal of particular items that are similar to their own then retailers can get supplies elsewhere. Perhaps the idea that is most important to the consumers is that the retailers offer them products that are cheaper and offer convenience in certain food products that not many brand are ready to look at as they have gained their brand loyalty by specializing in other areas. An example would be Wal-mart which provides to consumers its own ready to cook pizzas and other items that can easily be made in a number of minutes and is fresh. Plus the low cost does not hurt the amount of sales. Traditional manufacturers are not ready to give up the old products and ignore the growing needs and studies that are conducted showing how consumer preferences are changing. It is common knowledge now that in developed countries there is a rush to build more and more fast food outlets and yet manufacturers ignore this. Retailers have picked up on the fact that working individuals spend time eating in the car and on the go and need the ready to cook meals or those that are easily eaten with the use of one hand. Benefits for retailers in this particular business is that they can produce a number of new products in just a year while the traditional and older brands need and take a lot more time. Harvey et al. are researchers who noted that “Because of the high costs of research and development, traditional manufacturers of branded products may take two years or more to develop… the typical brand orientated company introducing four or fie new products lines every year. In contrast, the new non-branding food and beverage manufacturers producing supermarket own brands… may take only a few months to launch a new product… the supermarket own brand manufacturer will introduce not four or five new product lines every year, but between one and two thousand, designed to meet the expectations of niche markets and the demand for novelty (Harvey et al, 2002, p. 189). Retailers are now evolving their manner of business and moving away from the way that manufacturers do things. Many are diversifying as with the bank opened by Sainsbury’s and the insurance being provided by Tesco. Costco, the wholesale giant in the United States, has introduced its own petrol pumps that coax consumers to stop and buy products from the store thus the diversification that is done helps to support each aspect of the business. Retailers are pushing out their competitors and doing serious harms as they take on the shares that the brand manufacturers would otherwise have. Unilever is a company that may have fallen in front of the retailers as the company saw a decline in their net profits of about thirty-one percent in the year 2004. A problem that retailer do face when they house their own branded goods it that there is a need to advertise the goods if there is to be any sale. In this aspect the retailers lack behind manufacturers who may be willing to and do at times spend a hefty amount for the advertisement of their products. Many brands employ the use of world renowned celebrities and other personnel while on the other hand retailers spend only a small amount, about one percent of their turnover on their advertisement. Not only is this a problem it may become a challenge as consumers lack knowledge and so to sale off the lesser priced goods will be difficult. The own brands that are being introduced rapidly by the retailers are a threat to the food manufacturers and may also be seen as a challenge to them. The brand image that is projected by goods from various companies is also of importance as consumers are becoming savvier and realizing that they may well be paying a higher price for the same product that they can get from their local retailer. Own brands may prove to be a challenge for the retailers themselves as they will need to look into their business and decide how best to expand their business and what would be the best way to go about it and not all projects may succeed. Nestle is the world’s largest food company and is ready to take on the challenge as it is buying out branded manufacturers and rapidly expanding its products in line with customer needs. It is also investing money in innovative products such as diet products and other goods (Buche, 2007, p. 116). Competition between retailers and manufacturer may not take on form but there is certainly a tug of war that can be expected between the two sides (European Retail Round Table). Retailers have more interaction with consumers and have established loyalty amongst many with chains running across countries and even the globe as with IKEA and Nestle. Manufacturers need to become more innovative and step out of the lines of tradition and perhaps explore areas that are not too looked at and make attempts to make new products. The brand loyalty they have gained over the years will likely support their cause. While this goes one, customers may well become more inclined towards own brand product as a tough economy is not helping the situation and brand loyalty is high (Kapferer, 1997, p. 167). Work Cited: Ailawadi, K. L. (2004, September). UNDERSTANDING RETAIL BRANDING: CONCEPTUAL INSIGHTS AND RESEARCH PRIORITIES . (1). Dartmouth College , Hanover. Available from: . Accessed: 11 January 2011. Andrews, A. Celebrity endorsements pay off as supermarkets lift ad spending. (2007). The Times, 24 December BRANDS THAT HAVE THE POWER TO CHANGE THE RETAIL WORLD [online]. (2008) [Accessed 11 January 2011]. Available from: . Burch, D and G. Lawrence (2007). Supermarkets Own Brand, New Food and Reconfiguration of Agri-Foods Supply Chain. In: D. Burch, (ed). Supermarkets and agri-food supply chains: transformations in the production and consumption of foods, Glos: Edward Elgar Publishing, pp100-130. Davies, G. (2003). Corporate reputation and competitiveness. 1st. ed. New York: Routledge. 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