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A Walk Down the Grocery Aisle - Essay Example

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Both competitors must revise their game plans in an economic downturn, when consumers are more apt to substitute their familiar national brands for cheaper store brands. To take…
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A Walk Down the Grocery Aisle
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here 14 October Understand the Demand for Store Brands Overview: Taking Advantage of Those with Less Money The battle between national brands and store brands in the grocery business changes with the economy. Both competitors must revise their game plans in an economic downturn, when consumers are more apt to substitute their familiar national brands for cheaper store brands. To take advantage of this trend, retailers strive to give customers more choices, invest more in product innovation, promote their own brands better and try to localize their products. And when the economy thrives, national brands gain the advantage as customers put their focus on quality and trust, rather than price. As national brands are typically considered to be cutting-edge and associated with higher quality, they must emphasize that they are irreplaceable, that they are a better value despite their higher price, and get on board with Internet marketing to earn repeated business and ensure product availability. When retailers co-brand with national brands, both tend to profit. To stay competitive and ensure profits, both sides must focus on the unique advantages that only their products can provide consumers, whether it is quality, price, locality, availability, value, or variety.
Issues to Overcome
New difficulties and opportunities show their face in the grocery business during changing times. A tough economy poses great challenges for national brands, which see consumers often sacrificing quality as they purchase lower-cost store brand alternatives. This added challenge for national brands opens up greater opportunities for retailers, which can better cater to the financial struggles of customers with their cheaper store brands. However, when an upturn in the economy hits, store brands must prepare for consumers returning to the familiar national brands, as they can afford the more expensive national brands. But because store brands have been perceived as having higher and higher quality, national brand companies cannot always count on customers returning to their products, as they might not see the dividends in paying a lot more for a national product that is not that much different than the retailer’s cheaper substitute. A shifting economy can pose problems for both store brands and national brands, bringing to the forefront issues with pricing, quality, and value.
Turning It around
There are many things that both store brands and national brands can do to overcome challenges brought about by changing economic times so that they can ensure success. Changing up their game plans and crafting effective marketing approaches can make both sides winners. With the rising consumer tide shifting toward store brands, there are a number of things retailers can do to spur customers to purchase their own brands, (Sison 2011).
Increase product offerings to cover each category of products
Localize products
Create new cutting-edge products
Store brands can employ these action steps to compete effectively with popular national brands. On the other hand, national brands must take a different route in order to stay on top of their game and keep customers from switching to cheaper alternatives.
Focus on product characteristics that cannot be replicated and are irreplaceable
Do a better job emphasizing to consumers how their products are superior in performance
Keep promotion strategy away from focusing on price
Concentrate on providing purchasers with a personalized experience
Create attractive product attributes that will motivate consumers to buy
Offer products online to assure product availability and generate repeated business
By following these half-dozen directives, national brands can improve the way consumers view their products so that price is no longer the motivating factor. If both store brands and national brands employ the aforementioned techniques prescribed for them, their sales are likely to improve.
Reflecting at the Checkout
Comprehending the dynamics behind marketing store brands and national brands helps one to appreciate all the decisions that go into stocking the shelves at the local grocery store. It helped me grasp a better understanding of why the Great Value store brand products at Walmart are out of stock more often than national brands, and why store brand items are closing the gap in price with their national brand rivals. As more and more people purchase store brands, retailers wisely invest to innovate their products and diversify their portfolio of brands so that they can compete with national brands at every level. This article helped me see that companies need to change with the times in order to stay afloat in the tumultuous sea of our economy. If they fail to constantly strive to improve their products and offerings, the competition will quickly pass them by, whether it is through utilizing technology via mobile devices and the Internet, developing more environmentally friendly packaging, improving the product by lowering calories or sugar, or focusing on product uniqueness. Once these concepts and other factors driving purchasing trends are understood, companies become better equipped to provide the best product and value for their customers.

Works Cited
Sison, Ricardo. “A Walk down the Grocery Aisle.” Sanfrango. September 27, 2011.
Web. 9 October 2012.

A Walk down the Grocery Aisle
Executive survey results exploring private label and national brands
http://sanfrango.com/article/2011/september/a_walk_down_the_grocery_aisle.html Share this page:
Executive Summary by Ricardo Sison
September 27, 2011
Article Takeaways
Changes in consumer shopping habits, in perceptions of product brands, and in the U.S. economy have created an ongoing challenge for national brands. While the recent recession has had a negative impact on spending in general, it has also encouraged the trials of less expensive store brands that consumers perceive as being higher in quality than ever before. The highly debated question is whether consumers will remain frugal as the economy improves, or will they switch to the more expensive, yet reliable national brands.
Consumer loyalty to a particular company can be influenced by resentment over discontinuance of their favorite branded products, the overwhelming number of product choices, perception of product performance, and environmental friendliness. Consequently, retailers are promoting their own store brands more effectively and investing more on product innovation. It should come as no surprise that these same retailers believe national brands should create locally sourced versions of their current products; this could be a good compromise, and would benefit the consumer as well.
Although consumer product and retail executives see a confluence of trends related to consumer attitudes toward store brands, it is the retailers who are most bullish about the future increase of store brands. Perhaps this is because they have given national brands competition by creating a tiered portfolio of store brands in each product category, by localization of products, and by innovative new offerings. As a result, retailers should expect a renewed focus from many national brands in outperforming them as they address these issues through public relations. This will require a delicate balancing act: over-promotion has the potential to damage brand credibility; lack of promotion could remove it from consideration entirely.
For national brands to retain their edge in the marketplace, they need to better communicate their value to consumers by accenting product performance and developing positive qualities that will influence purchasing behavior. They should also garner consumer fidelity by putting an emphasis on traits that are hardest to reproduce and make certain their products are irreplaceable. When forming an advertising strategy, consumer product companies would be smart to consider one that is not price-related. Moreover, they would benefit by focusing on a more personalized customer experience, never ruling out the possibility of local variants of traditional products. And by directing consumers to an online option, a national brand can take advantage of the internet for repeated purchases and always-in-stock service, leaving retail companies in brick-and-mortar limbo. Read More
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