Can Private Brands Compete With National Brands?

on November 7 | in Sales & Marketing | by | with No Comments

It is the question, often posed by my clients who are looking to start their own business and have a slice of the large profit pie that the FMCG industry promises to serve.

My answer to them is – Why not?!

I can understand where they are coming from—a Heinz ketchup bottle vs. My-home-made-sauce labelled bottle—one has years of reputation behind it, while one doesn’t. As such, thinking from a customer’s perspective, the choice is evidently clear.

But that’s where you are getting it wrong—you are assuming how a customer would act when presented with the choice. And, one of the most important rules in business is: Don’t assume, especially what your customer feels or wants.

Classic Cola – How It Gave National Brands a Run For Their Money

To support my point, here is an example.

Classic Cola is a private label brand made by Cott Corporation for J.Sainsbury supermarkets—the second largest chain of supermarkets in the United Kingdom. When it got launched in 1994, some heavy-hitters, like Coca-Cola and Pepsi, already dominated the U.K. cola market.

Within the next two years of its launch, Classic Cola accounted for 65% of total cola sales at Sainsbury, with a market share of 15%.

If Classic Cola successfully competed against the likes of Coca-Cola and Pepsi, why can’t your private label establish itself in the market?

And believe me when I say this, for someone who has a vast experience serving in the FMCG sector, this could be an ideal time for you to enter the market.

How so?

Because customers are feeling more and more detached with the big national brands.

National Brands Are Failing to Emotionally Connect With Customers

According to a recent research from CustomerThermometer, brands that emotionally connect with consumers, are more likely to have them as their customers. And that is where national brands are falling behind, as this survey from IBM and Econsultancy reveals.

For private brands, this presents as an ideal opportunity to tap the unhappy customers and establish their niche in the market.

This begs the question:

What private brands can do to successfully compete against national brands?

Private Brands vs. National Brands: What Should Private Label Brands Focus On?

Here are few pointers to keep under consideration when creating your business strategy:

  • Your private brand label should be price competing.
  • Your marketing campaigns should be designed as such so that your brand emotionally connect with your customers.
  • A strong focus and promotion of community values, for instance, environmental friendly manufacturing approach.
  • Value your customer’s loyalty.

So, go out there and compete, for all consumers want—is to be served!

Want to know more about how private brands and national brands are changing the face of the FMCG industry? My blog resources can help you. If you are interested in developing a good business strategy for your company, get in touch with me at manaljh@hotmail.com.

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