A recent Linked In discussion referred to a study predicting that Australian Supermarkets will retail 33% of private label brands.
The article suggests that supermarkets have made 33% generics a reality when, in fact, its been manufacturers that have created this environment!
Short-term profit gouging, and/or criminally negligent marketing management, and simply ignorant brand stewardship have given supermarkets a red-carpet invitation to secure consumer loyalty and win market share.
Rudimentary ‘Marketing 101’ says consumers make buying decisions based upon value. Knowing how different segments measure or assess ‘value’ is the implication and marketing science the means.
Manufacturers would be impervious to house brands, the retail word would be devoid of true house brands, IF branded products manufactures employed comprehensive strategic marketing science.
However, house brands exist because manufacturers have chosen NOT to understand and cater better for their market segments than their retailers.
Now that Coles and WW have loyalty card data… fast, immediate, and statistically reliable, they understand their segments better than the non brand-savvy marketers that supply them.
Unless huge changes to strategic marketing take place, and manufacturers don’t make quantum changes to their strategic marketing, 33% is the tip of the iceberg, and categories will ultimately have no independent brands at all… retailers will have 100%.