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Private Versus National Brands…

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What are the key private brand purchase triggers?

  1. A significant price discrepancy on the shelf strongly influences consumers to choose and test private brands.
  2. Consumers tend to base their purchasing decisions mainly on rational considerations, with price serving as the key factor. In general, they weigh potential cost savings against their quality expectations, often emphasizing economic advantages.
  3. A key reason for switching is when a consumer's preferred national brand is unavailable. In such cases, store brands often serve as quick alternatives, leading to unplanned trials and possible long-term purchase changes in behavior.
  4. A major obstacle to trying store brands is the fear of inferior quality, taste, or performance. Consumers worry it might not match the quality, taste, or effectiveness of the brand-name product.
  5. Confidence in trying store brands increases when financial risk is low and trust in the retailer is high. Lower prices reduce the impact of a negative experience, and positive past interactions with brands like Kirkland or Great Value encourage consumers to explore new categories.

What are the long-term effects of a successful private brand?

  • When a store brand meets or exceeds expectations, it acts as a 'gateway' experience, changing perceptions of value and increasing willingness to try store brands across categories.
  • This challenges the idea that national brands are inherently superior.

When quality is comparable, is the national brand's value proposition undermined?

Many consumers are surprised to find that store brands match or surpass national brands in quality. This challenges the higher prices of brand-name products and often results in a lasting change in perception.

Where can national brands still win, and how can they win back customers?

Brand loyalty is strong for products ingested or applied to the body, as consumers hesitate to switch to store brands, fearing potential adverse effects. Brands with unique or iconic flavors have an advantage, as consumers refuse to compromise on products linked to a specific taste.

To win back a converted customer, do national brands have to compete directly on price?

For consumers who mainly purchase private brands, the primary factor in returning to national brands is price. They indicate that a brand-name product would only motivate them to switch if it were on sale, offered a coupon, or priced at or below the store-brand equivalent.

As a retailer, does your private brand strategy align with these customer comments?

As a manufacturer, are your products upholding their brand promise?