2.262009

we’re the same, but different

Martin Bishop, author of the blog Brand Mix, recently posted about some new research on brand loyalty.  An implication from the research findings is that you can steal brand loyalists from the competition by focusing on the similarities between your product and theirs; and if you want to keep your fans loyal, you should focus on how you are different.  (Thanks to Tom Fishburne for the cartoon!)

As you will note in my comments to Martin, his post reminded me of something I was taught a long time ago about brand positioning (I can’t remember where I heard this, so if you know the source, I’d love to be reminded.)  It went something like this:

  • the first step in positioning a new brand is to explain how you’re the same as existing choices;
  • then the second step is to explain how you’re different.

If I recall correctly, the thinking behind this instruction was that your first goal is simply to get people to consider your new brand.  By explaining how you are the same as existing choices, de facto you’re saying you belong in the same consideration set.

Then once you’ve gotten in that set, your goal becomes getting people to purchase your new brand.  By explaining how you are different/better than existing choices, you make a case for why someone should buy your brand.

This seems particularly relevant to the war between private label and package-goods brands that is currently being waged at stores around the world today.

With the recession providing a strong tailwind, newer private label brands have been entering the market quite successfully.  Private-label market shares grew 0.8 percentage points to 21.9% of volume and 0.7 points to 17.1% of dollars in all package-goods categories and retail channels last year including Walmart, according to Information Resources Inc. And they’re gaining more momentum — private-label grew only 0.1 point in the first quarter of 2008 but 1.3 points in the fourth quarter among households earning more than $100,000 annually.

Most private label brands have achieved this level of penetration with the first step of positioning — they’ve put themselves in the consideration set by explaining how similar they are to existing branded goods (I ran a brief post about this last fall).  Meanwhile, established branded goods have been doing the second step of postioning for quite awhile — their marketing is focused on the product attributes, feature sets, or even in some cases the emotional resonance which makes them different (and presumably worth paying more for than private label goods.)

But now we’re seeing some private label brands with such strong positions in the consideration set, they’ve moved on to the second step of positioning and are focused on promoting their differentiation.  Examples:  Trader Joe’s house brand is the facilitator of discovering (or at least easily sourcing) interesting tastes and new foods/ingredients; messaging for Target’s Choxie chocolate brand says it’s, “Chocolate with Moxie.”

Branded goods have started to fight back (I wrote another post about packaging efforts to do so.)  But now that “value” has become the prevailing mindset for most shoppers, branded goods may find themselves in a quandary.  Their positioning efforts to differentiate may actually become a hindrance if consumers automatically associate those differences with higher prices — or simply decide those differences are not that important.

It almost seems the established brands may need to go back to the first positioning step and explain why they belong in the “value” consideration set with the private labels.  This may unfortunately lead some brands to adopt a price-based approach, but hopefully others can figure out how to make a more compelling value argument.  What do you think?  I’d love to hear more thoughts on this.

P.S.  In a sidebar in Ad Age’s piece about private labels this week, it’s reported that some barnded goods are finding ways to ways to work with — rather than against — private-label products, with store displays that showcase their offerings side by side.  Kudos to General Mills and Kraft!

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