11 New Strategic Brand Management by Philip Kotler 4th Edition
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Bonne Maman jam, it is difficult to offer high- definition plasma screens at low prices. There are simply no suppliers in the high-tech market to deliver such products. This is why at the end of 2005 Carrefour decided to put an end to First Line, and retained only its lowest- price brand, BlueSky. It is impossible to talk about brands without touching on the question of innovation. In fact, the function of the national brand, the big brand, is to supply progress through inno- vation, change, fashion, design and so on. This requires marketing expertise \u2013 long-term thinking on the expressed, or latent and unconscious, expectations of future clients. They also have the expertise of the major industrialists. Thus in 2006, Fleury Michon, in accordance with its brand charter, launched hams without preservatives, since these are the future, even if today\u2019s customer is not aware of it. To be a brand is to be a leader, to look far into the client\u2019s future. Eliminating the chemical preservatives implies replacing them with natural preservatives: it took three years of R&D to find bouillons to carry out the same preservative function. Some years previ- ously, during the mad cow crisis, Fleury Michon was able to innovate in offering ham steaks. It is also the brand of turkey ham, and other unusual products. Does the distributor\u2019s brand also innovate? No, since it does not have the means to do so. Its business model assumes light marketing \u2013 in order to reduce the costs linked to the dozens of product heads \u2013and the fact that it follows quickly in the wake of what is already working, that is the innova- tions of the successful manufacturers, by copying them to within a few details. In fact, the product specifications of subcontractors tasked with manufacturing a distributor\u2019s brand product are up to 80 per cent defined by the characteristics of the successful product to be imitated. If Henkel invents tablets to replace washing powder, the DOB must then manufacture identical tablets. According to the stores, the remaining 20 per cent of the specifications will be a way of providing differentiation linked to the store\u2019s own values. However, in order to be able to appear quickly on the shelves with an iden- tical offer at a 30 per cent lower price, it is necessary to economise on marketing and R&D: the distributor\u2019s brand business model is that of copying, of imitation taken to the maximum. A common riposte is that distributors\u2019 brands were the first to introduce such and such an innovation in terms of packaging: for example, turning shampoo bottles upside down, in accordance with their actual position in the bathroom. However, the distri- bution brand, by the very construction of its economic model, does not seek to innovate: its price is obtained through turning the efforts and investments of the manufacturer\u2019s brand to its advantage, profiting from its strong position in the relationship, which means that the manufacturer needs the store far more than the store needs the manufac- turer. Upon the launch of new food, hygiene and maintenance products, the mass distri- bution stores today request immediate access to the same innovation for their own brand. The examples most often given to prove that distributor\u2019s brands can innovate are Reflets de France and Escapades Gourmandes (Gourmet Escapades). We know that this revo- lutionary concept consists of revitalising the production of 100 regional recipes, having them produced by SMEs in these regions, and bringing them together under the same brand, sold in all the Carrefour Group\u2019s stores. From this point of view, Reflets de France is a true brand: an innovative concept, a target, a price positioning maintained for all products, a strong graphic identity, a high level of taste quality and an imaginary quality (nostalgia). FROM PR IVATE LABELS TO STORE BRANDS 71 This example shows that, when the distributor behaves like a true brand, it opts for own brands, or becomes the store of the brand and not the brand of the store. For example, Gap, which was the exclusive seller of Levi\u2019s, began to introduce its DOB, and progressively ceased to sell anything but its own store brand products. However, it was then necessary to clearly define a brand concept, the store becoming the place where the brand was expressed and experienced. Gap defined the concept as anti-fashion. Decathlon does the same. It is symptomatic that in order to accentuate its status as a designer/manufacturer with its own stores, Decathlon gave up its store brand (there are no longer any Decathlon products) in order to organise everything under what it called \u2018passion\u2019 brands: that is, a portfolio of private labels. We present below this interesting case of a distributor becoming a designer. Consumer relationships with distributors\u2019 brands Let us now look at the question (are distributor\u2019s brands truly brands?) from the angle of the consumers themselves. For consumers in mature countries, distributors\u2019 brands are perceived as genuine brands, with their attributes of awareness and image always combined with an attractive price. When asked the classic awareness question (\u2018What are the yoghurt or bicycle brands that you know, even if only by name?\u2019), consumers name Asda or Decathlon. When asked if they intend to buy them (general client opinion) or buy them again (behavioural loyalty), the scores are just as high. It is no accident that on the majority of mass-consumption shelves, lowest-price products and distributors\u2019 brands hold the dominant market share. Over time, some distributors\u2019 brands are able to achieve the typical brand effect, as shown by Table 4.1, which looks at the United Kingdom, for many years a leader in this field. According to the Brandz study, the consumer\u2019s proximity to the brand moves from a feeling of presence (awareness, recognition) to a feeling of rele- vance (it\u2019s for me) to the perception of performance and a clear advantage, and ulti- mately to a genuine affective attachment. It is interesting to note that two distributors\u2019 brands have made it into the top 10 of English brands studied by Brandz: Marks & Spencer and Boots. We might say, of course, that there is an affective transfer from the store to its products, a halo effect. Boots and Marks & Spencer are highly respected and historic stores in the United Kingdom, having created a relationship of reciprocal trust and esteem with their clientele over time. However, this halo effect is precisely the lever on which the distributor\u2019s brand is counting. Research carried out by one of our HEC doctoral students on the sources of engagement with the brand, depending on whether it is a producer\u2019s or a distributor\u2019s brand, throws brand-new and unprecedented light on the matter. C Terrasse (Terrasse and Kapferer, 2006) worked on four product cate- gories, in order to compare engagement with the Carrefour brand with that for the big brand in the same category. Engagement with the brand means more than repeat purchase. Panel data has long shown that distributor products obtain repeat purchase rates (behav- ioural loyalty) as high as those of the big brands, or even higher. The same is true for engagement: the declared levels of engagement are high in both cases, for both DOBs and national brands. Table 4.1 Brand attachment: the 10 winning brands 1. Gillette 57 7. Nescafé 39 2. BT 56 8. Heinz 39 3. Pampers 53 9. Kellogg\u2019s 39 4. Marks & Spencer 42 10. Boots 37 5. McDonald\u2019s 42 11. Colgate 32 6. BBC 40 12. Royal Mail 32 Source: Brandz (UK). 72 WHY IS BRANDING SO STRATEGIC? Engagement \u2013 personal involvement with the brand \u2013 measures a strong relationship with the brand, meaning that if the brand were not there, the client would prefer to wait than buy an alternative. For the consumer, there is no substitutability.