11 New Strategic Brand Management by Philip Kotler   4th Edition
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11 New Strategic Brand Management by Philip Kotler 4th Edition


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What is the optimum distributor\u2019s brand for a
store? What fraction of sales, of the aisle, and
of the shelf should it represent? The answer
depends largely on the store\u2019s strategy \u2013 itself a
function of the competitive situation and the
margin provided by the producers of branded
articles, in comparison with that offered by
the distributor\u2019s brand.
Take Decathlon, for example. This store
began, like many others, as a simple
distributor of brands. Over time, the store\u2019s
mission (to allow access to the pleasure of
sport for the maximum number of people)
proved easier to carry out through a greater
control over product design and production
planning, even purchasing the raw materials,
although production is still subcontracted.
Little by little, the Decathlon brand took
control of aisles where brands were weak.
However, it is forced to cohabit with well-
known brands in sections such as running,
tennis, skiing, and golf. Having become aware
that a single, uniform brand harmed the desir-
ability of the store itself and therefore the
number of visitors, Decathlon abandoned its
single brand in 1998 and exchanged it for a
portfolio of passion brands. Today these
brands represent more than 50 per cent of
turnover. The store\u2019s deep desire is to become
a major producer of sports brands, and
therefore to always push its specialised brands
through sport. Decathlon still needs major
brands in certain sections, but less so in
others. If its brands become genuine brands, it
will have reached its objectives, following the
example of Gap, which passed from the status
of a simple store to that of a store brand and
finally to that of a pure brand with its own
stores. This change was itself the consequence
of an evaluation of the future profitability of
the textile market for a brand distributor, at
the moment of the opening of discount textile
stores in the United States.
The part devolved to DOBs is therefore not
the result of an optimisation, but the fruit of a
voluntary strategy. Research has nevertheless
analysed the impact of the increase in the
DOBs\u2019 share of the offer on the frequency
(measured as the average number of purchases
per week in relation to the number of refer-
ences offered) (Ilec, April 2006). For a small
supermarket, the frequentation index is
continually decreasing: it is 140 when the
DOB offer is situated between 8 and 18 per
cent of the overall offer, and 79 per cent when
it reaches the segment between 47 per cent
and 57 per cent of the offer. For a large super-
market, the same is true. For a small hyper-
market (under 6,000 square metres), the
frequentation index also falls as the share of
DOBs increases, but over 20 per cent of DOBs,
the frequentation index rises once more: it
increases from 87 per cent to 99 per cent for a
DOB offer rate of 22 to 29 per cent. For large
hypermarkets, the frequentation index rises
with the DOB range! The best frequentation
(index 125) is found with an average DOB rate
of 19 per cent, then the frequentation index
falls again for any increment in the presence
of DOBs.
The three stages of the
distributor\u2019s brand
Once the decision has been taken, there are
three stages in the business growth of distrib-
utors\u2019 brands: oblative, imitative and identity.
The first stage is known as reactive or
oblative: historically, it results from the refusal
of sale by the major industrialists. This is how
many own-brand products are born. However,
FROM PR IVATE LABELS TO STORE BRANDS 77
it is also strengthened through identifying
gaps in the ranges of the major producers. A
category management approach quickly iden-
tifies those segments where something should
be offered to the client, but where the major
brands have nothing to offer, since it is not
their strategy. These gaps need to be filled.
The second stage is imitative: here, the
distributor examines its competitors\u2019
distributor\u2019s brand ranges, and sets about
imitating them, producing the same products
typically supplied by its other competition. By
means of this emulative method, the
distributor\u2019s brand core offer is constructed,
created from all the references common to all
the distributors\u2019 brands. We should add that
this is also typically a phase during which the
distributor, for lack of investment in its own
distributor\u2019s brand identity, chooses to
imitate, trait for trait, the packaging of the
brand products that it is targeting (generally
the category leader). The objective of this
copycat approach is clear: a deliberate intent
to take market share from the big brands by
allocating more space to one\u2019s own
distributor\u2019s brand, a similar copy, and to
increase the average price of the big brands in
order to attract clients to the distributor\u2019s
brand (Pauwels and Srinivasan, 2002).
This imitative or \u2018copycat\u2019 approach borders
on trademark infringement, and sometimes
gives rise to court cases by the outraged and
wronged producers, complaining of either an
infringement of their brand rights, or unfair
competition (see page 270), or economic para-
sitism. A visit to the aisles of mass distribution
is enough to note the striking similarity
between the copy and the brand packaging. In
most cases, however, disputes \u2013 arising from
the overzealousness of the designers \u2013 are
resolved amicably. Furthermore, the
distributor takes refuge in the fact that the
issue is not brand codes, but rather category
codes. The real aim of this approach (the
imitation of the essential attributes of
branded product packaging), which domi-
nates mass distribution, is to cause confusion,
profiting from the average attention span of
the shopper in the aisle. Through lack of
attention, the consumer may take the
distributor\u2019s brand instead of the major brand
product.
The InVivo company has actually calcu-
lated that, for mass consumption products, in
hypermarkets, consumers spend 7 seconds on
each purchase: speed matters to them. When
there is intentionally strong resemblance
between the packaging, a hurried buyer with
an average attention span can be confused.
Our research into the imitation of brand
packaging (trade dress) by distributor\u2019s brands
(Kapferer, 1997; Kapferer and Thoenig, 1992)
has shown that the unconscious recognition
factors in the aisle were, in decreasing order of
importance:
1. Colour.
2. Packaging shape.
3. Key designs.
4. Name, typography and so on.
This is exactly what distributors\u2019 brand
products copy: Ricoré\u2019s packaging is yellow,
and so Calicoré\u2019s. There is an image of a small
Mexican on Pepito, the leader in biscuits for
children. There is a very similar character on
Rik and Rok, Auchan\u2019s children\u2019s brand, and so
on.
As our results (shown in Table 4.3) demon-
strate, where the private label copy/original
product pairs are placed in decreasing order of
resemblance, the stronger the perceived
resemblance in trade dress, the more the
consumer infers that the producer of the two
products is one and the same \u2013 and the more
confidence the copy inspires.
Another study has shown that the discovery
of a quality distributor\u2019s brand created a less
positive attitude towards to the leading brand.
J Zaichowsky and R Simpson (1996)
conducted consumer trials with Lora Cola, a
distributor\u2019s brand imitating the appearance
of Coca-Cola cans. The taste of the product
78 WHY IS BRANDING SO STRATEGIC?
was manipulated in such a way that one
section of consumers would find it very good,
while others would find it bad. Among the
latter group, the Coca-Cola evaluation,
measured twice (before and after trying Lora
Cola) did not change (5.41 versus 5.71).
However, it did fall significantly in the case
where the consumers liked the taste of the
copy (falling from 5.67 to 5.22, or a drop of
\u20130.45).
The third stage is the identity stage: the
distributor\u2019s brand is used to capture market
share from competitors.