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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It becomes a genuine
instrument of strategic differentiation,
expressing the identity, values and posi-
tioning of the store itself. It should generate
loyalty not just to itself (through its effect on
the share of requirements), but also \u2013 more
challengingly \u2013 to the store.
During this stage, the brand\u2019s power and
management is no longer in the hands of the
purchaser alone. The purchaser strives for an
optimal mix of purchase and resale condi-
tions. Making the brand into an instrument
for shaping identity and positioning presup-
poses genuine marketing strategy, and also
the construction of a range that reflects the
brand\u2019s ability to communicate the
distributor\u2019s own values and identity. Here,
the trick is to effect the shift from purchase
driven by confusion to one driven by pref-
In this situation, the distributor\u2019s brand
holds key positioning importance, since its
content and products express the values of the
(distributor\u2019s) store. To this end, it offers one
or more components of added value, based on
the ingredients, packaging, traceability,
concept and so on.
This is generally the point at which brands
appear for which the main sales argument is
no longer price, but the concept itself. It is
true that often they have no equivalent
among the branded producers, for a simple
reason: these are specialised by category,
product or trade. For example, what producer
could construct an umbrella brand around the
concept of \u2018Pleasures of yesterday\u2019, bringing
together more than a hundred of the best
products from every region of the country,
along with rediscovered recipes and method
of manufacture? Nestlé would be incapable of
doing this, as it does not produce oils, jams,
biscuits and the like. The same is true of
Unilever, Philip Morris and Danone.
Carrefour, however, can: all it needs to do is
promote the concept among small regional
companies in each country where it operates.
The case of Decathlon
Few stores reveal as much about modern
distribution as Decathlon and the key role
that its own brands play in its growth. In a
recent article, Anglo-Saxon academic research
notes that the share of shelf space given 
over to distributor\u2019s brands among US distrib-
utors is less than among European distributors
(Corstjens et al, 2006). The US distributors
Table 4.3 How copycat resemblance influences consumers\u2019 perceptions
They are made by the same
manufacturer (%) I trust the private label (%)
Rank of packaging resemblance Definitely Probably Total Yes
1 Panzani/Padori (pastas) 39 41 80 78
2 Martini/Fortini (spirits) 30 31 61 56
3 Amora/Mama (ketchup) 21 46 67 62
4 Ricore/Incore (coffee) 16 17 33 38
Source: Kapferer (1995a)
allocate shelf space according to a simple
short-term profit equation. It is true that in
the United States distributors\u2019 brands have a
poor reputation, and are all considered \u2018sub-
brands\u2019. They do not allow for positioning of
the store or the loyalty generation through
attachment to the store. The situation is
different in Europe and Canada, where, very
early in their brand history, distributor\u2019s
brands had a combative vocation: fighting
not to launch a price war, but to offer the
consumer genuine value. Just think of Migros,
the dominant chain in Switzerland, which
does not sell products by Nestlé, the world\u2019s
leading food company with its headquarters
in Switzerland, but rather Migros products. In
this case, the long-term strategic dimension
takes precedence in decisions on shelf space
allocation: this is the best way to get
consumers to try the product, and therefore to
begin a cycle of loyalty generation.
In our view, the main difference between
the approaches of the distributors themselves
in the United States and in Europe is that, in
the United States, it is a question of selling the
store\u2019s brand alongside the big brands,
whereas in Europe it is a question of making it
the store of the brand, with a few other brands
alongside it. Decathlon has now become a
designer of brands that controls its own distri-
bution. This is what differentiates it from the
sports section of Wal-Mart or Sports
Unlimited. Even its lowest-price products are
labelled as \u2018best-price technical\u2019 products, to
remind us that the ethics of sport forbid sacri-
ficing everything for money: there is a
threshold below which a football is no longer
a genuine football in terms of quality and
security. Others might sell it anyway, in order
to maintain the image of always having the
lowest price, but not Decathlon.
This process, which transformed the store
into a brand, may also be illustrated by Gap.
The Decathlon ideal is the same as Gap\u2019s \u2013 to
reduce its main manufacturer brand (in this
case, Nike) to 10 per cent of sales in the
running department. This is already the case
in the camping department: all the rucksacks,
sleeping bags, and tents are private label
products. In order to succeed, Decathlon
needs to do much more than buy and sell: it
needs to innovate, design, establish its own
production plans, and choose its own
partners. This is why Decathlon is now the
world\u2019s fifth largest producer of sports goods.
Its business model is the integration of
Decathlon began life 30 years ago as a
simple discount store. It sold all branded
products, and only branded products, in all
sports. Today, more than 55 per cent of its
turnover is made on store brands, although,
in accordance with its company culture,
Decathlon never speaks of store brands, only
of passion brands. The word \u2018passion\u2019 here is
not a slogan, but a true understanding of the
brand in sport. The sports brand is built first
internally; it is a true culture. Then it is
carried outward by those who are passionate
about it.
Moreover, few stores take their own brands
as seriously as Decathlon does. Decathlon
shows how the organisation must be able to
adapt to the brand, rather than the reverse.
Finally, Decathlon enacts its brand policy
worldwide, which is all the more challenging
since Decathlon dominates its original
market, France, by some distance, but is only
just making its debut in China, where its
products are produced, and has pulled out of
the United States. It has 340 stores.
Decathlon\u2019s vocation is to give as many
people as possible access to the pleasure of
sport. The key values are vitality, truth,
fraternity and responsibility. It is a low-cost
operator, but one that has always favoured
product quality over selling at the lowest
possible price. Loyalty is not generated
through prices, but through client satis-
faction. At the same time, it is the best way of
defending the chain against the entry of
discounters from the food sector, such as Wal-
Mart Sport. This policy is a success: in the
bicycle sector, for example, not only is
Decathlon the brand that first comes to mind
for French consumers, but in addition it is also
the one that is necessarily taken into account
when making the next purchase, with a
consideration score double that of the first
producer\u2019s brand (Raleigh or Peugeot Cycles).
The store was founded in 1976 by Michel
Leclerq. It quickly took the distributor\u2019s brand
option, capitalising on the strong name
awareness of the Decathlon company, and its
dominant distribution. Decathlon seeks the
development of the largest possible number of
its clients through sport. The store is posi-
tioned on the hedonistic side of sport, and
designs very comfortable products, aimed at
wellbeing, with emphasis on safety. It is a
diffuser of pleasure.
The components of its success in France
were like those of any store: the quality of its
store sites, the range (that is, the choice of
goods for 60 sports under the same roof),
unprecedented low prices, remarkable
computerised logistics that avoid stock