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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in
relation to the big brands, and finally deliver a
\u2018plus\u2019 compared with low-cost products. It is
therefore more like a quality label attached to
a price. To increase its financial results, it is
certainly possible to increase its share of the
shelf and have the goods appear in great
FROM PR IVATE LABELS TO STORE BRANDS 85
Table 4.5 Percentage of consumers who intend to buy the distributor\u2019s product
Brand and packaging type Price gap from segment leader
\u201320% \u201335% \u201350%
Store brand (not copycat) 38 38 28
Store brand (copycat) 17 28 38
Private label (copycat) 26 31 27
Private label (not copycat) 21 24 31
numbers, which can give the impression of a
Soviet store. It is better, however, to increase
the client\u2019s preference for it. How?
Table 4.5 indicates how a better purchasing
and promotion policy can contribute to this.
Above all, however, it is necessary to sell it
through greater brand strength. Since the
distributor\u2019s brand carries the store name,
value must therefore be created through the
store itself, its positioning and its identity. Too
many stores are devoid of meaning: they are
businesses and nothing more. The hyper-
market, like a cathedral, must decide which
god it serves: the generic god of the consumer
society, or an intimate desire on the part of
the distributor to modify its relationship with
its clients? For example, Carrefour venerates
rationalism: its entire crusade is aimed at the
enlightenment of the audience.
Remember that a big brand is built through
the intangible: it is embodied in the tangible,
and forms the basis of a durable relationship,
a community of values among its clients. The
first task that the store should set itself during
this work is to identify its project, its vision:
what in its customers\u2019 lives does it want to
change? Although it will be necessary to
compete on price, on choice and on service, it
will also require an internal energy: this is
found through the vision and the battle that
the store takes as its own. What is the battle
for most stores? When an organisation does
not have critical mass, it is necessary to
compensate through goodwill, and therefore
through the power of the brand.
Once this has been defined, it must be
implemented through 360 degrees, and not
only through the distributor\u2019s brand products.
For example, what service innovations will
embody it in stores, and also beyond? It is
these that will spark off word of mouth, turn
customers into ambassadors and carry the
brand\u2019s point of view.
In comparison to the weight and inertia of
the multinationals, which can only innovate
once they have confirmed that the inno-
vation will be profitable because it can be
implemented worldwide, distributors must
innovate more reactively. Of course techno-
logical innovation is beyond them. But
customers do not expect it of them: on the
contrary, it is their job to render customers\u2019
lives more pleasant, even more liveable. This
is achieved through recognising that the
customer segments are fragmented and that it
is therefore necessary to adapt the distribution
brand to this variety. Second, the distributors
must be ahead of the curve on trends: it is up
to them to lead in terms of ecology, organic
produce, fair trade and so on. These are all
profound movements that destabilise the
status quo. The risk is much less for distrib-
utors: the distributor\u2019s brand should be
segmented to fill these niches. This is how a
close affective relationship is forged: client by
client.
The brand-store must go further, into
personal service. Remember the remarkable
phrase of Howard Schultze, the founder of
Starbucks. Asked about the success of
Starbucks, which will soon have more outlets
worldwide than McDonald\u2019s, he replied: \u2018We
are not in the business of coffee serving
people, but of people serving coffee.\u2019
Starbucks does not sell coffee to people \u2013 it is
at their service, and serves them coffee, of
good quality, in recyclable cups, using fair-
trade coffee beans, in a peaceful, calm envi-
ronment and with genuinely happy staff. It is
easy to understand why Starbucks had no
need to advertise: its customers took care of
that. It is time to stop talking about \u2018distrib-
utors\u2019; the ambition now should be to place
\u2018life centres\u2019 at the customers\u2019 disposal, facili-
tating and stimulating places where they can
also do their shopping.
\u2018The tail does not wag the dog\u2019, as the
proverb goes (it is the other way around). The
real issue is to turn the store itself into a
brand. Among distributors, the brand
manager is no longer there to manage DOBs,
but to ensure the coherence of all the brand
project\u2019s activities. This presupposes that
there is a brand project, with a vision, a
86 WHY IS BRANDING SO STRATEGIC?
mission, strong values that are felt internally,
and implementation well beyond the store
itself and the private label products.
Competing against distributors\u2019
brands
We are frequently asked, how is it best to
compete with distributors\u2019 brands, which are
\u2013 as their market share attests \u2013 the number
one competitor of the big brands? Procter &
Gamble Europe has long believed that it was
competing against Unilever, Henkel or
Colgate, old friends which share the same
business model, the same cultural references,
and even the same HEC MBA\u2019s. The consumer
sees things differently. Moreover, it has been
shown that an excess of price-based promo-
tions created sensitivity to price and led
consumers to try distributors\u2019 brand products,
itself a preliminary step to trying low-cost
products. There are different levels of response
to the question above, some tactical, others
involving a revision, not of the brand, but of
the business model.
A precondition: do not tolerate brand
imitations
In developed countries, brands fall victim to
unfair competition on the part of distributors\u2019
brand products, in the form of imitations of
their distinctive symbols. This imitation is
anything but accidental, as the design and pack-
aging agencies recruited for the purpose well
know. The national brand product is used as a
brief, not for what to avoid \u2013 according to good
brand principles \u2013 but what the rival should
most resemble. This is where competitors
increase their \u2018me-too\u2019 product\u2019s chances of
success, by closely imitating \u2013 albeit with a few
differences \u2013 the characteristics of the targeted
brand product, as well as its distinctive marks.
To be considered as an unfair threat, the
imitation must be likely to cause confusion in a
consumer of average attentiveness.
Imitations can come either from competing
producers, or from the product\u2019s own distrib-
utors \u2013 and the response must vary depending
on the individual case. Most big companies
would in fact be reluctant to take action
against their distributor if they believed that
one of its distributor\u2019s brand products, placed
alongside one of their own branded products,
was imitating it too closely and constituting
an act of unfair competition. It is true (see
page 78) that the second phase in the imple-
mentation of a distributor\u2019s brand policy is
generally to imitate the targeted market leader
on a shelf by shelf, reference by reference
basis. It can even be the case that distributors\u2019
brands within a given group copy one
another. Bicycles sold by Auchan superstores
have borne an extremely close resemblance to
a best-seller at Decathlon (the \u2018be-twin\u2019): the
two stores form part of the same group.
Actual legal proceedings against the
distributor are rarer still. Big companies, many
of whose products are stocked by the
distributor, fear a Pyrrhic victory and prefer to
build up a dossier with the aim of avoiding
legal action and resolving disputes amicably.
The dossier consists of a form of proof that
could be produced as legal evidence if
required, for it is in fact possible to devise a
scientific approach to prove illegal