Brand designs: The lure of the names we know

Heinz, Kraft, General Mills, Nabisco, Oscar Meyer, Yoplait, Frito Lay, Kellogg’s, and Sara Lee- what do these names all have in common? They are brand names that we all know and love in the consumer goods industry. I am looking into doing a study on consumer goods brand loyalty in this particular economic recession. This topic really interests me because I myself am really brand loyal usually. But when I see the private label right next to my brand label on the shelf being almost a dollar less, sometimes I find the private label in my shopping cart at the end of the trip. I generally associate brand names with good quality, healthy ingredients, delicious, etc. and I generally associate private labels with just the opposite. So I wanted to research this topic and see JUST what interests us and strikes us about the brand names and how far are we willing to stick with it even during this time of economic recession.

Through some of my preliminary research, I have found that private label sales grew 10.2% in 2008, while brand name sales increased only 2.6%. This shows that consumers have really been more interested into the private labels. For example, one consumer says “the only difference is the label on the package”. Another factor that is interesting is that sometimes when you have a whole bunch of different brands out there and not a lot of differentiation among some of them or not a lot of knowledge about them, people get frustrated and confused and end up just picking the generic brand (private label). We studied this in the pod cast about choices. Sometimes, choices are not the best thing for companies.

Furthermore, seeking to combat stiffer competition from cheaper store brands- big-name food manufacturers, including Kraft Foods and General Mills are joining forces with retailers to promote their brands alongside private-label goods. In the past, big food companies didn’t worry too much about cheaper store brands encroaching on their turf, because consumers were more loyal to name brands and generally believed better quality justified their higher prices. But now, retailers have improved their store brands and have mimicked the innovations that brand names have introduced (such as cheese with extra calcium).

An aspect of brand loyal-ness that I am looking into is the reward programs. Through some research, I have found that brands better keep members by instilling reward programs. A new study from Colloquy finds that customers who participate in loyalty-building efforts, like MyCokeRewards and the Best Buy Reward Zone, at 70% more likely to actively recommend a product, service, or brand than the general population.

From the article I have cited below, one person says “Branding is so much about psychology it’s almost frightening”. Relating this to our customer insights class- the lecture about the differences between Miss Clairol and L’Oreal and how they make a woman feel, once they dye their hair with these specific brands. For example, the Miss Clairol feeling was the girl next door but just a little prettier and L’Oreal made women feel sophisticated and worth it (hence the tag line “because you’re worth it”).

Some questions I will be looking into regarding this topic are what really drives a consumer to be brand loyal? To what extent are they brand loyal? What kind of products are they most brand loyal? More to be found.

Article used: "Brand designs: The lure of the names we know" By Meg Carter http://www.independent.co.uk/life-style/food-and-drink/features/brand-designs-the-lure-of-the-names-we-know-1607049.html

how well do you know me?

As for retailers, it is crucial for them to know me very well if they want my business. I think some do a really great job and some can't seem to get the hang of it. In my opinion, they really need to integrate the answers to these questions in order to start down the road of success.

o who are your most valuable customers?
o what do they need?
o what motivates them to purchase?
o can you customize aspects of your busines to meet customer's needs?

These days it doesn't matter how many times during experiments the company's product/service performs wonderfully, if it is not something we want or need, most likely it will not survive. More and more it is the customers who define what companies need to deliver. We define what the "store" is. By knowing who your most valuable customers are and anticipating their needs, companies can leverage that information across marketing, sales, and operations. They become successful when they are able to mix this into our store experience to make it meaningful for us.

A good approach to consider when thinking about their business would be to take customer surveys, and lots of them. But it is important to create some sort of incentive so that customers like myself will first- want to do complete the survey, and second- complete it well. For example, sporadically after each transaction at Banana Republic the register will spit out a customer survey opportunity. It typically says that a customer can receive a percentage off their next purchase if they go online and fill out a survey on their experience visiting that particular Banana Republic store that day. The survey takes a good five to ten minutes- as long as you actually think about the service you received. I find that I do. Then you get a discount code good for three months. Too bad there's no alarm that reminds you to bring it with you when you go shopping AND then also pull it out of your wallet where it's been folded for a very long time. After all, the discount is only worthwhile if you use it!



Some more points on customer satisfaction surveys- they are often regarded as the most accurate barometers for predicting the success of a company. Because they directly ask about the critical success factors of a business, when done effectively, customer satisfaction surveys can deliver powerful, incisive information and provide ways to gain a competitive edge. Companies are able to gather, measure, and analyze valuable information with more accuracy, consistency, and in less time than ever before. Obtaining customer feedback quickly helps make sure that a business is meeting (and hopefully exceeding) customer expectations. It also allows visibility to where changes should be made to increase satisfaction and overall success.

Which actually after doing some more research on Banana for the blog's purpose, I found out that the division of San Francisco-based retailer Gap has signed nine musicians to appear in the upcoming print, outdoor, online and direct mail campaign, which starts Feb. 18. They will be welcoming artists such as Liz Phair, Sara Bareilles, Tommy Torres and band OK Go! They will appear in Banana Republic’s spring and summer 2009 collections. Online, Banana Republic will also feature artist interviews, free downloads and performances. It's funny how companies think that these things will be a solution for the decline in sales or at least attract us into the store to see what they have- the other funny thing is, it will bring in many of us. Becuase like the L'Oreal and Miss Clairol commericals we saw, we long to be like these women/famous artists we see on TV- and really, to us, using the same hair coloring or wearing the same clothes gets us one step closer.

choices

Choices make life difficult. I agree with Barry Schwartz in that choices (the increasing demand for options) decrease consumer confidence and satisfaction, it overwhelms us. In this podcast, Schwartz discusses his research and how it can apply in the online world. He gives practical advice for retailers on how they can satisfy customers and be successful in the online world. Barry Schwartz used to think that the more choice people have the better off they were, but he has found evidence that this assumption can be false, which is why he talks about it as a summary of evidence and an argument on why it overwhelms us when we have too many options- and I think he is right on.

Barry Schwartz talks about how we have 175 salad dressings in our supermarkets, 250 kinds of cereal (all very delicious in my personal opinion). You go to Circuit City or Best Buy and you can build 6million different stereo systems out of the components in stock. Looking in the newspaper, there are 10,000 mutual funds & stocks to pick from. There is no less than 30 kinds of dental floss. There’s simply no area of life where people don’t have an extraordinarily large number of options in this world.

There are different effects that having too much choice produces:

1. People end up choosing none- they simply pass.
(meaning: a retailer may actually sell less; we don't know how to choose- for me, the decision is all together too much of a hassle, so I walk away, empty handed).

2. People overcome this indecision and choose- sometimes badly.
(meaning: So you might choose by brand and price and ignore all those wonderful subtle features that producers of these goods take so much trouble to create. Now if it happens that all you care about is the simple things like brand and price, you’re not harmed by this simplifying but if you actually care about other things, you’ll end up making a less than optimal choice).

3. People manage to choose, and choose well- but will be less satisfied if chosen from a large set.
(meaning: So even though you do well, you end up disappointed, since not everything you pick will have the best qualities- it is all about trade-offs).

For myself, I recently bought a digital camera at Best Buy. There were tons of options to choose from- first it was pick the brand. Okay I have Sony, Canon, Nikon, Olympus, the list goes on and on. Next it was pick the megapixels- there are a wide range of these. Then it was pick the color- should I pick a fun color like pink, blue, red- or should I go for the classic colors like silver or black. Going on it was pick the price range, pick the features, pick the camera case, pick the sd card, etc. At the moment I thought, geez can someone just know what I like and tell me "this is the one you need" and make this decision easier so I can start using it? Anyhow, I felt as I left the store I had made the best decision I could have- but in the back of my head, I kept thinking, what if I got that other brand, what if I got that other color, is this camera too thick? would I have liked the others more? I wanted the best one.

So I completely agree with Barry Schwartz when he talks about how even if you make the right choice, you end up thinking about all those other wonderful things you’ve passed up, and that makes your choice less satisfying. We're all human, we want to know we have the best from what's out there- and we obviously need help making decisions like these (whether deciding which camera we want down to which flavor of cookie we want to eat).