Magazine article Marketing

OPINION: Wise Marketers Know When to Throw in the Towel on Own-Label

Magazine article Marketing

OPINION: Wise Marketers Know When to Throw in the Towel on Own-Label

Article excerpt

The typical format for managerial learning at a business school usually involves students working on case studies during their classes.

This approach often guarantees a much richer learning experience that the lecture format.

The classic criticism of the case study method, however, is that it encourages managers to believe that any problem can be solved. In fact, many strategic problems are intractable. Sometimes the biggest managerial skill of all is to learn which battles to avoid fighting in the first place, rather than to contemplate how every battle may be won.

I was reminded of this issue last week. I was wrapping up my brand management course with a session on private labels. Private labels, own-brands or store brands, have always been with us. From their origins as 'recession brands' in the 50s, through to their evolution into premium-priced luxury alternatives, consumers have always had a private label option.

Private label now counts for half the transactions in most leading supermarkets in the UK. In many categories its relative share of the market continues to grow.

The intriguing question from the manufacturer's point of view is what to do about this growth. There are a number of options, but none of them appear to be able to stem the tide. The classic approach, adopted by Coca-Cola, was to fight the threat of store colas by focusing even more heavily on brand. The 'Always Coca-Cola' campaign was a direct response to the threat of own brand.

The problem with this approach is that many brands have already eroded their brand equity through sales promotions. …

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