Magazine article Marketing

Opinion: The Marketing Society Forum - Should More FMCG Companies Launch Their Own Value Ranges?

Magazine article Marketing

Opinion: The Marketing Society Forum - Should More FMCG Companies Launch Their Own Value Ranges?

Article excerpt

Procter & Gamble has dramatically changed strategy by launching a lower-priced nappy line under its Pampers brand, but the risk of cannibalisation may be too much for others to take a similar route.

MAYBE - JULIE BAKER, MANAGING DIRECTOR, SARA LEE COFFEE & TEA UK

We are all familiar with the phenomenon that in mature markets, in the long term, mainstream brands decline while value and premium post strong growth, so it's understandable that the value end is an attractive proposition for FMCG brands right now.

However, apart from the concern of trading your own consumers down and devaluing the brand, in some categories there is another way of looking at it.

The trade-up opportunity might be bigger. Given that it tends to be the big-ticket items that consumers cut back on first (holidays and cars, for example), there is, arguably, less pressure on some of their grocery purchases.

It is well-documented, for example, that home hair-dying kits are selling more, whereas trips to the hairdresser are down; and in our own category, coffee, consumers are telling us that they can't afford to visit coffee shops as often, and so they are prepared to invest a little extra in their everyday luxuries.

In 'treat' categories or those where quality is a differentiator, the premium opportunity may be bigger than the value one.

NO - JEMIMA BIRD, MARKETING DIRECTOR, MUSRAVE RETAIL PARTNERS GB

Taking aside the 'doom, gloom, the world is ending - best bring out a value range' ethos that is doing the rounds as the credit crunch bites, value does, always has and always will be an important part of the customer shopping basket. Therefore, it makes sense for FMCG companies to bring out their own entry point.

However, FMCG brands hold a unique position in bringing brands to the market, so to add a value offer to their key brands may confuse customers into thinking their main brand was overpriced to start with.

It is a dangerous business to toy with customers' emotions, and I would suggest leaving the value own-label position in the very capable hands of the retailer side of the mix. Value and own-label fit perfectly; value leading-brand, I'm not so sure. Would Value Kellogg's Corn Flakes ever taste the same again?

NO - KATE HOWE, PRESIDENT, DRAFTFCB

It's a tempting strategy in these unpredictable times. …

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