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The Computer is in The Shop Edition of the Cause Marketing Blog

Faithful Readers:

My main computer is in the shop and I’m scrambling a little more than usual.

I saw a news item today from the Associated Press that showed that store brands are showing a meaningful and bottom-line important uptick in sales.

Key sentence…

"Kroger said 27 percent of its sales in its most recent quarter came from its
own brands and fueled most of the company’s overall grocery volume growth for
the year — a trend it expects to continue."
So in honor of my computer I’m going to repost something on cause marketing and private label brands that originally appeared on November 11, 2008.

In the declining economy, people in the UK, the US and elsewhere are buying more ‘house brands.’Of course they are, you say. What could make more sense than to get the same-quality or nearly the same quality for a meaningful savings?

I don’t have a handy chart to demonstrate, but this is what always happens in bad economic times. When the economy dips, sales of cheaper house brands and generics take off. And when the economy recovers consumers go back to the major brands.

For the foreseeable future, price is going to be major driver for the consumer.

Imagine this scenario: a shopper faces two cans of cream of mushroom soup,
the store brand and the dominant brand in the US, Campbell’s. The store brand
has respectable quality and is 26 percent cheaper per ounce.

In a face off like that, Campbell’s market share would erode very seriously
sans their incredible market shelf space and decades-old Labels for Education program, in my view.

Now if the store brand started a well thought-of cause marketing campaign
of its own, all bets are off.

However, I’ve never seen a store brand in the States undertake transactional cause marketing, even though their margins for house brands are generally better than what they make selling the national brands.

I encourage the big national retailers to try cause marketing with their house brands. Because now, in the sour economy, is the perfect time for the bold stroke. Of course, you’d want to test the concept, the approach and the cause with a limited number of markets and a select group of products.

Get that cause marketing campaign right, and when the economy improves, not
all consumers will go back to the national brands.I’d bet on it.

Needless to say, and forgive the commercial interruption, if you need help getting the campaign right, Alden Keene is here for you.

Comments

A News Item in the May 20, 2009 Los Angeles Times says that the big grocery retailer Albertsons is set to dramatically cut prices in an effort to draw customers back from discounters Wal-Mart and Target. http://www.latimes.com/business/la-fi-lower-prices20-2009may20,0,7219379.story?track=rss]

But the Albertsons brand doesn't now and never has stood for discounting per se, although that is what Albertsons parent, Supervalu, is all about.

I've got a better idea: Albertsons should start cause marketing their house brands.

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