Takeaway: In light of recent economic conditions, consumers are arguably more focused on value than ever before. This, combined with the increasing power of national retailers, now limits consumer products and services companies’ ability to deliver differentiated benefits to customers.
Faced with these new competitive pressures, brand managers must form new strategies for connecting with their customers to reinforce the value of their brand.
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Excerpt from FastCompany, “Logos Get Lost in the Supermarket, Here’s Why” by Jamey Botter, March 11, 2010.
Logorama, the movie comprised entirely of animated logos, recently won the Oscar for best animated short film and is an excellent representation of the technicolor tapestry of branding that our world has become.
What would the world be like if there were no more brands to differentiate products, inspire us, or give us a good feeling about a company or product we’ve never tried before? I’m one who thinks it would be bad for brands to meld together into a homogenized mess, and I see that starting to happen in places. At the rate things are going, someday soon all brands will look like Walmart’s Great Value label.
Why is this happening? It’s partly because value is in great demand now, with unemployment still in double digits throughout parts of the country. It’s also because retailers are putting pressure on manufacturers to differentiate their brands inside their stores, so that a brand doesn’t look and act the same in one store chain as it does in another. If brands fold to this pressure, they become diluted and change what they really stand for. This erodes brand equity with consumers and eventually, retailers decide they don’t need certain brands anymore and can easily outsource the product cheaper themselves to increase their margins. So now those manufacturers are out, and jobs are lost. And so is the brand.
Private label brands grew at twice the rate of national brands over the last decade. Retailers like Walmart, Target and Costco are narrowing consumer selections everyday. Walmart recently took out Glad and Hefty storage bags to give more space to its Great Value brand. Walmart brought Hefty back, only after the company agreed to manufacture its Great Value bags.
That sort of manipulation will continue to happen unless brand managers, strategists, designers and manufacturers stand up to big-box retailers and reinforce the naturally differentiating attributes of their brands. They must build their brands so the retailer depends on them and the manufacturer, like the good old days.
Over the last 100 years, brands have played an important role in our society. The danger of private labels taking over the national branding landscape is the loss of meaning and value in the brands we love, prefer and recognize. Not only do our favorite brands help us distinguish product attributes, they inspire and motivate us, and give us a sense of individualism and choice.
If price is the only thing we as consumers are driven by, then sure, just make all the brands the same, Big Brother. But understand that what starts at retail can mushroom to other industries. Soon, we could all end up buying gas from one brand of gas station. Bank at one brand of bank. Wear clothes from one clothing company because they’re all alike anyway.
Edit by BHC
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Full Article:
http://www.fastcompany.com/1579214/when-private-labels-take-over-the-world
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The Homa Files 
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