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Brand Winners... And Losers: Store Brands and Obama as Brand "Change"
Brand Winners… | And Losers |
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The Marketing Doctor says:
Winner: Store Brands
Loser: Obama as Brand “Change”
This week’s brand winner and loser are both more potential than actual at this point —by this I mean, it all depends on what these two brands do next (but both are at pivotal moments):
The Winner:
Following up on the Marketing Doctor’s recent calls for value delivery in this challenging market, our winner is store brands.
The NY Times has a great article on how store brands are making money for grocery stores and how they might be evolving from copy cats into real marketing answers to customers’ needs. See that article here.
The article’s worth a read and suggests a new approach to marketing by grocers. Kroger’s VP for corporate brands, Ms. Severin, has this to say about the process of developing a microwaveable pizza:
“This is designed for moms,” Ms. Severin said. “This is a good example where we didn’t knock off the national brand, but we thought, ‘How can we deliver what our customers are looking for?’”
Exactly. Just like the big product marketers, Kroger’s sounds like it is doing product marketing the right way by 1) thinking about customer needs first and 2) building the product specifically to meet those needs.
In the past, store brand people have basically been scavengers, looking at what sells and then piggy-backing off the success by exploiting price point and the momentum of an already developed and marketed national brand. The problem with this approach and why it never resulted in a real threat to the big brands is that they focused on price, not value.
Value only happens when you keep the customers’ needs in mind when developing the product. In other words, product development is marketing and the touchstone for all future brand success.
A product or service should be the best answer to a particular customer need.
Contrary to the smoke-and-mirrors misconception of marketing in which people speak cynically of marketers creating needs, in the real world, the need exists and the product is developed to meet the need. A real marketer is connecting to consumers by providing something they already had in their own heads to some degree. The real marketer’s product or service should be the consumer’s idea come vividly to life.
Real marketing explains that sense of inevitability consumers have when encountering that great new product or service (and explains why the consumer walks away saying things like “Why didn’t I think of that?”).
Now. if store brands can consistently practice real marketing for their products, then they’ll stay winners long after the recession ends. The good news for the big brands is that historically, people have returned to them after the hard times are over.
Why? Because great packaged-goods companies like P&G have battle plans to fight the store brands (for example, to counter the competition from price they’ll do two for ones). Also, grocers with their tight margins traditionally can’t afford all the costs that go into doing packaged-goods marketing right. The best and the brightest in the packaged-goods world don’t come cheap, and neither does top-flight product development.
Still, it’s possible that the traditionally tight margin of the grocer might actually start changing if the grocer manages to put the resources behind doing the real marketing of their store brands. But if the store brand microwaveable pizza doesn’t taste better than the brand name, then Fuggedaboutit winning for the long run.
Stay tuned.
The Loser:
Right off the bat, I want to stress that Obama is not the loser here… his brand “change” is the loser. And it’s not a loser yet, but it will be if he doesn’t take serious definitive action right away in response to the Blagojevich scandal.
Brands are not created in an instant, nor are they destroyed in an instant.
The Obama “change” brand is facing its first real challenge, and even if this story dies —which I doubt— and we seem to move on, Barack Obama will need to address the current situation like he did the Reverend Wright hurdle, or it will mean permanent damage for this brand.
People are suggesting that Obama take a wait-and-see attitude. But politics and brands in politics are not legal cases. He just can’t wait until the jury is “in.”
Obama’s words on the scandal weren’t definite enough, and they seemed too careful given what’s at stake. After all, our President-Elect ran on the “no more old politics” ticket, and so did Blagojevich. This and the fact that both of these men come from corrupt Chicago politics demand that the Obama change brand go proactive.
How to do this? Obama already has the advantage of being the subject of the corrupt governor’s tirade for apparently refusing to pay to play. This is a great platform from which to build.
First, Obama has to harness the rhetoric of outsider outrage.
He has to state firmly and without equivocation that what this governor did was outrageous. It was shameful. And this story is just at its beginning, so if anyone on his staff turns out —contrary to early reports and denials— to have had any contact with Blagojevich in this matter, that person will have to go. Period. Obama should state that he and his team are not part of old politics and never will be.
Obama should also directly address the way Blagojevich claimed to be a reformer and has now been proven corrupt and express that this kind of rotten behavior was the reason he got into politics in the first place.
Second, Obama needs to match this rhetoric with concrete action. He should call for Federal legislation to directly address corruption and pay-to-play by mandating that when a seat becomes vacant, a special election must be held within 90 days. In other words, governors don’t choose, political machines don’t choose, lobbies don’t choose —the people choose.
Some people might argue —like they argued during the Reverend Wright affair— in favor of letting the moment pass quietly. But the genius of Obama during the Wright affair was that he hit the issue head-on, made the speech of a lifetime and changed the tenor of the campaign with one act.
He can do it again by getting everyone on board the “Change Express.” The key is recognizing that as much as the concept of a permanent campaign has gotten a negative rap, there’s marketing virtue in it. Why?
Because when you’re trying to get elected, you really are trying to meet needs.
Obama, the real marketer, identified that there was a need on the part of the electorate to hear him address Wright in a way that explained things thoroughly.
Now, the need —whether it is consciously recognized or not— is for the President-Elect to put big distance between Blagojevich & Chicago and the Obama Change brand.
This is no time for Obama to think that he has arrived. A president never arrives.
The best presidents are always adapting to meet the needs of the electorate and the times. The best presidents are real marketers, and campaign thinking can be great because it focuses the mind and prevents an awkward or half-hearted response to crisis.
As I said, this isn’t the end of the Obama “change” brand, but if he doesn’t hit back hard right now, then it might be.
And remember, it’s always easier when you keep marketing and branding in mind.
TODAY'S TANTILLO TAKEAWAY -
Marketing never creates needs; it responds to needs that are already present but might be unrecognized in the consumer.
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