Product innovation! This was the stock answer of manufacturers if you asked them about the real added value of a premium label compared with a private label. For manufacturers, considering all their R&D possibilities, market insight and development budgets,would actually need to stay one step ahead of the retailer when it comes to the introduction of new products.
Is this an outdated point of view? ‘No,’ says the premium label manufacturer, and he will come with a series of examples of new products, brand extensions and combinations of these, such as the Senseo coffee maker launched by Philips and Sara Lee/DE.‘Yes,’ the retailer will say. ‘We are launching fewer new products, however, by linking loyalty card data to our knowledge of the shop floor we introduce products that customers really want.
Plus,we allocate shelf space and this will largely influence the success of the product!’Much to their dismay, manufacturers see their position becoming weaker. Also, new means of communication such as mobile telephony make consumers more difficult to reach with traditional mass communication, used of old by the industry to build brands.
And in the meantime, the retailer continues to develop. From simple private label development at the start to complete ranges of basic price products, a mid segment and even premium ranges that are higher-end than the premium labels. Furthermore, specialty ranges are often developed for special seasons, or special target groups. Take organic food, for example. In combination with the new shelf plans, that leave only a minimum of space for the premium labels, the position of the premium labels seems almost hopeless.
And yet: there is hope. But it does require a shift of manufacturer focus. From an often unilateral marketing and communication policy aimed at building the brand to a multi focus approach where the shop floor (P.O.S.) is in included in the strategy as well. There are plenty of possibilities for this. P.O.S. systems, instore television and narrow casting, cross merchandising and permanent display. These are just a few examples of what manufacturers can do to raise the shop floor to an innovative communication platform, in collaboration with the retailer.
Within such a joint platform, to which all stakeholders contribute their own specific know-how, ever more possibilities will be created.