You are hired as a consultant to produce a recommendation on a new branding strategy for a private/store brand program for a major regional successful grocery store retailer. NOTE: The retailer has about 100 stores in a 4-state area. The retailer has been doing a wide variety of private label branding for the past 35 years, but the brands have lacked consistency in name, appearance, etc. Research shows a low level of consumer loyalty to the existing private label products, so the retailer is prepared to remove them if a new program that you develop is successful.
The prior pricing strategy on all private label products has been to use a price of 10% below the price of the category leader. This helped generate slightly less than twice the profit per package versus the higher priced national brand.
All existing store brands are capable of achieving an ‘average’ quality rating by consumers. This is acceptable to the retailer, so no change in product content is needed in this project.
The regional retailer wants the new program introduced in a few select categories that are most likely to be accepted by the consumer. Secondary product introductions would result about every 3-4 months in other categories that face higher levels of competition and/or consumer switching resistance. It is estimated that it would take 5 years to get all of the hundreds of private store brands changed.
- Propose a single brand name or a variety of names for different product categories.
- Propose 5 to 10 product categories that should be initially introduced
- Propose a low-cost advertising/promotion/merchandising communication program to support this new program that begins with limited category coverage.
- Propose a pricing program relative to the average price of the category leader. Explain the reasoning for the pricing plan.