Build House Brand Equity with Distinction

There is a trend among retailers to use the same private label brand name across product categories. The reason is that these house brands have succeeded in establishing not only a price advantage over national supplier brands, but also a reputation for superior quality. For instance, Kroger Co. renamed their “Naturally Preferred” and “Private Selection” organic lines “Simple Truth.”
     Currently, private label items cost, on average, about one-third less than the price of the national label brand. But in some categories, the private label item costs more than the average national label brand, and overall, the comparative prices of the private label alternatives are climbing.
     When items carry the same brand name across product categories—such as a bath soap and a shampoo—you’d like to strengthen the brand image by using the same package design. Having almost identical package designs is common with house brands, where a consumer could be looking at tables and tacos during one shopping trip.
     Overall, using a similar package design to build brand image is a good idea from a shopper psychology perspective. Mere familiarity brings credibility.
     There’s a potential downside, though. Research findings from Wake Forest University and University of North Carolina–Greensboro suggest that when packaging is similar across items, the shopper senses a loss of control. The consequence might be that shoppers seek variety beyond the similarly branded items. The shopper becomes a bit less likely to buy the house brand across product categories unless you take steps to restore the sense of control.

• Introduce distinctions by placing products with the same package design in different relative shelf positions for different product categories. With the mouthwash, the house brand is to the top left of the other brands, while with the toothpaste, the house brand is to the bottom right of the other brands. Research at University of Pennsylvania and University of Illinois confirms that random arrangement of a product set can lead to more buying.
• If your merchandising allows this, use variations of the same name. At Trader Joe’s, you might see Trader Ming, Trader Jacques, and Trader Giotto.
• Curb the routine with distinctive designs and color schemes on signage for different product categories. Researchers at Columbia University and University of British Columbia find that such techniques give the shopper a sense of control, and this sense of control curbs further variety seeking.

For your profitability: Sell Well: What Really Moves Your Shoppers

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