No-name brands are an accountant’s dream – you can save heaps of money by letting someone else pioneer and build your brand. It is a contradiction in terms, and feeds off the popularity of famous brandnames and the consumer’s perception of a low price.
In an article originally published on page 11 of The Star (South Africa’s biggest daily newspaper) on August 25 2008, a columnist remarked that at a local Pick n Pay (one of the large supermarket chain stores in South Africa), several No Name brands were more expensive than their branded counterparts (up to 18% more on the specific products mentioned in the article). She added that the consumer was being led to believe that the supermarket’s store-brand products were less expensive than branded products due to non-branding and less attractive packaging. But this is often not the case.
Pick n Pay’s general manager for corporate brands commented when asked for a response to the above: “The No Name(TM) range had grown from 14 lines at its launch in 1976 to more than 500 lines now, making it the most recognised store brand in the country.
“Hundreds of entry-level brands had entered the market to compete with the success of the No Name(TM) brand,” she said, but admitted that while prices were monitored weekly to ensure that the brand still delivered value for money, “aggressive promotional activity” from retail brands and “efficient buying” by Pick n Pay meant that the No Name lines “will not always be the lowest price in store across the range”. But as part of a rebranding exercise, a new, smaller range of No Name(TM) items would be introduced by early next year (2010) “in categories that in this price position can be maintained, as per the original claims in 1976”.
House brands are propped up no-name brands that would otherwise fail. A statement – including “a unique double-your-money-back guarantee” by Raymond Ackerman (the founder and chairman of Pick n Pay) with his signature appears on every Pick n Pay No-Name brand product. (And what a mouthful “Pick n Pay No-Name(TM) Chicken Noodle Instant Soup” is.) Why go to such extraordinary lengths to assure the consumer of the product’s quality?
It also serves as an excuse for the house to blackmail the suppliers of the popular brands to supply and pack the product for them or to leverage the price. Despite claims like “making your money go further”, no-name brands are more often than not priced very similarly or are even more expensive than the popular brand counterparts. The extra margin obviously goes into the pocket of the house.
In 2009, the Ackerman clan, Raymond the “champion of consumers” and “the housewives’ friend” and two family members, were collectively worth more than US$5,4-billion (ZAR50-billion). Branded products are also frequently absent (by design I think) so a direct comparison of price and goods are not possible. No-name brands are a clever indirect and legal way of squeezing extra margin and exploiting real brands and so robbing them of the profits they are due by the retailer. The law should require that when a housebrand is on offer, its real branded counterpart should occupy the shelf space on either side.
Alexander Greyling is the Author of Face your brand! The visual language of branding explained and is one of South Africa’s top branding experts. In his eBook he provides indispensable facts and logic for creating a successful visual brandmark through his seven essential elements of a successful brandmark.
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