ASDA is in the process of reformulating its private-brand food items after extensive consumer testing, with "Chosen by you" as its strapline (see image). This investment in reformulation is likely to pay off in higher awareness and higher sales because consumer behaviour has shifted toward buying products that don't necessarily carry national or international brand names.
In India, store brands are not only gaining share, they're being priced at or near what national brands can command. "We price some of our products on a par with national brands because we sell quality products," says the merchandising executive in charge of food and FMCG at Spencer's Retail. "Our 2010 Shopper Profile Survey has shown that 80% of our store shoppers have been visiting us for more than three months now. It is this trust which rubs off onto our private brands business."
Major firms have introduced lower-priced products to compete with store's private brands, but this strategy brings its own risks. P&G in fact may have found that its Tide Basic was so popular that it was siphoning sales from other Tide variants. Yet if consumer behaviour is being reset, buyers will not make the automatic choices they once made. Tide Basic might now appear a much better value in the "new" consumer mindset, because of the Tide name and the lower price. Yet P&G pulled Tide Basic a few months ago, even as it continues other budget-priced branded variants such as Bounty Basic.
The battle continues as marketers try to determine whether consumer behaviour has been reset for the present or for the longer term.
