Kimberly Reach

Case study: Branding recommendations for a major regional grocery store retailer’s private label brands

This case study includes recommendations for a major regional grocery store retailer that has carried private label brands across categories for over 30 years. The private label brands have inconsistent naming and appearance. The private label brands have low customer loyalty. The client would like recommendations to increase customer loyalty on private label brands, that can include a new private label program or rebranding the current private label brands. The client would like to introduce the rebranded products in phases over the next four years, with following introductions happening every four months.

Executive summary

This report provides recommendations for the client, a major regional grocery store retailer, to increase sales on its multiple private label brands. Currently, these brands do not have consistent naming or branding conventions. I recommend the client rebrand the multiple private label brands to one private label brand that offers products across categories, with the brand name, “A Little Better.” A Little Better brand products will follow consistent brand guidelines and be easily recognizable to consumers. The first phase of the rebranding will target categories in high-traffic aisles of the grocery store that are grocery staples. At this time, I recommend maintaining the current pricing strategy, which is 12% under comparable category leaders. This pricing strategy will be reevaluated with each phase. Appendix 1 includes a table with suggested products in each category included in Phase 1 of the rebranding, the price of the category leader, and pricing for A Little Better brand products including promotional pricing.

Clear branding combined with a strategic marketing mix focusing on organic growth will positively impact brand awareness and consumer trust, which will increase sales. Phase 1 of the rebranding efforts will create a solid foundation for the client’s subsequent phases. I recommend that later phases incorporate paid advertising methods in order to target categories with resistant consumers. These recommendations will support the client in achieving increased revenue through increased brand awareness and building consumer trust.

Industry review

Private label brands are an accepted aspect of the consumer shopping experience and are generally expected from certain retailers. Globally “there has been an increase in the private label brands’ market share and penetration” (Porral, et al., 2016, p. 280), with private label brands accounting “for over 22% of the grocery sales in the United States” (Keller, et al., 2020, p. 1) and “approaching the 50% mark” (Keller, et al., 2020, p. 1) in some European countries. Some retailers create multiple category-specific private label brands while other retailers create one private label brand with products in multiple categories.

Current market trends indicate that retailers with multiple, separate private label brands may have more success by rebranding to one or more cohesive private label brands that span across product categories. Retailers that have done this have experienced increased revenue across product categories (Keller, et al., 2020, p. 14). Consumers view private label brands as an extension of the retailer, which has a direct impact on the consumers’ perception of the quality of the private label brand and the consumers’ willingness to buy the private label brand (Mostafa, et al., 2018, p. 355). This supports the recommendation to establish an easily recognizable private label brand that offers products in multiple categories.

Comparable private label brands

Private label brands that are comparable to the client, a major regional grocery store retailer, are Target’s private label brand Good & Gather, Whole Foods Market’s private label brand 365, and Safeway’s private label brand Signature Select. These private label brands cover multiple categories, offer products consumers trust, and have recognizable branding. Understanding what makes these private labels unique and successful will help guide the recommendations for the client.

Target is a big-box general retailer that offers aesthetic products at a discount. Good & Gather’s slogan is, “A new way to eat well every day” (Target, n.d.). On Good & Gather’s product categories include meat and seafood, frozen foods, dairy, produce, deli, snacks, beverages, sauces and spices, and pantry items. On top of “fresh new favorites” (Target, n.d.), Good & Gather offers a satisfaction guarantee, “Love every bite or your money back” (Target, n.d.). Figure 1 displays a variety of products offered by Good & Gather. Product packaging is fresh and exciting, making consumers delighted to choose these colorful products, while featuring Good & Gather’s recognizable “G” logo and branding.

Figure 1

Image of select Good & Gather products (Watts, n.d.).

Whole Foods Market, bought by Amazon in 2017, is a natural foods grocery store that prides itself on quality products with ingredients consumers can trust. Part of the Whole Foods Market shopping experience is trusting that each product on the shelf meets Whole Foods Market’s quality standards. The 365 private label is an extension of the Whole Foods Market brand. 365’s slogan is, “Ingredients you can trust. We’ve got high standards for what goes on our shelves. We ban hundreds of ingredients in the food, supplements, body care and cleaning products we provide on every aisle in our stores” (Whole Foods Market, n.d.). 365 offers over 3,500 products in multiple categories including household categories and grocery categories. Figure 2 displays a variety of products offered by 365. Product packaging is simple with minimalistic graphics, reflecting the ingredients excluded from products, while featuring 365’s recognizable logo and branding.

Figure 2

Image of select 365 products (Whole Foods Market, n.d., Online image).

Safeway is an everyday grocery store with an emphasis the local community. Safeway offers grocery needs and household basics with a corner-store type, local shopping environment. Signature Select’s slogan is, “Thousands of products at affordable prices for cooking and home, in every aisle” (Safeway, n.d.). Signature Select offers products in multiple categories including household categories and grocery categories. Figure 3 displays a variety of products offered by Signature Select. Product packaging mimics familiar brands and uses warm colors, reflecting familiar products and homestyle meals, while featuring Signature Select’s recognizable logo and branding.

Figure 3

Image of select Signature Select products (Safeway, n.d., Online image).

Brand name and slogan

Currently, the client, a major regional grocery store retailer, provides multiple store brands without a consistent name or appearance. Consumers are not able to recognize the client’s private label brand products. To provide a branded experience, I recommend that the client rebrand its multiple private label brands to one private label brand with one name and consistent brand guidelines. The suggested private label brand name is: “A Little Better.” This name will include the specific product, such as: “A Little Better Butter,” “A Little Better Bread,” and “A Little Better Paper Towels.”

The last word in this suggested name is “Better,” which means “of a more excellent or effective type or quality” (Oxford Dictionary, n.d.). The word “Better” is related to the Old English word bētan, which means “improve” (Hoad, 1996, p. 39). For the consumer, this word will have connotations of being an improved option, perhaps compared to competitor products. The first words of the brand are, “A Little.” For the consumer, this phrase will have connotations of being an incremental improvement or slightly superior, perhaps compared to competitor products. Together, the words in this brand name will have connotations of being a slightly superior product of quality or a small amount of improvement over other options. This brand name will assist in positively positioning the client’s private label brand.

The suggested slogan for the private label brand is: “The products you need, the quality you want, a price that delights.” This slogan addresses consumer needs, consumer expectations, and consumer motivation. The first part of the slogan, “The products you need,” captures the variety of categories offered by A Little Better brand, discussed in the section below. The second part of the slogan, “The quality you want,” explains consumers will be satisfied with the quality of A Little Better brand’s products. This is supported by the satisfactory customer rating the client has received. Finally, the third part of the slogan, “A price that delights,” captures why consumers choose A Little Better brand over category leaders: the low price while providing a reliable, trustworthy product.

In addition to a consistent brand name and slogan, I recommend that A Little Better brand implement cohesive brand guidelines across categories, including branded fonts, brand colors, approved usage, and brand tone. These brand guidelines will be followed in all areas that A Little Better brand is used, such as on products and in messaging. This will provide a branded experience for consumers when exposed to A Little Better products in marketing efforts or while shopping for products across channels.

Product categories

The client, a major regional grocery store retailer, intends to implement this rebranding across categories in phases over the next four years. The first phase will include 10 suggested categories and impact all store locations. Additional phases will take place at various store locations every four months, with factors such as category competition and consumer resistance determining the specific products included in those rebranding efforts.

To establish a relationship with customers and win customer trust in Phase 1, I recommend that the client target categories with grocery staples on high-traffic aisles of the store. Products in these categories are grocery products customers consumer daily or weekly. These low-involvement purchases will be easier product swaps for customers and will build customer loyalty for subsequent phases of the rebranding efforts.

• Dairy
• Non-dairy alternatives, such as soy, almond, and plant-based products
• Snacks
• Breads
• Spreads
• Sauces and marinades
• Canned goods
• Pasta
• Refrigerated meal kits
• Household paper products

For Phase 2, I recommend the client target broader grocery categories and include household and grocery staples on middle aisles such as:

• Cleaning products
• Toiletry items, such as soaps and lotions
• Baby needs
• Beverages
• Frozen vegetables
• Frozen fruits
• Frozen dinners
• Frozen desserts

These household staples will reinforce the client’s rebranding efforts by exposing consumers to A Little Better brand both at home and throughout the store, which provides a strong foundation for future phases of product rebranding in more competitive or niche categories.

Pricing program

I recommend that the client continue with the current strategy of pricing its private label brand 12% under category leaders comparable to the private label products. This means the full price of A Little Better brand will be 12% under category leaders. I recommend to incorporate weekly promotions and member discounts into the pricing strategy, especially during Phase 1 of the rebranding efforts. “Consumers often rely on price as an indicator of quality when selecting between unfamiliar products and services” (Boyle, et al., 2018, p. 647) and prices significantly lower on rebranded private label products than current private label products may be viewed negatively on consumers, viewing the lower price as a lower quality product. However, “[r]esearch has revealed that [private label] buyers can be described as ‘smart’ shoppers” (Boyle, et al., 2018, p. 650) and regular promotions combined with a familiar, consistently reduced price of 12% under category leaders will be viewed positively by these shoppers.

Appendix 1 features a table that includes the suggested categories and a sample of products for Phase 1. This table lists the category and sample product, the full-price comparable products of category leaders, and the recommended price for A Little Better brand products, which is 12% under the category leader. The final columns display suggested promotional pricing of A Little Better brand products, with 5% and 10% discounts, respectively.

Marketing mix

The client, a major regional grocery store retailer, does not currently have an easy recognizable private label brand and is experiencing low sales. The rebranding effort, introduced in phases, will prioritize brand awareness and sales conversions. In Phase 1, brand awareness will be supported by utilizing organic advertising opportunities and sales conversions will be supported with promotions, discussed in the previous section.

The marketing mix of Phase 1 will focus primarily on brand awareness because “familiarity is the most important driver of consumer purchase intention and loyalty to food private label brands” (Porral, et al., 2016, p. 691). Understanding this, the marketing mix will prioritize methods that allow the customer to engage with the products and brand and find out more information about the products and brand, which will positively impact consumer trust (Porral, et al., 2016, p. 691). In Phase 1, consumer touchpoints, including in-store signage and the client’s website, will be updated to reflect the new branding. This will include unique deliverables such as pins and apparel for employees, in-store banners and signage, and exterior banners and signage with messaging promoting the rebranded products.

The rebranded products will be incorporated into existing promotional opportunities, such as weekly flyers, newsletters, and any other form of communications. I recommend the client incorporate new promotional opportunities as well, such as a blog and targeted email communications. While the website will be updated to include the new product branding, a blog will help capture long-tail keywords and educate consumers on brand claims and product use case. This will improve brand visibility and brand awareness. In addition, a blog provides additional opportunities for customers to engage with the brand, building customer relationships, brand trust, and brand loyalty. Targeted email communications can be built in to the client’s existing content calendar. Lists should be segmented and sent custom email communications with tailored brand messaging and personalized promotions, such as a coupon to a free product or a buy one, get one free coupon. It is suggested the following segments are targeted:

• customers that have purchase private label brands prior to the rebranding,
• customers that have purchased comparable products by category leaders,
• customers that are members but have not purchased private label brands or comparable products by category leaders,
• regular customers that purchase over a certain dollar amount each week or month,
• and customers that utilize tiered services from the retailer, such as grocery delivery or custom grocery orders.

Customers that are not in any of the above segments but receive communications should receive a custom email communication with tailored brand messaging and a clear call to action, such as a discount when purchasing private label brand items in a curbside grocery pick-up order.

It is also recommended the client update its social media accounts to reflect the new branding, including graphics like profile pictures and cover photos and copy like profile bios, profile descriptions, and about tabs. I recommend the client update its social media content calendar to include a variety of posts sharing messaging on the rebrand that include relevant links, such as links to the client’s website, links to product pages for private label brand products, or links to blog posts with recipes that include private label brand products. Specific platform recommendations will be provided, incorporating content optimized to each platform.

In addition, I recommend that the client incorporate free samples of private label brands in-stores, a satisfaction guaranteed policy, and educate employees about product changes. The in-store samples will “help the consumer to appreciate the quality of food private label brands” (Porral, et al., 2016, p. 692) and the satisfaction guarantee will “reinforce trust” (Porral, et al., 2016, p. 692) with the rebranded products. Employees must be educated and informed about product rebranding and product claims in each phase of the rebranding. This will prepare employees to answer customer questions regarding product quality and packaging and messaging differences or to assist customers if they are dissatisfied.

Next steps

Following the launch of Phase 1, consumer data will be closely monitored. I recommend leveraging this data and including paid advertising methods to support later phases, particularly phases that will face resistance from consumers and higher competition from category leaders. These paid methods will include partnering with relevant social media influencers and guest bloggers in the food industry. Relevant influencers will assist in differentiating the private label brand and enhancing the retailer’s image. These factors have a positive impact on consumer perception and can increase sales (Mostafa, et al., 2018, p. 355). For products facing resistance from consumers, I recommend incorporating paid advertising on social media and on search engines to increase brand awareness and brand exposure.

The recommendations for Phase 1 of rebranding the client’s private label brands will increase brand awareness, increase consumer trust, and improve sales. These factors will establish a solid foundation for later phases of the private label rebranding.

References

Boyle, P. J., Kim, H., & Lathrop, E. S. (2018). The relationship between price and quality in durable product categories with private label brands. The Journal of Product and Brand Management, 27(6), 647–660. http://dx.doi.org.ezproxy.umgc.edu/10.1108/JPBM-09-2017-1590

Hoad, T.F. (Ed.) (1996). Concise dictionary of English etymology. Oxford University Press.

Keller, K. O., Geyskens, I., & Dekimpe, M. G. (2020). Opening the umbrella: The effects of rebranding multiple category-specific private-label brands to one umbrella brand. Journal of Marketing Research (JMR), 57(4), 677–694. https://doi.org/10.1177/0022243720922853

Mostafa, R. H. A., & Elseidi, R. I. (2018). Factors affecting consumers’ willingness to buy private label brands (PLBs): Applied study on hypermarkets. Spanish Journal of Marketing – ESIC, 22(3), 338–358. https://doi.org/10.1108/SJME-07-2018-0034

Oxford Dictionary (n.d.). Definition of better. Lexico https://www.lexico.com/en/definition/better

Porral, C. C., & Levy-Mangin, J.-P. (2016). Food private label brands: The role of consumer trust on loyalty and purchase intention. British Food Journal, 118(3), 679–696. http://dx.doi.org.ezproxy.umgc.edu/10.1108/BFJ-08-2015-0299

Safeway. (n.d.). Signature brands.https://www.safeway.com/shop/lp/signature-select-cafe-reserve.html

Safeway. (n.d.). Signature brands.[Online image]. https://www.safeway.com/shop/lp/signature-select-cafe-reserve.html

Target. (n.d.) Good & Gather. https://www.target.com/b/good-gather/-/N-yfqzk

Whole Foods Market (n.d.) Find 365 by Whole Foods Market products. https://www.wholefoodsmarket.com/departments/365-products

Whole Foods Market (n.d.) Find 365 by Whole Foods Market products. [Online image]. https://www.wholefoodsmarket.com/departments/365-products

Watts. (n.d.). Target “Good & Gather.” [Online image]. https://www.wattsla.com/target-good-gather

Appendix 1