House Brands and Innovation
Generic Cola Can - Jewel Supermarket
I read a very interesting post on the Branding Strategy Insider Blog that got me thinking about house brands and how beneficial they are to driving product innovation and in particular a product’s value proposition. Granted house brands are often a lower cost version of a brand name but there is genuine innovation going on here. There is no doubt that the manufacturing processes are being optimized, there are lower R&D costs, product components or ingredients are being changed to add to that cost optimization and of course they are being placed in head to head competition on retail shelves. Nevertheless if the consumer chooses the house brand over the name brand, the price is only one component of that decision.
Twenty five years ago when “generic” brands first hit the marketplace, the “branding” was designed to tell the story that they were a cheap but serviceable alternative to the real “brand name” products. The stenciled font used clearly identified them as taking very little effort in packaging cost and offered a tremendous value and price savings. As a young couple my wife and I made ends meet with these un-branded brands.
Today even though our household income is substantially greater, house brands STILL fill our pantry. Whenever we feel that a house brand is about equivalent to the leading brand we will invariable pick the house brand and typically save a bundle.