Page 207 - DMGT554_RETAIL_BUYING

Retail Buying

Notes to extend into the premium sector. In view of that, its Tesco Finest cookie ranges have been a big
success.
Underpinning Tesco’s winning private label strategy was spectacular packaging design across
the entire range. For instance, Tesco Finest packaging was in silver boxes that were very premium
looking with first-rate product photography. There was also a section of the aisle dedicated to
the range. It was well marketed and supported from start to finish.
Of course, Tesco’s was not baking its own cookies. It was sourcing them from the very
manufacturers with who Sainsbury’s was looking to compete. However, Tesco was offering to
buy at wholesale those products that the branded manufacturers would struggle to sell.
Similar to Tesco in the UK, Canada’s largest food retailer, Loblaw’s is also a trailblazer in the
private label arena. It too perpetuated a segmented strategy for its two proprietary brands.
Together, its No Name and President’s Choice proprietary portfolios have over 5000 SKUs. The
No Name brand is its multiple category, competitively priced, value range of products.
President’s Choice, on the other hand, is a complementary, higher end private label brand that
has premium imagery and a commitment to taste appeal and quality that inspires unquestionable
loyalty to its retailer.

Retail marketers often cite President’s Choice as a shining example in the area of exceptional
private label product quality. This is evidenced by Loblaw’s commitment to the innovation and
creation of a superior tasting, excessively chocolaty, chocolate chip cookie that fulfilled a
marketplace desire for a rich and indulgent consumption experience. By looking at consumers’
needs wants and desires rather than manufacturers’ existing products for success cues, President’s
Choice was able to develop its own unique cookie product that carved out a niche in the category
by resonating with consumers in a way that its national brand competitors had not considered.
This visible shift to a consumer-centric brand definition gave President’s Choice believability
and a point of difference that enabled it to stretch to new and different product categories. It is
now considered a premium brand that transcends food, paper goods, hair care and even plays
credibly in discrete categories like financial services.

In the US, Trader Joe’s is a prime example of a retail brand that uses multiple best-practice
strategies for its proprietary portfolio offerings. While Trader Joe’s may be considered small in
reach when compared to other food retailers, it is clear that this brand has been developed
around its target audiences because it galvanizes a cult-like following of loyal gourmet food
enthusiasts.
The supply side of the coin is as interesting to note as the consumer demand side. Trader Joe’s
should be admired for its ability to manage and sustain powerful relationships with
manufacturers and suppliers. It purchases in bulk from manufacturers whenever possible and
does not mandate slotting and promotional allowances from partners.

In addition, a clear commitment to superior product, a store environment that furthers the
brand proposition and well defined merchandising strategies round out the strategic direction
of this retailer.

Did u know? Trader Joe’s private label offering contributes powerfully to its brand
proposition; approximately 85 or 90% of store offering is private label, there are about
2,000 SKUs in the portfolio, and sales per square foot are more than twice that of
supermarkets and three times that of other specialty stores.
One proprietary branding approach that is worthy of note is that of the upwardly mobile Target
brand. One of the many reasons Target resonates with its consumers is by borrowing equities

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