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Retail Buying

Notes 13.3.2 Implications for Retail Marketers

1. Collaborative category management is vital. Strategic category management is
instrumental for a retailer to realize its “own” brand goals and aspirations. It requires the
development of a symbiotic relationship with manufacturers and/or suppliers to elevate
relationships and further a mentality of partnership.

Contrary to the previous mindset of private label management, this approach does not
commoditise the manufacturers’ brands by offering a comparable product at a significantly
lower price point. This would undermine the value inherent in the whole category and
lower margins overall.
In this new way of thinking, the retailer and trade partnership becomes more about
cooperation and less about the retailer negotiating with the manufacturer or supplier on
price and listings. By working together, the parties involved can solidify trade relationships
and ensure that the category as a whole remains profitable and emotionally appealing to
the customer so that both private label and branded goods win.
In the spirit of effective category management, there should be collaboration in
understanding and deciding how to optimize the product lines and SKUs that will progress
the category definition as a whole and determine planagrams and shelving scenarios to
rally the greatest degree of category interest and excitement from consumers.
2. Recognize that a salient consumer need should be the springboard for an “own” brand
proposition. The “own” brand promise should be defined as a holistic representation of
resonant functional and emotional attributes and benefits. This ensures that it takes into
account need states that are important to consumers and offers a credible point of difference
from other category players.

By crystallizing a differentiated value proposition, an effective “own” brand considers the
approach that national brands use to arrive at a holistic benefit proposition rather than the
specific positioning they use. This furthers an “own” brand promise that has been informed
by the competition, but is clearly not a “me-too” expression. It is also successful because it
demonstrates a commitment to offer consumers multiple options and varieties with distinct
attributes, benefits and price points.
3. Do not underestimate your power to leverage and own the consumer connection. A
successful “own” brand literally has the ability to own the consumer connection. If it is
broadly defined, it has the capacity to strike a chord with consumers in multiple product
categories.
Unlike national branded products, “own” brands are exclusively available through a
specific retailer and can often transcend specific product categories because they use a
consumer focus rather than a product focus as their brand foundation.
They have the potential to be magnets that draw consumers into one specific retail store
over another. Take Walmart’s success with its exclusive brands like Ol’Roy for dog food or
Reli-On for diabetes. These brands inspire such trustworthiness and allegiance from their
loyal consumers that Walmart is their premeditated retail source whether they are running
low on dog food or diabetes medication.

The exclusive brands may be the reason that consumers are initially drawn into the store,
but once they are there, Wal-Mart also has the opportunity to encourage them to spend
more on incidental or impulse purchases.

Therefore, exclusive or “own” brands not only reinforce enduring loyalty and positive
feelings for the overarching retail brand, they often enable the retailer to capture a more

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