Wrong. Those are the shelves of history you’re thinking of. Today, own-label products are voracious competitors, increasingly aping the look and feel of the big name brands and spreading their tentacles into every sector, including pharmaceuticals.
The challenge for brands grappling to maintain market share in an increasingly value-driven economy, is to continue to evolve and innovate to maximise the advantages a trusted name can bring.
Branding has been used for centuries as a way of distinguishing one producer’s goods from another. An understanding of customer-based brand equity is essential in order to fully understand branding and its advantages. In essence, customer-based brand equity is the differential effect that brand knowledge has on consumer response to the marketing of the brand. And that’s the key – consumer response.
The continued economic downturn in the UK has had a significant effect on consumer behaviour, with many turning away from the more expensive branded items and towards similar own-label options in order to save money. This has led to increased investment and development in own brands, as retailers compete for consumers.
So, today, in whatever category you care to choose, whether cereal, soup or cough syrup, branded products are competing for your attention. And the brands are invariably more expensive than their generic or own label counterparts.
The automatic assumption that the higher price meant higher quality has now faded. Particularly since retailers have sought to build and protect their own brand equity, own-label products must now be of good quality, or at least live up to the standards suggested by their branding – Tesco Value range versus Tesco Finest for example.
As a result, the own-brand market has enjoyed significant growth in recent years, rising by 51.7% since 2007, to reach £118.13bn in 2011. Key Note estimates that nearly 40% of total retail sales in the UK are now represented by sales of own-label goods.
It’s been a quiet but widespread revolution – according to market researchers Mintel. 2011 saw, for the first time, more own-label products launched in the UK than branded goods.
OTC medicines and Pharmacy medicines are not immune from this trend. In the last 20 years an increasing number of brands have moved from traditional pharmacy outlets to the supermarket and forecourt shelves. In this environment they must compete directly with competitor brands and own-label products.
And thanks to last year’s ‘patent cliff’, it’s not likely to get better any time soon. In 2012, more than 40 brand-name drugs – valued at $35 billion in annual sales – lost their patent protection, meaning that generic companies were permitted to make their own lower-priced ‘own-brand’ versions and, for the first time, share in the profits that had exclusively belonged to the brands.
Never has branding and particularly packaging had such an important part to play.
The reality is that established brands have been concerned with own-label products for years and the rise in the power of the retailer and its own-label offering means that manufacturers are often searching for packaging innovation that is harder for own-label products to copy.
Pack design should remain as a key focus for the OTC brand manager to ensure that brands continue to stand out from the competitors on shelf. On shelf, with all the surrounding noise the consumer will only spend a few seconds scanning the fixture, so pack design is vital. For a pack design to truly reflect the personality of the brand and reinforce its positioning, it is vital that it contains visual equities. These are split into form (shape); colour; layout (hierarchy and architecture); iconography (graphical devices) and typestyle (font). Visual equities should be elements that are distinctive (to differentiate your brand), ownable (and not easily copied) and inextricably linked to the brand in the mind of the consumer.
With the increased competitor set the use of branding devices is vitally important. Examples include the depiction of the brand name itself e.g. Cadbury’s chocolate, a graphical device illustrating the product function e.g. the Finish dishwasher glass or a miscellaneous icon such as the Barcadi Bat, the Apple computer logo or McDonalds golden arches.
As the cost of developing new brands, particularly in pharmaceuticals, is prohibitively expensive, manufacturers are turning to new launches under existing brands. This can be much more cost effective but unless the packaging uses an architecture that allows for easy incorporation of new line extensions, things can get messy. A coherent looking range is very difficult to accomplish but vital if the brand has ambitions to expand its offering, particularly if this is outside its traditional product area. In this case, look to include a consistent branding device across the range that ties it all in together. Heinz and Nestle, amongst others, have employed this very successfully.
The key to success is to build a brand experience that goes beyond the function of the product to help create an exclusive, emotional bond with the consumer that encourages loyalty.
My team at White Communications was recently asked to develop a new packaging design for Sanatogen, a key player in the Vitamins and Supplements market. It’s a brand with genuine customer loyalty and heritage but facing radically increased competition on the shelf. The key task for us here was the development of sub-branding, giving the pack architecture a clear hierarchy of information and shelf standout. Having obtained that we also worked with the manufacturer to use a softer touch sealer to give the packs a better feel for the consumer.
For a brand such as Calpol it was vital for us that all the heritage and trust built up over 40+ years was retained in a new packaging design. For the pack in the Republic of Ireland we kept the core colours of Purple (for the infant variants) and Red (for the 6+ SKU’s) and the widely recognised logo. We did however modify the font in the logo slightly to improve the modernity and added a new liquid swoosh effect to the pack design to create increased shelf stand out and brand blocking in the category.
Earlier I mentioned brand equity. This equity, or value, is the piece of the branding mix that consumers use to inform their decision, in those vital seconds at the shelf. It’s a precious but fragile asset that can take years to build up and needs constant vigilance to stay ahead of an increasingly sophisticated generic pack.