Can Own-Brands Take On The Big Names?

In a recent survey conducted by Haymarket’s Marketing magazine and the Toluna market research firm, it was found that two thirds of those asked had switched from branded products to own-label products as a money saving measure. In the same survey, 67 percent of consumers judged own-brand products to be as good and branded goods, and perhaps most startlingly, 64 percent of customers said that they would not be returning to branded goods once the economy improved.

But is this really just a question of customers being tighter than normal? In the last few years, supermarkets have been giving their own-brand products a huge makeover, making them so much more than just a cheap knockoff of the branded products.

With new ranges such as the Tesco Finest Range, or Sainsbury’s Taste the Difference campaign, supermarkets are working to build up a brand in their own right.

MORE THAN A CHEAP ALTERNATIVE
As well as recruiting the celebrity clout of Jamie Oliver, Sainsbury’s own products have been competing on issues of taste, health and ethical impact. The Sainsbury’s site proudly boasts: “We don't compromise our values to bring you great products at low prices. Our basics range includes RSPCA Freedom Food approved salmon, and British and Irish Red Tractor certified beef.”

Dave Brown, UK Chairman of design agency The Brand Union has noticed this trend, pointing out that although customers may be looking out for their wallets “another influential factor everyone should be paying attention to is the growing desire by savvy consumers to understand the hidden truth behind what they're buying beyond the labels - whether a product is healthy and an ethical choice”.

It’s a trend that has had some of the bigger brands running scared. Earlier this year, Premier Foods, the UK’s largest food producer and the company behind brand behemoths such as Mr Kipling, Bisto and Hovis, launched its “Great Little Ideas” campaign, a direct response to customers’ growing preference for own-brand products.

Brown sees this has part of a broader trend on the part of branded products.

"It's almost inevitable that legal copycat packaging battles will continue to flare up this year, but we will also see brands trying new strategies to curb the impact of own brand products on their sales," he said.

THE “COPYCAT” PROBLEM
“Copycat” branding is a thorny issue, for both the big brands and own-brand products. Alison Bryce is a partner in the intellectual property and technology team at Maclay Murray & Spens LLP, and a regular contributor to Food & Drink Digital. She is familiar with the legal problems thrown up by “copycat” brands. Following the recent case of L’Oreal v Bellure, Bryce believes lesser brands will have to be much more careful when trying to mimic the packaging of the big brands.
Contrary to previous interpretation of the law of trade mark infringement, the ECJ held that the packaging of the perfumes was illegal, even though there was no likelihood of confusion between the products.

“This decision has been welcomed by brand owners, particularly as it clarifies that successful action against trade mark infringement does not depend on likelihood of confusion or damage to the trade mark,” Bryce explains. “This should make it easier for brand owners to bring successful actions against manufacturers of copycat products, although it remains to be seen whether there will be a rise in actions, particularly where the manufacturers may be potential or actual customers.”

BACK IN BRANDS
While own-brands may seem to metamorphosing into a force to be reckoned with, this isn’t an entirely one way trend. The issue of copycat brands raises an important point, at the end of the day, consumers are drawn to the strong identities those brands have set out for themselves.
Historically, Marks & Spencer has been an exclusively own-brand store. Any food and drink products you found there would be under the Marks & Spencer label. This was until November of last year, when the company announced it would be stocking 400 branded grocery and household products in its UK stores.
At the time John Dixon, Executive Director of Food said, "There are some products that we could simply never compete with, like Marmite and Kit Kat, and other areas where, whilst we have a great M&S equivalent, the leading brand dominates the market.

"Adding the nation's favorite brands to our mix offers our customers more choice and strengthens our position as the UK's leading quality food retailer."

Marks & Spencer Chairman Stuart Rose added “Our customers are at the heart of this decision – they lead increasingly busy lives so buying those essential, must-have branded products at M&S will help save them time. It will be so much more for convenient for our customers to get what they need from M&S rather than having to go elsewhere.”

In other words, for retailers this a win-win scenario. The big supermarkets might want consumers buying their own-brand merchandise, but they want the consumers buying the big brands from them too. Either way, the battle of the brands is far from over.