FMCG Branding: Top 4 Tips For Competing Profitably Against Own Label Brands

The fast-moving consumer goods (FMCG) market is one of the most competitive and aggressive in the world. Whether your products are foods or beverages, toiletries, cleaning products, household or office supplies, or consumer electronics, your customers have a vast array of brands to choose from—and it’s up to you to build a brand platform, with a sustainable business model, that attracts, retains and grows your target market.

As every FMCG brand owner or manager knows, today’s FMCG brands are not only competing against comparable brands at equal retail pricing levels. In fact, the stiffest competition comes from private label brands offering similar products with significant price discounts, which your business may not be able to match. In a suppressed global economy where customers are looking to make every dollar, pound or euro count, you need a multi-pronged branding strategy that addresses the price fighting battles and enables your brand to flourish more profitably, at higher price points.

4 tips to help you increase your FMCG brands profitability and take market share from private label brands

1. Highlight Innovation

Customers are always hungry for something new and different—as the long lines or queues at Apple retail stores whenever a new iPhone is released can attest. Building a brand promise around innovation can also work for FMCG products. Innovative brands have inherent value to the customer, and can therefore command higher prices.

To bolster sales in its flagging UK and European markets due to damaging competition from private label brands, Unilever has shifted its brand strategy emphasis to innovation. The company has seen early success in UK markets with the introduction of compressed deodorant cans, presented as an environmental innovation in sustainable living across its Sure, Dove, Vaseline and Lynx brands and, the recent introduction of a new toothpaste brand called Regenerate Enamel Science NR5 which highlights a “unique enamel science formula” for rebuilding tooth enamel. This highly innovative new brand has achieved a significant price premium for the category, retailing at $17 /£10 / €13 per tube—much higher than regular toothpaste prices.

Image via www.unilever.com  

The innovation lies in the formula they came up with which combines calcium silicate and sodium phosphate to regenerate enamel by up to 82 per cent in three days, while also making the tooth three times stronger. When you consider 80 per cent of tooth problems in adults are caused by enamel erosion Regenerate Enamel Science NR5 is a very compelling brand innovator.

However the brand didn’t just stop at this one highly innovative $17 / £10 / €13 Regenerate Enamel Science NR5 toothpaste for daily use, to achieve the best effect is has to be used in conjunction with a second product, a ‘Boosting Serum’ if you want to achieve the full 82 per cent effect, which retails at a further $51 / £30 / €38 and gives the user just the ‘once a month’ required 3 day usage amount! The consumer has to spend $51 / £30 / €38 per month on the ‘Boosting Serum’ plus $17 / £10 / €13 on the Regenerate Enamel Science toothpaste, requiring a monthly expenditure of $69 / £40 / €51 per person on their ‘at home’ dental care! So where the average humble regular toothpaste with an RRP of around $7 / £4 / €5 or less endeavours to prevent erosion, Regenerate Enamel Science NR5 is the first to reverse it. Similar to Apple this is a superb example of brand innovation with premium positioning achieving a premium pricing strategy.

2. Focus On Your Brand Story

Stories hold a timeless attraction for everyone, and brands with strong stories behind them are much more memorable and compelling with customers. Tradition, heritage, and history are classic elements for many successful brands, allowing companies like Burberry, Rolls Royce, and Smythson to cash in on higher price points by emphasizing the timeless qualities and standards of their brands. The same principles apply to FMCG goods, with brand heritage delivering a promise to customers that the extra cost is worth paying for. Note: Your brand story must be authentic, irresistible and consistent in a way that’s relevant to your target audience throughout every touch point of your brands’ existence and engagement on or offline.

Image via www.pg.com

The UK brand Fairy Liquid has effectively utilised history and heritage to increase market share and surpass competition from private label brands. Beginning in 2010, Fairy Liquid launched a commemorative heritage campaign celebrating the iconic brand’s 50th anniversary, and a consistent brand vision of mildness and domestic harmony. The nostalgic hark back to simpler times, including a re-launch of its original white bottle packaging, drove impressive year-on-year growth of 13.1% in the hand dishwash category and 24.2% in the auto dishwash category.

 Image via www.pg.com

In 2011, Fairy Liquid once again realized sales growth with the launch of a commemorative bottle to celebrate the royal wedding and another to commemorate the Queen’s Diamond Jubilee in 2012. Further, the brand is the most popular for parent company Procter & Gamble on Facebook, with a strategy of frequent engagement on social media through nostalgia-based topics. With the right brand strategy, even newer brands can employ history and heritage to add value to their FMCG products.

3. Inspire Customer Loyalty

Customer loyalty is a driving force behind the power of a brand, particularly for FMCG brands. Customers who are loyal to your brand will buy your products every time, regardless of cost – but you’ve got to consistently give them a compelling reason for their loyalty! When you develop a loyal customer base, you enjoy not only repeat business, but coveted word-of-mouth advertising as your brand fans tell their family and friends that they’ll only use your products.

Procter & Gamble, the parent company to dozens of FMCG brands, creates customer loyalty for not only individual product lines, but the corporation’s umbrella as a whole. The company’s loyalty-driven ongoing Olympics campaign is one of the most notable and effective in the world, with a series of commercials celebrating international mothers and their everyday work in raising Olympic champions. Each of these inspiring, heartstring-tugging commercials ends with a series of brand placement images, and the campaign’s tag line: “P&G. Proud sponsor of Moms.”

4. Create Exclusivity

Many luxury brands rely on exclusivity to maintain sales and customer levels at premium price points. Creating exclusivity can also be an effective strategy for FMCG brands in two ways—by developing the perception of exclusivity for customers, and by building retailer relations for exclusive product distribution.

Image via www.kraftfoodservice.com  

FMCG brand Grey Poupon has built a brand on exclusivity. The “luxury” mustard brand has always catered to a higher end customer, creating a brand that is synonymous with discerning tastes. Early in 2014, Grey Poupon applied the exclusivity concept to social media marketing with a unique Facebook campaign that only allowed customers to “Like” their page if their application was approved and they were able to “cut the mustard.”

The ‘Like Applications’ were weighed using several factors, including education level, number of friends, and books read. Those who failed to hit the mark were offered tips to improve their standing and invited to try again.

In 2013, Duracell rose to 46% of the alkaline battery market share after developing an exclusive distribution relationship with wholesale retailer Sam’s Club, a Wal-Mart company. While the wholesale deal required a slight discount on bulk sales, Duracell was still able to maintain a higher price point than private label battery brands and realize an additional $140 million in sales.

As the competition increases between FMCG brands and private label discounters, companies must develop multi-faceted value-added branding strategies to differentiate their products, attract new customers, and earn customer loyalty at higher price points. As always, a consistent brand promise built on delivering incomparable ‘perceived’ value remains essential to long term success in the FMCG arena.

What do you think?

• Does your brand have an innovative element you can highlight in your marketing campaigns?

• How can you highlight your brand story in a way that adds value for customers?

• Are there any traditions or heritage stories you can tie to your brand to invoke nostalgia or pride?

• Who is your ideal loyal customer? How does your brand marketing strategy reach them?

• Can you develop exclusivity around your brand, either through customer perceptions or distribution and retail relationships?

Feel free to share your thoughts in the comments below. We’d love to hear from you!