Brands Must Continually Innovate

Tuesday, 07 June 2011 06:50
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It is increasingly challenging to be a vital branded consumer product these days. As always, brands must remain meaningfully differentiated from their national and regional competition in order to win and maintain market share. However, with dramatically enhanced quality and improved product and packaging features (often mirroring national brands), store brands are now regularly part of the consumers product "mix" when making purchase decisions. Quite simply, store brands have become highly acceptable, less costly alternatives to nationally branded options.

I am literally delighted by some store brands. (When is the last time you could say that about a store brand?) Target's Archer Farms breakfast cereals are among the best I've ever had. I brag about them to almost anyone who'll listen...and quite a few who really don't want to! Kroger's Private Selection stir-fry skillet meals are a terrific, easy-to-prepare meal option at an appealing (though not inexpensive) price.

Consider Costco's superb Kirkland brand. Costco identifies market segments in which branded goods generate strong business, and then develops a Kirkland product to rival, if not outright outdo the national offering, at a signficant discount. The product quality is typically outstanding. Costco also takes great pride in promoting their heightened price:value relationship versus national brands. In many instances, they offer larger container contents at lower cost than the national brands. Costco's clout has become so great, that they can even create custom co-branded products (e.g. Kirkland - Campbells soups).

Where does this leave national brands? I believe that more than ever, the onus is on them to continually innovate their products, demonstrate and promote their advantages to assert their relevance and to justify their pricing in consumer's minds (and pocketbooks). Telecommunications products and electronic entertainment products have been able to successfully accomplish this (e.g. Apple, Droid). P&G's Regenerist performance skin care products do as well, as does General Mills with its Romano's Macaroni Grill and Good Earth meal kits.

Which other brands have demonstrated leadership of this sort in their respective product categories? I'm interested in learning your thoughts.

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