Cheap Housebrand or guarantors of quality

confused consumer

Consumers make purchase choices for a whole range of reasons, quality, size, experience, brand, price, freshness, produce provenance, and so on.

Supermarkets in Europe have for years been marketing their housebrands as much more than cheapo versions of branded products, they are brands themselves, with all the attributes of proprietary brands.

In Australia there have been housebrands for 35 years, I know, as I peripherally s involved in the launch of the first one, the now defunct  Franklins “No Frills” margarine, in about 1978. For most of the 35 years since, Australian Housebrands were little more than cheap products, where the manufactures pulled out as much ingredient and packaging cost  as possible, apart from the few regulated categories like milk where Housebrands did not appear until de-regulation of the distribution system, and ice cream where the dairy fat level is proscribed at 10%.

More recently, Housebrands have been repositioned to be more like “Brands” than cheap substitutes, and retailers are actively seeking to add product quality to the parameters, while still being extremely aggressive about product cost from the manufacturer, difference now is that the world is the potential source, not just Australian manufacturers.

However, the  efforts appear to be flagging, as price remains the primary consumer purchase reason for Housebrands, but the consumers choice is being reduced as retailers allocate their shelf-space to their own brands in an effort to both build Housebrand sales and the enhanced margins they can deliver. Perhaps this is a contributor to the apparent renewed growth of specialty and niche retail, and the decision of many SME’s to avoid the two major retailers, and pursue alternative channels.

Housebrands are failing to be either guarantors of quality, as  “proper” proprietary brands would be, and they are often no longer as cheap as they were, so consumers are getting confused.

In consumer confusion lies  opportunity for innovative marketers.


About strategyaudit

StrategyAudit is a boutique strategy and marketing consultancy concentrating on the challenges of the medium sized manufacturing businesses that make up the backbone of our economy. The particular focus is on their strategic and marketing development. as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
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