Ben Wise on Branding

Watching the world through the lens of the brand

Brands Need To Move Up The Post-Recssion Value Chain

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Even as the economy slowly exits the recession, consumers are still looking for better value from brands. At the Consumer Analyst Group of New York (CAGNY) conference this week, this was the sentiment from several leading consumer packaged goods companies.

In an interview, the CMO of ConAgra Foods said consumers are “still concerned about value, so the habits [they] formed during the last economic recession will stay with [them].”

During the recession, private label brands enjoyed rapid growth by being the less expensive option. Many national brands chose to chase consumers down the price spectrum, chopping their prices to provide better value. However, many of these brands now face the challenge of moving back up the chain. This is one of those tricky situations where it is easy to go down, but extremely difficult to go up.

Hope is not lost for these brands, however. It is important to remember that brand value is the tradeoff between the benefit and the cost. If a brand wants to move the cost up, they have to move the benefit up too. Brands that find innovative ways to improve their benefit in a unique and compelling way will find consumers willing to pay a higher price.

Ian Friendly of General Mills said brands must offer “good quality and innovation, so when you pick up that box of Cheerios, we make sure it’s worth every penny you paid for it.”

What do you think? Will national brands be able to regain their price premium over store brands?

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Written by benwisebranding

February 19, 2010 at 4:40 pm

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