PLMA 2007: continued growth for private labels!

Reading the title of this article, many of you will think that there is nothing new under the sun, since private labels have been on the crest of the wave for some years now! Very true, but the success obtained by PL products has contributed to creating a sabbatical period in the tissue field, still under way, in order to better understand the dynamics of an extremely variable market.

Perini Journal

The tissue field has suffered in recent years from the exponential growth of PL products, above all in northern European countries, where we find greater loyalty to and a more widespread culture of retail chains. Instead, brands maintain their leading position in Mediterranean countries where branded products culture is still very strong. The policy adopted by retail chains has led to a leveling off of prices, with a conspicuous increment in product quality, thus determining a widening of the gap between brands and private labels to the detriment, in some cases, of brands, long time symbols of innovation and quality.

The branded product symbolizes and synthesizes these two features – innovation and quality – and when they are sold off, this determines the immobilization of the entire production and creative system, with a free fall of the overall image of the category.

And the situation becomes even more paradoxical if we consider that in a research conducted by Ipsos Mori and presented during the PLMA show, innovation and quality are defined as the factors for growth of PL products, too.

PROMOTED BY PLMA, this research has highlighted that today, consumers are more conscious of PL products and believe in their performance. Findings show that 50% of products purchased by the consumer are PLs. The results were obtained on a sample pool of 3080 consumers, of whom 1058 interviewed in France, 986 in Germany and 1036 in Great Britain. Sample interviews have yielded that in 59% of cases in Germany, the performance of PL products is the same as, if not superior to, brands. In Great Britain, this percentage decreases slightly to 58% while in France, this feeling is true for 40% of the interviewees. Important figures that highlight once more how brand perception is encountering a difficult moment when compared to private label products. If we add that the popularity of PL products was registered more strongly in non–food products categories, among which household care products, then we can safely state that tissue products, too, play an important role in the realm of PLs.

SURELY, DUE TO THEIR DISPOSABLE FUNCTION, PRODUCTS SUCH AS TOILET ROLLS, KITCHEN TOWELS AND TABLE NAPKINS are seen as marginal yet indispensable products at the same time. The economical offer made by retail chains together with a good quality, create the perfect purchasing conditions, to the detriment of brands. The results of the research signal an alarm but at the same time amplify the need to redesign and review the branding and innovation policy brought forth in recent years by companies working in the field of tissue. Brian Sharoff, president of PLMA, was very eloquent when, in answer to our question whether or not private labels will in the future be stronger than brands, he answered: “We must consider two aspects: on one side, we must see what consumers want, if brands satisfy their demands or if private label products do. On the other, we must bear in mind that in some cases, there are 5 or 6 brands in a given product category, and therefore we should ask ourselves if all these category brands are necessary, and if retailers have sufficient space to offer all these products. Also, if consumers purchase only some of these references, then it may not make sense to keep 5 or 6 brands of the same category on shelves. For instance, if we look at the toilet roll aisle of a supermarket, we notice a substantial concentration of products and we may ask ourselves: “How many types of toilet paper does the consumer need and what is the difference between a roll with a flower motif and one with elephants?” So, in some categories, particularly in tissue, the problem is: how many brands are there? Many. And some retailers don’t have space for all of them.”

THIS IS A STRONG CONSIDERATION THAT MUST NOT SCARE BRAND PRODUCERS but rather make them reflect on the competitive advantages that companies producing branded products have with respect to retailing. This favors greater consciousness of brand identity rather than a flattening in innovation, whether it be intrinsic in the product (quality of the raw materials, greater absorbency, etc.) or extrinsic such as décor or packaging – the latter often viewed simply as a mere wrapper rather than as a vehicle to promote and create a unique image for that brand. And indeed “The role of packaging in consumer buying behavior” was the focus of the presentation by Eric Singler during the cycle of conferences organized by PLMA. Singler, Associate Director of In Vivo European Marketing Research, highlighted the importance of packaging for the consumer, starting with the analysis of two very important aspects: understanding the consumer’s buying behavior and the buying environment.

The analysis has brought to light that the choice of a product is made on the average in about 6 seconds – a very brief time that underscores how important it is to immediately capture the buyer’s attention. The enormous offer present for every goods category causes the consumer to orient him/herself towards products already known, or towards those products more strongly capable of attracting his or her attention. Therefore it is fundamental to cater to the outside aspect of the product, offering captivating packaging that attracts the consumer’s attention maybe through the use of new materials, colors or images.

Secondly, it must convey a clear, explicit and simple message and, finally, it must convince the consumer.

Packaging becomes a further instrument to transmit a clear message, creating a unique and well recognizable image of the product. In the consumer’s mind, the image that the product delivers is immediately transformed into an emotional message capable of arousing (or not) interest towards that product, in many cases even weakening the importance of the price aspect.

INVESTING IN PRODUCT IMAGE AND CATERING TO DETAIL ALSO IN PACKAGING means increasing consumers’ loyalty towards that product, thus guaranteeing a high degree of brand recognition for the product itself. This is also true for tissue products, where the packaging can diffuse the message of an intrinsic value different from the simple message of disposable product. Of course, the “container” must be supported by quality content, otherwise the purchase will be limited to a one-time only. Packaging represents one of the instruments on which brands must continue to focus in order to protect their identity, just like the use of innovative printing or embossing technologies capable of differentiating and creating innovative, different products.

Quality, image and added value are becoming indispensable also in eastern European markets, where up until just 10 years ago, selling tissue products of superior quality with respect to those made from recycled paper was almost impossible. Today, markets such as Poland, the Czech Republic and Romania have changed and are increasingly asking for superior quality, high added value products. Therefore, starting now, even in these markets it is imperative to create a brand culture and build product loyalty, maybe focusing also on niche products that are difficult to imitate or even unique in their kind. •

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