With bar coded scanner cards issued to supermarket customers, electronic couponing has become possible. Not only does this approach eliminate the clipping and saving of coupons, but it automatically credits customers with any existing coupon offers at the checkout line.
Supermarket chains such as Tom Thumb and Vons are testing pilot programs using scanner cards in frequent shopper programs. Customers who join the Tom Thumb program receive points each time they shop at the stores. Club members receive newsletters alerting them to sales and store promotions, and they are eligible for discount on 125 different items each month. They receive a monthly statement showing points earned and a money voucher to be used for future grocery purchases. Their cards can also be used to authorize electronic payment for groceries through their bank.
One of the most important points of sale influences is the package, including graphics, product information contained on the package and the physical design of the package. In addition the package can be extremely instrumental in the success of store displays. Thus, it is a basic ingredient in attracting the shopper’s attention while in the store the marketer’s silent salesman.
Brand choice; National Versus Private
For a number of years now, there has been a battle between manufacturers’ national brands and distributors private brands for brand predominance in certain product categories. To the winner go greater product sales and profits. Owning strong brands allows companies to price them at a premium. But familiar national brands may be losing their punch as companies are forced by retailers to divert dollars from advertising for their products into expensive trade promotions. In addition, the decline of mass media makes it harder to hit home with a single, coherent advertising message. As national brands are being devalued, consumers are more willing to switch to cheaper products. A 1990 survey found that only 62 per cent of consumers said they buy only well known brand names, compared with 77 percent in 1975. Another study found 66 percent of respondents were trading down to lower priced brands, and almost one half were buying more store or generic brands. Consequently it is important particularly from the marketer’s viewpoint, to know whether there are any distinguishing characteristics between private and national brand customers which might make possible their effective market segmentation.
Position of private Brands:
The competitive position of private brands differs from industry to industry. In supermarket sales they account for 12.6 percent of the dollars and 15.3 per cent of the units. Taken as a single brand, private label products are either first, second, or third position in over 40 per cent of 476 different supermarket product categories. Perceived quality is one of the reasons or store brand growth. For example 55 percent of those in a recent survey agreed or strongly agreed that store brands are better than national brands in food, beverages and over the counter drugs, 47 percent agreed in cosmetics and toiletries.
Although it has been shown that consumers view private and national brands differently, it is not clearly known what consumers’ characteristics differentiate between private and national brand users. It may be that the more price conscious the consumer is, the more apt he or she to buy store brands. Thus more search is needed to determine the extent to which such buyers are different, how they can be reached, and what the best marketing approaches might be.
Generic or no name brands were pioneered by the French supermarket chain, Carrefour. These products are easily distinguishable due to their basic and plain packaging characteristics coupled with the attribute of primary emphasis on the contents of the package rather than on brand name. Early introductions were often marketed in stark white packages with bold black content labeling. This approach contrasts with private label merchandise which more closely resembles manufacturer’s brands in that a brand name is stressed in the primary labeling with secondary emphasis given to content.
Of course price is an important factor in generics success. They usually sell for 30 to 40 per cent less than major advertised brand prices, and some sell for 20 percent less than supermarket private label prices. As a result of this price difference it appears that generates gains have come more at the expense of name brands market share than the private label business.