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Lifestyle

December 21, 2012

Couponers weigh in on 'Battle of Brands'

Last week, readers frustrated with the increasing number of low-value coupons shared their views. One said that if a coupon doesn’t make a large enough dent in the price of a national name-brand item, she doesn’t use it. She buys the retailer’s store brand instead. Will this emerging boycott of the 25-cent coupon approach encourage marketers to offer better coupon values?

There’s not much data to support the theory that low-value coupons prompt shoppers to increase their purchases of private label products, but several studies note that sales of store-brand groceries are on the rise.

With the economy still sluggish, many of us shop primarily on price. Since many store brands offer little difference in quality compared to their national name-brand counterparts, price remains king for a lot of shoppers.

Some 64 percent of shoppers regularly fill at least half of their grocery carts with store brands, according to a July 2012 study from Accenture, the New York-based management consultancy. Because shoppers have developed strategies to spot deals and buy at the best prices (and those shoppers are my kind of people!) more than half of them have a specific criteria as to when they’ll buy a national brand versus a house brand.

More than half, 51 percent, of the shoppers surveyed said that a name-brand product would have to match the price of the competing store brand in order to get them to switch. Consumer goods companies must respond to the threat of increasing competition from store brands, the study concluded.

How should brands respond to an audience that is extremely value-oriented, has cut down on impulsive buys and often is shopping solely on price? A marketer of a national brand has two options: continue offering promotions to make the prices of their products more attractive (using sales, coupons or both); or try to convince shoppers that the name brand is of better quality or is more unique than the store brand.

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