Saturday 15 September 2012

Beyond Own Brand

As we perused the soup section of my local Tesco recently, it was obvious to my friend and I that Tesco were pushing their own brand soup (Tesco Everyday Value). A lot of shelf space close to other cheap soups was dedicated to it. However, the vast majority of the soup category was taken up by Heinz - a brand known mainly for its quality rather than price. It would appear that Tesco was not directly competing with Heinz, especially as Tesco Everyday Value soup was not placed directly next to the Heinz soups.

We were wrong.

Upon closer inspection (and a little light research) we discovered that Crosse & Blackwell, a high end brand placed next to Heinz, is owned by Tesco.

So what?

Tesco is clearly wanting to gain market share in the world of quality soup (who wouldn't?). However, they've realised that consumers see Tesco Everyday Value as an inferior option to brands like Heinz. If you wanted a really nice soup, you would look at Heinz, Campells or Baxters. Not Tesco Everyday Value.

People are very good at creating rules of thumb; seeing Tesco on the packaging usually means low price, not high quality. Thus when we quickly (and we're always in a rush) scan shelf after shelf of similar looking soups, we narrow down the options using rules of thumb. (This isn't a criticism of consumer behaviour; rules of thumb are necessary to survive in this complicated world.) We quickly rule out Tesco own brand soup as inferior (correctly or not).

So what do Tesco do?

They create (or buy) a brand that consumers will not immediately write off as low quality. Crosse & Blackwell are the method Tesco are using to squeeze market share out of Heinz. Instead of fighting the rule of thumb and re-branding Tesco Everyday Value, they simply create a new brand. Simples.

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