Duplicate Or Innovate?

An acronym we have all seen and heard many times over in the private label industry is NBE, or national brand equivalent. This is typical private label jargon for the specific national brand selected by a given manufacturer or retailer as the benchmark for their own private brand offering.

If a retailer wants an aspirin offering in their private label lineup, it might select Bayer brand as the NBE. This makes good sense if the branded product being benchmarked is a formula-driven one and a product that can be closely, if not exactly, "duplicated" as an ingredient match.

When possible, because of the product type and the authorized freedom to practice around intellectual properties, duplication makes the best strategic sense in achieving the goal of delivering an NBE. The strategy resonates well with the consumer who is looking for a value-priced solution to a specific need, has no loyalty to any specific element of the product and can readily see the direct ingredient comparison to the NBE. Historically, this approach has been a strong driving force in building private brands.

One mistake retailers commonly make when developing their own brand is trying to execute an NBE duplication strategy on a product or in a category where intellectual property, patents and manufacturing limitations prevent the duplication of anything other than product performance. Oftentimes, copying form is not an option, but copying or delivering superior function is very possible. A few good examples of these types of products are disposable adult incontinence, baby diaper and feminine hygiene products. In all of these cases, there is an excellent opportunity to innovate rather than duplicate. Freed from the constraints of emulating exact design specifications, manufacturers and retailers can focus on creating products that meet or even exceed performance expectations, while also providing unique product design and feature options more conducive to real brand building.

This situation creates a brand development opportunity: You are able to pick and choose the best attributes from a range of national brand offerings within the category. I would call this the "innovative selection" process. Innovative attributes might run the gamut from custom product design and special ingredients to unique product features, innovative packaging designs or product delivery systems.

For those retailers that are committed to building their own brand franchise and equity, innovation rather than imitation is the greatest way to flatter their own corporate image. In some cases, where the opportunity exists, retailers might elect to license certain features or design elements from the national brand manufacturers to deliver a specific brand proposition. In these cases, the cost relative to the real benefits derived must be weighed carefully. At the end of the day, it's still all about the value proposition.

Another important consideration is the consumer messaging. It usually makes better sense to compare product performance or function to a wide variety of top brands within a category, rather than to specific brand names or product designs. If poorly executed, "compare to" tactics can limit your trial audience.

Try talking about "faster, safer, drier, thinner, softer or healthier" than the more expensive brands. This serves to attract a broader consumer audience with a wider variety of national brand preferences.

Consider what "Compare to Brand X" communicates to the many consumers who actually prefer "Brand Y." What surely was intended to be a positive connotation turns out to be an unintended purchase deterrent to many consumers. What the corporate brand consumer is really concerned about is is what they received, benefit-wise, for what they paid.

As our world continues to change and the restrictions from accelerated intellectual property investments tighten our ability to duplicate, the exciting opportunity has emerged to chart a more creative course of innovation in building corporate brand products and programs.

Steve Pankow is executive vice president of sales and marketing for Duluth, Ga.-based Associated Hygienic Products LLC (AHP). Contact him at [email protected].

For those retailers that are committed to building their own brand franchise and equity, innovation rather than imitation is the greatest way to flatter their own corporate image.