Saturday, 21 March 2009

Beanz Meanz Markz (& Spencer)?

The famous slogan "Beanz Meanz Heinz", coined originally in 1967 tells it like it is – if you want beans then you want Heinz beans – there is no other choice. It's a simple slogan and was apparently written over two pints of beer in the pub - which does make you wonder what the purpose of the office is when problems like this, world peace and the current financial crisis are so easily solved over a beer or two.

Lasting for almost 30 years until it was dropped in the 90's when Heinz wanted the brand to be associated with more than just beans – it was revived again this year. With over 63% of the baked beans market and the nearest branded rival having less than 10%, the memorable campaign seems to have helped Heinz maintain its brand leadership. What's more interesting is that even though competitor Branston claimed that in blind taste tests 76% of consumers preferred their beans to the Heinz variety –Heinz have still managed to increase their market share 9.6% year on year.

The reason for this I suspect is that brands provide reassurance to consumers and actually make life easier with instantly recognisable products. This means consumers can almost shop on autopilot from category to category - the brands essentially providing sign-posting around the store. It may not be so much that they are "better" beans – just that they are what the majority of people "recognise" as beans. It's obviously no coincidence that many own label products have a look and feel very similar to the brand leader – hoping to cash in on that moment of confusion.

It reminds me of the last time I strolled into a supermarket while abroad and looked around slightly bewildered at the strange array of goods – shelves stacked with local brands and not a pack of "real" bacon in sight or a decent loaf of bread - either too small (French), too sweet (US) or too hard (German). Strangely, this is not unlike the feeling I get whenever I enter a Marks and Spencer and finally it looks like M&S have realised this too.

Sure, they have a loyal customer base who loves M&S food and their own brand products, but for many customers, especially new or occasional ones, not having branded goods reduces their opportunity to maximise share of wallet. Indeed, it can provide opportunities for competitors to talk to M&S customers as they shop elsewhere to pick-up the brands they want but cannot purchase at M&S. Even M&S Chairman Stuart Rose admits that he has to shop in rival store Sainsbury's to purchase products he can't get in store.

The irony of all of this is that it's happening at a time when M&S competitors are extending their own label lines as consumers look to trade down from brands to more cost effective alternatives. Supermarkets like Sainsbury's and Tesco have both aired major advertising campaigns showing the savings customers can get by switching to own label products – and trying to reassure them its just "different", not lower quality.

So whilst brands will continue to form a large part of consumers shopping baskets, the supermarkets are changing their offering to stop customers from feeling the need to go to cheaper alternatives – or in the case of M&S - to stop them going elsewhere and seeing alternatives.

This really does show the power that brands have, if M&S feels a need to break a long tradition to start stocking them and other retailers feel the need to spend vast amounts challenging them.

It also shows however that to successfully acquire and retain customers you need to provide the products and services they want and more importantly, you need to keep adjusting these in reaction to changing customer needs.

Even where you have the brand strength there is no resting on your laurels – Heinz reported changed it's recipe following competition from Branston – increasing its tomato content from 27% to 33% in response to Branston's well publicised (and apparently more tasty) tomato content of 30%.

Personally I think the M&S decision is a good move - it allows people to feel the comfort and reassurance that the recognition of branded goods provides, whilst opening up their undisputable quality food to a wider audience.

However, it will take more than a jar of Marmite or a bottle of Coke to get me into M&S – having the right product is just part of the equation. Whilst they are located in the town centre and have higher (perceived?) prices I'm afraid I'll be buying my Heinz Beanz from Tesco.

M&S Simply Food at my local BP however – that's an altogether different equation – as are the M&S profiteroles!

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