Big brands seek to lure customers back

Alisa Roth Dec 7, 2009
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Big brands seek to lure customers back

Alisa Roth Dec 7, 2009
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Kai Ryssdal: Maybe you noticed this when the economy was on the way down? That grocery stores and pharmacies really started pushing their own lower-cost store brands. A better deal, they said, than those fancy-schmancy brand names. Manufacturers went into overdrive producing them. Consumers did start buying them in bunches.

And Marketplace’s Alisa Roth explains that has created a bit of a problem for the big household goods companies. As the economy recovers, they need a way to get their business back.


ALISA ROTH: If you’ve been in a drugstore or a supermarket lately, you’ve probably noticed there are store brands for almost everything: paper towels, baby formula, laundry detergent.

Leon Nicholas is in charge of retail insight at MVI, it’s a consulting firm. He says stores have been working really hard to make those house brands just like your favorite name-brands. But cheaper.

LEON NICHOLAS: So they’re working with various suppliers of these products in order to get them to enhance the store brand.

Consumers have noticed. Over the last year or so, private-label brands have been getting a much bigger share of the market, which is why the big names — places like Procter & Gamble and Kimberly Clark — are all getting ready to introduce a slew of new products. They’re trying to get shoppers to come back to Tide and Bounty and Crest.

John Long watches the retail business at Kurt Salmon Associates, a retail consulting firm. He says big companies need to convince consumers their name-brand products offer a real premium.

JOHN LONG: They have to provide some type of benefit back to the customer in order to warrant the additional spend because customers are still being very careful with how they’re allocating their funds.

And that doesn’t just mean a new package or a new scent. Both Nicholas and Long say there will have to be some real innovations if customers are going to come back to the name brands. Procter & Gamble’s working on a new, thinner diaper. And Schick is getting ready to introduce yet another high-tech razor.

I’m Alisa Roth for Marketplace.

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