Helen Edwards: Real value can come at a higher price

Helen Edwards: discusses value at a premium
Helen Edwards: discusses value at a premium

We often assume "value" means "cheap", but brands such as Waitrose prosper by offering compelling value at a premium price.

When the economy gets tough and money gets tight, you expect to see the growth of value brands.

A recent survey from Kantar Worldpanel seems to confirm just that.

In its headline sector, grocery retail, it shows that the deep discounters, Aldi and Lidl, have enjoyed year-on-year sales growth of 9%, easily outperforming Tesco and Sainsbury's.

Not so fast with your conclusions, though. The same survey, in the same sector, through the same recession, shows that the other high-growth brand is Waitrose – up 8%. What's going on?

With similar findings in other sectors, Kantar's own interpretation is that Britain is polarising into two nations – with some people driven toward value, while others remain prosperous enough to prioritise quality.

I will venture a simpler explanation: Aldi, Lidl and Waitrose are all value brands.

You merely need to keep in mind the broadest definition of value, and not conflate it with "cheap".

For Aldi and Lidl, the centre of gravity is price, which they balance with acceptable ranges, standards and brand associations.

Waitrose has come at value the other way, raising expectations in freshness, range-editing and service, giving emotional reward, and balancing it with a well-judged price premium over mainstream competitors.

The recession is still the impetus for the shift toward these value brands, but in a more nuanced way than the normal interpretation allows.

When family budgets pinch, people start consciously to examine their purchasing behaviour, perhaps for the first time in years.

In a kind of informal brand audit, the question that gets asked is 'What is this brand doing in my life?' The realisation dawns that many are found wanting.

The real polarity at work today is not between one type of consumer and another, but between two main types of brand: value brands and habit brands.

Value brands prosper at all times but really motor when the economy gets tough because they not only survive the consumer audit, but attract share from others that didn't make the cut.

Habit brands are those that offered something of value once, and stayed in the repertoire even as they became complacent.

Somehow we failed to notice their lack of innovation, their reduction of care, their convergent tendencies, their price-creep. Inertia kept the threads of loyalty intact.

Recession breaks those threads. Habit brands are vulnerable the moment the audit starts. Category is no protection – from personal hygiene to business systems, habit brands will be junked with a ruthless abruptness, as people pursue value in its widest sense, with their eyes suddenly wide open.

So next time you're in a brainstorm and someone says, "We need to create a value brand", stop and think what this really means.

It could mean that you strip a product or service to its essentials, be brilliant at the basics people need, build emotional engagement with a lean budget, and trade at a discount to your competitors. A value brand like Simple, Acer, Premier Inn, JetBlue or Lidl.

Or it could mean something different: that you stay ahead of consumer desires, innovate stunning new products and services, generate irresistible emotional appeal and risk a price premium. A value brand like Apple, Audi, Innocent, Emirates – and Waitrose.

Helen Edwards has a PhD in marketing, an MBA from London Business School and is a partner at Passionbrand

30 seconds on: Kantar

  • Founded in 1993, Kantar is WPP's global insight, information and consultancy division. It includes Millward Brown, TNS, Added Value and Kantar Media as well as Kantar Worldpanel, which is the world's leading supplier of syndicated consumer panel data.
  • The Kantar slogan is "A measure of inspiration", underpinning its audacious claim to transform data into insights which in turn inspire clients.
  • The business is run by the quietly charismatic Eric Salama, previously Martin Sorrell's right-hand man and head of strategy for WPP. Now in charge of more than 25,000 people, it's nice to see he still finds time to regularly tweet about Arsenal's variable performances.
  • Unusually for a research company, Kantar has a creative director, Aziz Cami, previously a founder of design company The Partners. At Kantar, his role is to help the group companies better visualise their data and find more compelling ways to "deliver insights". If he can pull that off in the PowerPoint hell that is a standard research debrief, he deserves another Cannes Lion to add to the one he got for the Kantar logo.


Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now


Lynx tells men not to leave love to fate
HBO captures awkwardness of watching sex scenes with parents
Primark to open first US stores with Boston chosen as flagship location
Marketing spend on the up but a reality check is needed before celebrating
Top 10 ads of the week: Jackpotjoy and BT Broadband fend off Kevin Bacon
Lidl beats Tesco to 10m Facebook fans
Center Parcs ad banned for encouraging parents to take kids out of school
Coca-Cola, Cadbury and Amazon named top brands for targeting youth market
Leaked document shows Nokia to be rebranded as Microsoft Mobile
Nike lays-off hardware staff in move that casts doubt on future of FuelBand
Greenpeace says save the bees or humans will die
What brands need to know about changes to VAT and online downloads in 2015
Jimmy Savile victims urged to claim compensation in new ad campaign
UKIP launches biggest  ad campaign and stirs up 'racist' accusations
Apple boss Tim Cook provides voiceover on ad touting firm's renewed green commitments
John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message