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


Virgin, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer
Mumsnet admits users' emails and passwords accessed via Heartbleed bug
Thetrainline.com backs 'rubbish' mobile app with TV ad
Powerade launches global World Cup campaign
Subway considers taking fast food to fast lane with F1 sponsorship
Burberry's flagship Shanghai store facade responds to weather changes
Ikea splurges 'grey' Belgium with colour
Grim outlook for Tesco boss Philip Clarke ahead of expected profits fall
Thomson to create first crowd-sourced wedding decided by Facebook fans
Currency wars meets origami in Alpari FX trading ad campaign
Amazon rumoured to launch 3D smartphone in September
Facebook to allow European users to store and transfer money on site, claims report
Unilever pilots multi-brand advertising with YouTube beauty channel
Lego, Coca-Cola, Net-a-Porter, Bitcoin and AOL: the digitally creative brands