Can a value proposition apply to every sector?

LONDON - Brands adding value lines must be careful to establish the right positioning.

As recession-hit consu­mers remain vigilant about their spending, marketers are rolling out value proposi­tions aimed at luring them into shops. Most product categories, including cosmetics, skincare, food, personal care and homewares, now include value brands. However, it is open to question whether this type of offering is right for every sector.

Value brands have been available in the food sector for some time. Sain­sbury's has Basics and Tesco has Value; Waitrose launched Essential while Marks & Spencer has introduced branded products into its store for the first time, a move some have suggested is intended to make its products appear better value in comparison to pricier household names. Upmarket retailer John Lewis, meanwhile, launched its Value range of homewares in September.

Value positioning has also crept into the skincare and cosmetics sector. Superdrug has unveiled its Essentials range of £1 skincare products, while Poundland has introduced cosmetics range Chit Chat, in which products are also priced at the chain's usual £1 each. Waitrose has also added skincare products to its Essential line.

Evolving terms

However, is a so-called ‘value' range always a good move? Howard Milton, founder of branding agency Smith & Milton, argues that, in marketing, the word ‘value' once indicated a pro­duct that offered something extra.

However, he believes the word is now understood by customers to represent a product lacking certain attributes. Successful value propo­sitions, he adds, can only be offered by brands where certain features can be removed without destroying the original offering.

‘I would say that a pharmaceutical brand couldn't run a value proposi­tion, as you don't want to buy a medical product that is perceived as having something missing,' Milton argues. This is why skincare is a difficult area in which to offer a value proposition, he says. ‘Consumers will question what the brand has lost to make it cheaper. Is it an ingredient that makes it works in the first place?'

Ian McLernon, commercial director at Parfums Christian Dior, UK and Ireland, says that retailers only create value ranges when there is a consumer need. However, he argues that you get what you pay for.

‘With skincare, cosmetics and fragrances, people like to buy into a brand and what that brand stands for,' he says. ‘For example, you buy Dior for more than just a physical product.'

McLernon adds that brands must be sure their positioning remains clear. ‘Problems arise when brands try to spread themselves across different value positions. If companies extend brands too much, they may dilute their positioning,' he says.

This was an issue faced by Procter & Gamble when it launched into the value sector with a lower-priced product under its Pampers babycare brand.

The introduction of the Simply Dry sub-brand in July this year was considered a daring move by critics, who warned that it could affect overall consumer perception of the Pampers brand. Insiders suggested it was potentially a danger­ous move for Pampers, as many consumers might not realise that it was intended as a value product and would instead think the premium brand had dropped in quality.

Nir Wegrzyn, managing partner of branding agency Brandopus, says Waitrose risked a similar problem with its Essential range. ‘It has changed its core product to look like a value range, which I perceive as deadly,' he says. ‘Marketers create value products by cleverly framing a particular brand. They can either create a secondary brand, or attempt to make its primary brand look cheaper. The latter method could be a costly move.'

He cites the example of Marks & Spencer, which he claims is trying to reposition itself as a value brand.

‘It has introduced mainstream brands so consumers can judge these products against M&S ones, which are actually cheaper. However, it is a confusing message for customers.'

A value brand's sector may be less important than the method that is used to introduce it. If a clear distinction is made between a company's original and value ranges, then value products are likely to work. However, if the distinction is not made, a value proposition could cheapen the entire brand.

 

Discussion

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

Latest

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