PLBUYER JANUARY 2011 The Ten Keys to Private Brand Success Guest Commentary BY PATRICK RODMELL 2PRODUCT QUALITY MANAGEMENT–THE SECOND KEY TO SUCCESS Dollar stores will expand, and other retailers will build out their store brands to compete. M The Ten Keys to y column last month management standards that are – need to review products outlined the first easy to follow and constantly regularly. If there’s a problem, Key to Private Private Brand Success: enforced. Generic statements it’s best when both parties work Brand Success – Strategic like “must match the taste of the together to resolve it.” Brand Positioning. In a 1. Strategic Brand Positioning leading national brand” don’t For private brands to truly earn nutshell, every private cut it. You need to be much a place in the hearts and minds of 2. Product Quality Management brand needs to be created more granular – and identify the consumers, the leadership at retail and managed in the context 3. Effective Pricing Strategies most relevant standards in each of a specific strategic and 4. Communication of Purchase Drivers individual category. For example, creative framework. in the food category, shoppers There’s more room 5. Process Engineering Without a framework define premium predominantly that’s set and managed, 6. Product Innovation by taste, NOT by features like in the consumer’s issues around category 7. Performance Measurement organic or natural, so putting consideration set for stretch and lifestyle sub- organics within a premium branding will inevitably 8. Associate Engagement quality brand doesn’t make sense. a few extra pennies arise. It’s always better to 9. Market like a National Brand 2. A lack of on-going integration than there is for poor think it through holistically 10. Store Execution between the marketers who and ahead of time. define the quality position quality. But the best brand for private brands and the strategy and packaging in merchants who actually buy the world can’t overcome a product matter where you are. Consistency the goods. Most product quality needs to embrace the fact that that doesn’t deliver on quality of product quality is what makes guardrails developed by marketers quality standards aren’t isolated them one of the greatest brands in are too vague (see No. 1) and if to the product; they transfer across the world. Consumers know that they are well defined, they aren’t the brand – if the cookies don’t The best brand the McDonald’s brand won’t let transitioned to the merchants meet quality expectations set by them down. effectively. Quality management is the brand, sales across the entire strategy and This premise holds true for all not an event; it’s a practice. line will suffer. Even worse, poor packaging in the brands – the more consistent the 3. Insufficient commitment of quality management of private quality, the more trust in the brand resources required to manage the brand products can erode the equity world can’t overcome – and trust is the foundation of relationship and quality delivered of the entire business. Imagine brand loyalty. This applies whether through third-party suppliers. This what would happen to McDonald’s a product that you’re a quick-serve restaurant, a is always a tough pill for retailers if the Big Mac started missing doesn’t deliver on shoe company or a retailer’s private to swallow, because it adds costs quality expectations. brand. that ultimately impact the value Think of your private brand quality expectations. Like McDonald’s, retailers need equation. But there’s more room in products as links in a chain; if one of to commit to the disciplines of the consumer’s consideration set for the links is weak, the whole thing is quality management to ensure the a few extra pennies than there is for pretty much useless. Retailers need expectations, which leads us to our success of their private brands. poor quality. to step up their game when it comes second key to private brand success: But while there’s no doubt this is The importance of the to managing product quality of Product Quality Management. In always a topic that’s high on the relationship between retailer and private brands in order to optimize my mind, nobody does this better agenda for boardroom meetings, for supplier is echoed by Denis Ring brand value. than McDonald’s. many retailers it still falls well short of Bode International. Ring co- Whether you’re in Buenos Aires in execution. If private brands want founded the 365 product line for Patrick Rodmell (firstname.lastname@example.org) or Boston, the Golden Arches of to be taken seriously by consumers, Whole Foods and has since worked is President and CEO of Watt International, McDonald’s are a trusted symbol Product Quality Management is the with retailers like H-E-B, Safeway, a Toronto-based integrated retail agency of consistent quality and meeting price of entry. Costco and Target on private brand with more than 40 years experience in expectations. At McDonald’s, Working with retailers around the product development. He puts it more than 40 countries. The company they know that managing the world, we have found that there are this way: “Academically, everyone is renowned for creating such landmark consistency of their product quality three major sources of poor quality knows that maintaining product private brands as President’s Choice, Great is fundamental to their success and management: quality is essential, but both parties Value and Safeway Select, and more than makes them a reliable choice no 1. A lack of actionable quality – the retailer and manufacturer 100 other private brands worldwide.