An ill-judged approach to brands
Date: Sat 29/09/2007
Published in: The Grocer
Author: Stuart Whitwell
Position: Joint managing director of Intangible Business
ASDA's seemingly scattergun approach to delisting brands such as Princes, Baxters Soup and I Can't Believe It's Not Butter shows a distinct lack of appreciation for brand equity and what consumers want.
To claim that Princes isn't a brand is complete nonsense. It commands a significant margin above an own-label product, consumers have heard of it, think well of it and last year we valued the brand at £95m, just £15m below John West.
Favouring local products such as Seabrook Crisps in Yorkshire, Doddington Dairy in Newcastle and Cumbrian sausages in Cumbria is encouraging but runs contradictory to delisting Baxters Soup in Scotland - a leading Scottish brand. All this simply confirms the scattergun and ill-judged approach.
Limiting consumer choice may deliver short-term wins through the ‘damned good price' Andy Bond gets for exclusivity but the longer term repercussions could be damaging. Of course ASDA can stock what it likes but if consumers do not see leading brands on the shelves they will go elsewhere to find them. Also, eliminating Princes would give John West a virtual monopoly and the power to push prices back up.
Rationalising the number of brands in more commoditised sectors such as water, milk or organic products is no bad thing. And pressurising brands to create stronger points of difference is also positive. But what Andy Bond needs to realise is the brands he is removing, although not market leaders, are still brands with equity, heritage, value and a loyal following. Removing these brands will remove customers.







