Growing taste for house brands
Supermarket house brands are shedding their image of being low quality and inferior. The sales of items from house brands have risen over the years and supermarkets are now expanding the variety and adding premium products such as abalone and organic food. Ina study done by market research firm Nielsen, nearly three in Five consumers in Singapore today consider house brands as good alternatives to other name brands.Only about one in two felt this ways in 2010.More also feel the quality of house-brand goods to be on a par with name-brand products. A spokesman for Dairy Farm Singapore, which operates Cold Storage and Giant, said:"Consumers are now more receptive towards house brands as they can have greater savings without compromising on product quality.House-brand items are generally about 20% cheaper than other labels, as supermarket chains are able to cut down on intermediary and advertising costs. Most supermarket chains run a few house brands and private labels.For instance, Fairprice has two brands called FairPrice Gold as well as several private labels, including Pasar and Budget.Its fresh produce and frozen meat categories are popular and make up more than 70% of sales of house brands and private labels. Over the years, premium products and better quality staples have also been introduced under the house brand.This was in response to consumers' buying habits and needs, said a Giant spokesman.Sheng Siong started selling abalone under its Happy Family label several years ago and Fair Price launched a Pasar Organic Label 2008.Cold storage has two house brands, Savour and Gourmet, which offer higher-quality products than its Essential label. Demand for house brands has also gone up at health and beauty stores.Guardian has seen sales of its house-brand items grow between 5 and 7 % in the last two years.At Watsons, sales have doubled for its house-brand baby product range compared with last year.
question:-
a) Based on your understanding of the case, discuss the most appropriate pricing method that supermarkets have used to price their house brand's products.
b) NTUC Fairprice would like to generate greater awareness and sales of its Fairprice Gold house brand.Taking into consideration the business model of keeping costs low for house brands, propose three possible types of marketing communications tools that NTUC Fairprice should use to reach out to consumers.Give relevant examples to support your choices.
c) Discuss two aspects of consumer post purchase behavior that are likely to result in greater sales volume and brand loyalty for a supermarket house brand.