pohmer on marketing
Last year, I authored a series in GPN on branding. These articles included the goals and expectations, the development process and the support needed to create and maintain brands. Brand image can be a tremendous asset in a sustained marketing initiative, but I’m beginning to see some issues and concerns arising in the marketplace, especially in common brand usage and application in multiple retail trade channels.
All companies, whether they are public or private, have stakeholders and shareholders. Shareholders are those people that have financial expectations for profits primarily owners and those that have invested monies with the goal of increased monetary valuation and financial growth. Stakeholders are your employees, suppliers, trade partners, Á customers and consumers. The demise of several publicly traded floriculture companies in the past few years (e.g., USA Floral Products and Gerald Stevens) should be proof that you absolutely cannot satisfy the needs and expectations of your shareholders if you do not first satisfy the needs of your stakeholders. Applying this same shareholder vs. stakeholder premise to the branding process, the primary beneficiary of a brand must be your customer and consumer (your stakeholders) even though your company (the shareholder) also expects to gain from the development of brand loyalty.
With the continuing growth of the home improvement and discount mass marketers, competitive polarization between the mass merchandisers and the independent garden centers is evolving on a greater scale than ever before. And, as we’ve discussed in previous GPN articles, the quest for increased differentiation, especially on the part of the independent garden center operator, has become a primary focus. This differentiation can be in services offered, professional staffing and education, merchandising and display, product and assortment or brands.
A Branding Faux Pas
The needs, expectations and goals of the independent garden center are generally different than those of the mass merchant, though some may be shared. Yes, in fact, there are some products or brands that can meet the needs of both retail channels equally well; however, the majority of those suppliers that try to serve both markets with the same programs most often result in compromises that do not fully satisfy the needs of either.
Here’s an example of the scope of the problem. I recently heard a story about an independent garden center that purchased perennials from a premier grower in the southeast; that premier grower was also a major supplier to a well-known home improvement chain in the same market. Despite the fact that the grower had a name and brand well known to the consumer, the independent garden center cut the supplier’s name identification off of every tag on every plant he received from this grower. His rationale for going through this exercise (a waste of time, payroll and effort on his part and a waste of the grower’s marketing investment) was that: 1) he didn’t want to have to compete on price if the consumer cross-shopped both retail venues and saw the same branded product and 2) he felt that he maintained and merchandised his product far better than the HI chain and, if the consumer saw the same branded product in both locations, the image of his garden center would be cheapened or diminished. I’m not necessarily saying that I agree with his rationale, but I can understand where he’s coming from.
Make a Decision
Some producers, such as International Garden Products (IGP) and Monrovia, have recognized this dilemma and made a considered decision to focus their marketing efforts solely on independent garden centers, thus avoiding this retail channel competition problem. For the grower, this provides a higher sense of loyalty from the independent market channel and permits them to focus all of their energies on meeting their specific needs, though it does require an additional investment in sales force and operational costs to deliver smaller orders. For the independent garden center operator, this channel exclusivity ensures that they won’t be forced into direct brand price competition with the mass market.
Other producers have attempted to solve this issue by maintaining channel specific brands. Though the same plants may be shipped to both retail channels, they have separate and unique brands reserved for independents and mass marketers. This alternative provides most of the benefits of the channel specific focus noted above, allows for servicing both retail channels without price competition, but requires duplicate efforts and investment to develop both brands effectively.
A third supplier option is not to brand identify any of your product, forcing the retailer to market the product. While this allows the grower to serve multiple channels with the same product, it makes it more difficult to compete against those producers who have effective brand programs. It also transfers the marketing effort for the product to the retailer, something the retailer may not be able to execute as effectively or efficiently as the producer.
And the final option is to continue as most growers are currently positioned developing a single brand that tries to service the needs of both the independent and mass market retailers. It may not be the ideal, but it is cost effective, if you’re willing to deal with the issues this approach may create.
So what’s the best option? For independent retailers, it’s whichever best satisfies the needs and expectations of your operation and, most importantly, those of your end consumer. For producers, it’s whatever meets the needs of your chosen retail channel partners. The only thing certain is that one size just doesn’t fit all anymore!