Marketing Expert Views Private Label as Brand Malpractice

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November 3, 2009

The practice of creating private label national brand equivalent products has been dubbed “brand malpractice” by shopper marketing expert Terri Goldstein, CEO and founder of The Goldstein Group, in an article that appeared recently in both Brand Week and Ad Week.

In the article titled “Battling Brand Malpractice,” Goldstein said: “The fact that retailers have access to the newest products and latest positioning by leading national brands enables them to steal valuable colors, shapes, symbols and keywords for the design of their own private label brands -- a phenomenon that can and should be described as "brand malpractice."

Recognizing that national brands and retailers need one another, she calls on retailers to create new and innovative store brands instead of re-creating products developed national brands.

“Rather than continuing to play favorites and practice private label thievery, retailers would do well to develop store brands that create their own experience with the consumer via unique visual triggers and brand positioning,” she wrote. “While it's easy for private label brands to capitalize on the cachet of their competitors by changing a few letters around, fully developed store brands fight fairly for the hearts and minds of consumers on the retail battlefield.”

Retailers that are rationalizing their product assortments and cutting important brands from their shelves, making way for more store brands, will regret these missteps when the economy fully recovers and customers flock back to iconic brands from “private label impostor(s). It's in their human DNA to parse quality from junk. And when that day comes, those consumer product manufacturers may resist and only do business with the retailers who treated them fairly, like Coca-Cola, Pepsi and Tide did once upon a time.”

SBD View: This marketing consultant needs to come out of the darkness and preach a more contemporary and relevant message for today’s struggling retail world. Brands that are winning – whether they are store brands or national brands – are keenly focused on creating and offering consumers more value, higher quality products and new experiences. CPG protectionism isn’t going to save brands or help retailers. What will sway consumers is product and packaging innovation, application of new technologies, right pricing and value offerings, as well as experiential and targeted marketing and promotions. The recession is forcing consumers to shop smarter, and there is no reason to expect they will go back to purchasing products that provide less for more money when times get better. At the end of the day, enlightened consumers will vote with their wallets . . . and let the best brands win.

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