As recession-hit consumers remain vigilant about their spending, marketers are rolling out value propositions aimed at luring them into shops. Most product categories, including cosmetics, skincare, food, personal care and homewares, now include value brands. However, it is open to question whether this type of offering is right for every sector.
Value brands have been available in the food sector for some time. Sainsbury's has Basics and Tesco has Value; Waitrose launched Essential while Marks & Spencer has introduced branded products into its store for the first time, a move some have suggested is intended to make its products appear better value in comparison to pricier household names. Upmarket retailer John Lewis, meanwhile, launched its Value range of homewares in September.
Value positioning has also crept into the skincare and cosmetics sector. Superdrug has unveiled its Essentials range of £1 skincare products, while Poundland has introduced cosmetics range Chit Chat, in which products are also priced at the chain's usual £1 each. Waitrose has also added skincare products to its Essential line.
Evolving terms
However, is a so-called ‘value' range always a good move? Howard Milton, founder of branding agency Smith & Milton, argues that, in marketing, the word ‘value' once indicated a product that offered something extra.
However, he believes the word is now understood by customers to represent a product lacking certain attributes. Successful value propositions, he adds, can only be offered by brands where certain features can be removed without destroying the original offering.
‘I would say that a pharmaceutical brand couldn't run a value proposition, as you don't want to buy a medical product that is perceived as having something missing,' Milton argues. This is why skincare is a difficult area in which to offer a value proposition, he says. ‘Consumers will question what the brand has lost to make it cheaper. Is it an ingredient that makes it works in the first place?'
Ian McLernon, commercial director at Parfums Christian Dior, UK and Ireland, says that retailers only create value ranges when there is a consumer need. However, he argues that you get what you pay for.
‘With skincare, cosmetics and fragrances, people like to buy into a brand and what that brand stands for,' he says. ‘For example, you buy Dior for more than just a physical product.'
McLernon adds that brands must be sure their positioning remains clear. ‘Problems arise when brands try to spread themselves across different value positions. If companies extend brands too much, they may dilute their positioning,' he says.
This was an issue faced by Procter & Gamble when it launched into the value sector with a lower-priced product under its Pampers babycare brand.
The introduction of the Simply Dry sub-brand in July this year was considered a daring move by critics, who warned that it could affect overall consumer perception of the Pampers brand. Insiders suggested it was potentially a dangerous move for Pampers, as many consumers might not realise that it was intended as a value product and would instead think the premium brand had dropped in quality.
Nir Wegrzyn, managing partner of branding agency Brandopus, says Waitrose risked a similar problem with its Essential range. ‘It has changed its core product to look like a value range, which I perceive as deadly,' he says. ‘Marketers create value products by cleverly framing a particular brand. They can either create a secondary brand, or attempt to make its primary brand look cheaper. The latter method could be a costly move.'
He cites the example of Marks & Spencer, which he claims is trying to reposition itself as a value brand.
‘It has introduced mainstream brands so consumers can judge these products against M&S ones, which are actually cheaper. However, it is a confusing message for customers.'
A value brand's sector may be less important than the method that is used to introduce it. If a clear distinction is made between a company's original and value ranges, then value products are likely to work. However, if the distinction is not made, a value proposition could cheapen the entire brand.