Ads, performance key in brand preference - at discount stores - Top Brands, Part 1: Store Manager Survey

Discount Store News, Oct 16, 1989

Ads, Performance Key in Brand Preference

Advertising, brand recognition and product performance are the three key ingredients to the success of a brand name item at retail, according to responses from store managers polled for DSN's current Top Brands Survey.

Price, the No. 4 consideration, is waning dramatically in importance when it comes to the performance of top name brands, according to store managers.

Apparently, the quality of a product, coupled with a strong advertising program that fosters brand recognition, is more valuable at retail than at price alone.

These are interesting findings considering that the discount store industry depends upon quality, name brand goods at the right price. It also shows that discounters are becoming more successful at changing customer perception that they are sources of low quality, cheap goods.

This year, fewer managers named price as an attribute of a product's performance than they did last year. In fact, just one-fifth of the managers surveyed said that price is an attribute of their best performing brands, down from one-fourth of managers a year ago.

It is important to note, that however much price declined as an attribute of a product's performance, it is still a big consideration. And price is still judged to be a more important factor than variety, promotions, product presentation, sales and product features.

Advertising, by the vendor or retailer, remains the No. 1 reason a particular brand sells well at retail.

It may even begin sharing its top position with brand recognition, actually one of its by-products.

In fact, advertising is an even greater influence over the performance of a product than it was a year ago.

On the current Top Brands Survey, store managers said advertising is the most dominant reason a brand meets with retail success for 10 of the 17 product categories polled.

Last year, store managers said advertising was the reason for the success of nine brands.

Brand recognition was cited as the No. 1 reason for the success of nine products, up from five a year ago.

Product performance was mentioned as the main attribute of eight product categories that performed well at retail, up from two last year.

Price was the main factor for just one product category this year - stationery - and even that was not a clear victory. Advertising, brand recognition and price tied as the reasons stationery brands are successful.

Overall, more than one-third of all store managers surveyed attributed the success of all their top performing brands to advertising, slightly more than in 1988.

Brand recognition, the No. 2 attribute, was mentioned slightly less often than advertising. It, too, recorded a small rise from last year.

Product performance, in third place, was mentioned as an attribute of top brands by a little more than one-fourth of the managers polled, down slightly from last year.

Regardless of the overall characteristics of a best performing brand, the success of each product category produced widely varying results.

For example, advertising was mentioned by half the store managers for the success of branded goods in health & beauty aids, the highest mention rate for any product category.

Product performance was the No. 1 reason hardware items sell well at retail, the highest response rate for this brand attribute.

Brand recognition was cited as the main attribute for domestics and men's apparel.

In addition to stationery price was the biggest factor in determining top performing brands in men's apparel.

PHOTO : Brand recognition, product performance and advertising are equal components to brand success in the three apparel categories with brand recognition having a slight edge over the other two.

PHOTO : Advertising is the key attribute to the success of hard lines brands. Product performance is second and brand recognition is third. Advertising is particularly important in health & beauty aids, household cleaners and photo and camera. [Tabular data omitted]