The rules of the growth of value brands

The rules of value

To win in the value segment, brands need to think differently and be ready to reconsider the rules of branding and business to service new needs.

Value doesn’t mean cheap products or services.

Consumers seeking value brands are no less demanding or discerning than those buying premium brands. In fact, value-seeking consumers often look for reassurance of quality, as they are more cognisant of the loss from products that fail to deliver. Successful value brands understand that trust is a foundation of brand-building, and use a range of smart tools to reinforce a trusted quality product.

Value offers “more” of what counts

Value is derived from the equation between benefits and pricing, and value brands that win offer “more” — more of the benefits that matter, more impact per rand spent.

Spekko rice is known as the “1 cup 4 cups” rice, promising four cups of cooked rice for every one cup of uncooked rice, a clear value message that offers more tummy-fill to smart shoppers. But it’s by amplifying its four-cups message into a promise of “more love” that Spekko really drives value home, reminding moms that their cooking is about more than just feeding the family.

City Lodge supports its value brand, Road Lodge, with the playful campaign promising “We use our 1 star for what counts”, focusing on more of the benefits that matter without paying for added frills.

Value doesn’t follow the category rules

Joburg BeerValue brands derive savings in production, distribution and sales by challenging the norms operating in the category mainstream.

Sorghum beer offers value consumers a beer that’s more affordable than their usual brown bottle by stripping the alcohol category to its essential components — basic packaging, widespread direct distribution, and a tasty product. Joburg Beer is prolific on the streets of Soweto, flouting the rules of an alcohol category conventionally governed by brand image and extrinsic benefits with unshowy, functional 1l packs and completely informal distribution.

Outsurance introduced value to insurance by challenging the established indirect sales model and offering consumers cash back with the Outbonus, a radical departure from longstanding category rules.

Value brands understand the informal trade

Drink-O-Pop, a powdered soft drink concentrate, may not be front and centre in the drinks aisle of your local Pick n Pay, but is the branded market leader in the powdered soft drinks category. Distributed in spaza shops across SA, a 5g sachet retails at less than R1 and is mixed to make more than 2l of soft drink. As with Jive and Take5 juice sachets, these brand custodians understand the importance of grass-roots distribution to bring their brands to street corners where their consumers live and shop, making affordable refreshment available where it counts, and challenging giants such as Coca-Cola for their share of value consumers’ consumption.

Lessons for marketers

For most marketers, designing brands to win in the value segment doesn’t come naturally. The consumer is not intuitively understood from the safety of marketing desks, and the rules of branding that drive winning solutions in the rest of the market may be more hindrance than help. But, for marketers seeking new opportunities to win with value:

  • Start by understanding your consumer’s needs and life up close. Speak to consumers earning less than R5000 a month, in their world, in their language. Ethnography offers a powerful way to meet consumers in their real lives, understand their needs, and their strategies to derive value from the products and services they use every day. Getting to grips with real needs offers fuel for customised strategies to unlock new growth.
  • Deliver simple benefits with impact. Value brands are built on focus — simple, singular benefits delivered with clarity and backed up by a quality product that delivers just on that central benefit. From the production line to packaging, this challenges marketers to get the basics right and trim costs without losing quality where it counts.
  • Reconsider the rules. Really assess which assumptions and norms of the category in which you operate are holding you back from achieving better value. Reinvention of packaging, product, distribution and cost models may all be needed to win in the value segment.

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