Currents:Book Review: A Post-Brand World?Manufacturer vs. Private-Label Brandsin an Era of Sustainability GILL IAN RICE

Grant, John. The Green Marketing Manifesto.Wiley, 2008. 320 pp.ISBN: 978-0470723241 (hardcover) $29.95.

Lincoln, Keith, and Thomassen, Lars. Private Label:Turning the Retail Brand Threat Into Your BiggestOpportunity. Kogan Page, 2008. 297 pp.ISBN: 978-0749450274 (hardcover) $39.95.

Industry observers and competitors are closelywatching U.K.-based Tesco’s new Fresh & Easystores in California, Nevada, and Arizona. Accord-ing to press reports, consumers seem either to love orhate the new concept. My trip to one of the smaller-than-normal grocery stores revealed a plain, sim-ple, and rather bare store environment. Because theshelves are lower than the typical large supermarket,I could see easily across the store. There is plenty ofnatural light from the tall windows. The fresh pro-duce is all packaged and stamped with expirationdates. A few aisles contain prepackaged ready-to-go meals. There is an assistant to open packages,even cook, and permit customers to try out anyof the foods in the store. Most products are pri-vate label–branded “Fresh & Easy,” although thestores also carry leading brands in a limited rangeof cereals, canned goods, and so on. All checkoutsare self-service, although an assistant is present. Thecheckout process was smooth—no glitches and nowaiting. Direct mail sent prior to the first one open-ing informed me that the stores would be run inan environmentally friendly way, using 30 percentless energy than typical grocery stores and placing a

priority on recycling. In addition, only natural prod-ucts (no added preservatives or artificial colors, forexample) would be stocked. Local news reports inmy city about Fresh & Easy, however, focused al-most entirely on the protests by unions over Tesco’snonunion position. Fresh & Easy is a concept thatis very noticeably different from Whole Foods (afull-service supermarket, with surprisingly good em-ployee conditions and benefits, that sells many or-ganic products), Trader Joe’s (a similar-size storeto Fresh & Easy but that sells private-label brandsonly), supermarkets like Safeway, superstores likeWal-Mart, and warehouse clubs like Costco.

A USA Today report in April 2008 suggests thatTesco’s innovative store concept might not be meet-ing performance objectives, as Tesco’s managementhas placed a three-month hold on the opening offurther new stores. The store features appear to beunusual in combination for Americans, and despiteextensive research prior to market entry, Tesco didmake mistakes such as not selling milk in gallons.Tesco is well known for its successful adaptation toconsumer needs in foreign markets, and some ob-servers believe that in the longer run, Tesco will pre-vail. Noteworthy is Wal-Mart’s plan to open fourstores in the Phoenix metropolitan area in 2008to test its Fresh & Easy copycat version namedMarketside.

Rivals Tesco and Wal-Mart both have strongprivate-label brands. According to Keith Lincolnand Lars Thomassen in their book, Private Label:

c© 2008 Wiley Per iodicals , Inc .Publ ished onl ine in Wi ley InterScience (www.interscience.wi ley .com)

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Turning the Retail Brand Threat Into Your BiggestOpportunity, sales of Wal-Mart’s private-labelbrand are 50 percent larger than the total brandportfolio of any single manufacturing company(for example Proctor & Gamble, Nestle, Unilever).Tesco’s private-label sales are larger than Coca-Cola’s global sales. The major premise of Lincolnand Thomassen is that brands are usually obsessedwith fighting the nearest branded competitor andmight be unduly neglecting the private-label brand,which is arguably stronger and is even controlledby the manufacturer brand’s distribution channel.Over the last ten years, global sales of private la-bel or retail brands have grown at a rate at leasttwice that of the famous consumer packaged goodsbrands, although there are regional differences: Eu-rope leads in terms of private-label sales, with NorthAmerica following closely. Latin America has a farless developed private-label market than the rest ofthe world. The Fresh & Easy brand is Tesco’s newprivate label for the U.S. market and is illustrativeof a trend that cannot be ignored by manufacturerbrand managers.

For Tesco, the question is whether or not the Fresh& Easy brand can gain consumer trust. Trust isthe very essence of a brand. The trust gap betweenprivate-label and manufacturer brands is gettingsmaller, and trust overall for many brands is di-minishing. The obsessive commitment from retail-ers toward consumer service, convenience, and—increasingly—community and sustainability issuesmeans that the trust gap will continue to nar-row unless manufacturer brands react. Lincoln andThomassen argue that brand loyalty is continuing toswing over to the retailer, and the role of the man-ufacturer brand is changing. Supermarket shoppersdon’t buy brands so much anymore; they buy solu-tions. In this context, consumers need both private-label and manufacturer brands only as long as theyprovide value, quality, choice, convenience, and in-novation. In The Green Marketing Manifesto, JohnGrant writes that the erosion of brand trust is occur-ring in an environment of growing consumer liter-

acy, marketing resistance, and cynicism. It is wellknown that the most cynical are Generations Xand Y.

In Grant’s view, the erosion of brand trust can onlybe overcome by a “green marketing approach.” Hepoints out that his book was stimulated by con-cerns over climate change but emphasizes that theuse of the word “green” should not be limited towhat have traditionally been viewed as green issues.Rather, he focuses on sustainability in its broadestsense and uses “green” as a shorthand term for theoverall sustainability concept. In 1989, in the lastround of “green marketing,” Grant observes, therewas a rush to exploit green agendas for commercialends. Today, the World Wildlife Fund supports theview that in the United States, people have a 5.3planet lifestyle, and in the United Kingdom, peo-ple have a 3 planet lifestyle, which means that 5.3planets would be needed to support the current U.S.lifestyle and 3 would be needed for U.K. inhabitants.Because of this situation, total innovation is neededin business models. Comparing today’s situation towhat happened in the late 1980s and early 1990s,Grant writes: “Green marketing is mostly aboutmaking (breakthrough) green stuff seem normal—and not about making normal stuff seem green.”Also, he stresses that green marketing means “do-ing green” and at most factually announcing green,but is seldom about “looking green.” Grant re-lates a consulting experience he had working forIKEA, a global retail brand. The project concernedhow best to communicate IKEA’s environmentaland ethical commitments. For 12 years, IKEA hadworked to improve and in many areas were not onlymeeting but exceeding any standards in the world:from forestry to transport to the way they workedwith partner factories and influenced their opera-tions. Yet, Grant’s advice, as far as external com-munications were concerned, was: “Don’t!” IKEAagreed and instead focused on an internal commu-nications program. IKEA didn’t need posters to tellpeople it was a company that could be trusted todo the right thing. Not only could nongovernmental

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organizations (NGOs) and other interested partiesview all of its information if they wanted, but anumber of the NGOs that had worked with IKEAto develop its programs used them as case studiesto show other businesses what could be done. InLandor’s 2007 survey of green brands, IKEA wasrated as the seventh-greenest brand in the UnitedStates, ahead of GE (number nine), who spent $90million on advertising proclaiming their newfoundcommitment to “Ecomagination.”

Companies with good values are usually easy to spotbecause these values permeate their operations. Theydon’t need advertisements. BP’s Beyond Petroleumcampaign backfired and became a focus of criticism,not support. Grant explains how BP took a complexsustainability program and “consumerized” it intoa branded green message that it put into advertise-ments. The goal was to communicate that, while theoil business has a negative reputation, there are dif-ferent kinds of oil companies. Unfortunately, the ad-vertising lost this in translation. The company hada reasonably good story but spoiled it by makinga simplistic green advertising slogan. Marketing al-ways focuses on the best features of a company or aproduct, but when claiming a special virtue, it mustapply to all the company’s operations, not just thosehighlighted by marketing.

The key underlying concept throughout Grant’sbook is authenticity. Brand meaning is made by peo-ple and not by advertisements, and so brand narra-tives must be authentic. Only when this happenscan trust between people and the brand be built.Marketer-led advertising campaigns are becomingless and less effective in getting the attention ofthese consumers. Grant calls for “active customerengagement” instead, which he sees as part of thecreative renaissance in brand building through alter-native means (other than advertising). Lincoln andThomassen contend that participation is the wayfor manufacturer brands to compete with private-label brands. Their new take on ROI is “Return onInvolvement.” Grant calls it “sharing enthusiasm”

and outlines three essential features of this idea: (1) abigger, clearly separate from “just buy my brand;”(2) ways the audience can contribute and participate;and (3) a bigger outcome, the commercial results be-ing a by-product of this. An example is Nike’s “RunLondon,” an annual 10k race in central London,which satisfies the three features as follows: (1) therace is a big challenge in terms of preparation andthe sense of achievement; (2) the audience membersare the performers or athletes in the event and theirpledges are used in public advertising; and (3) about35,000 people take part each year, which is a bigboost to the fitness culture in London. Importantly,research showed many bought new sneakers, andmany of these “felt obliged” to buy Nikes.

Private Label is based on the results of a study con-ducted by Saatchi & Saatchi’s global retailer andshopper marketing agency, Saatchi & Saatchi X.This study combined qualitative and quantitative re-search, using online surveys and personal interviewsin four countries: the United States, the United King-dom, China, and Sweden. An appendix includes thequestionnaire. Perspectives from shoppers, retailers,and brand owners are included.

Although half of the U.S. and U.K. manufacturerrespondents in the study claimed that profitabilitywas not damaged by private-label brands, Lincolnand Thomassen postulate that evidence indicates theopposite. There is considerable pressure on the man-ufacturer brands’ share positions. In Germany, from1999–2005, private-label brands gained 50 percent-age share points while brand leaders lost 8 percentshare, number-two brands lost 15 percent, and otherbrands lost 30 percent share. How can manufactur-ers counter the challenge of private label brands?Lincoln and Thomassen have many suggestions in aseries of “action” chapters. Each chapter has work-shop exercises that can be completed by a team ofexecutives charged with developing ideas and strate-gies. Key to branding success is understanding thatthe role of branding is changing. Brands need to ed-ucate consumers. One example is Pepsi’s Smart Spot

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program. Recognizing that Americans were becom-ing increasingly concerned with health and wellness,PepsiCo began adding instructive information onthe benefits of nutritious foods. The program helpedconsumers choose healthier products but subtly pro-moted PepsiCo-produced foods and beverages thatmet certain nutritional guidelines. More than 250PepsiCo products display a green Smart Spot stampthat shows that they contain at least 10 percent ofthe recommended daily value of a targeted nutrient;have specific health and wellness benefits; containlimited amounts of fat, sodium, or sugar; or includehealthier ingredients such as whole grains.

Brands are value-centric and must be inspirationalin a socially responsible way. Therefore, Lincolnand Thomassen suggest that loyalty to brands isevolving. In the past, brand loyalty meant brandrepurchase as a result of product satisfaction. To-day, loyalty is given to brands that help a consumerthrough the shopping experience in an efficient way;store cards play an important role. Tomorrow, loy-alty will be awarded to brands that do the rightthings for both the consumer and society. In 2008,as a trial of a plan to introduce carbon footprintlabels on all 70,000 products it sells, Tesco labeled20 products such as orange juice, potatoes, laundrydetergent, and light bulbs with information relatedto each product’s greenhouse gas emissions.

Innovation is important for both manufacturer andprivate-label brands. Lincoln and Thomassen pointout that private-label share is 56 percent higherin product categories with low innovation activ-ity. Truly new products are also relatively moreprofitable. W. Chan Kim and Renee Mauborgne,in Blue Ocean Strategy (2005), concluded that 86percent of new product launches were variants ofexisting products and accounted for 39 percent oftotal profit. The remaining 14 percent of new prod-ucts were real new products and accounted for 61percent of total profit. Grant devotes about a thirdof The Green Marketing Manifesto to ideas for newbusiness concepts, providing plenty of “jumping offpoints” for executives. He suggests outlines of a

post-brand marketing paradigm. Post-brand doesnot mean buying things only for their functionalutility, however. It is more about working with moreauthentic social meanings and ideas that are capableof transforming lifestyles and attitudes. eBay is rep-resentative of such a post-brand future, maintainsGrant. He argues that, rather than having a brandimage, eBay is a marketplace, which just happens tohave a name, rules, a thriving local culture, even a di-alect. People used to perceive a world with no brandsas something like the old Eastern Bloc. Today, “nobrand” can be imagined in a more hopeful way: SaoPaulo has banned outdoor advertising throughoutthe city, and Grant reports that Auckland is consid-ering doing the same.

The erosion of manufacturer brands contributes toa “no brand world.” Private-label brands are lesspersonality-intensive and focus on the intrinsic qual-ities of the supplying company overall. Today, thatincludes green credentials. This is demonstrated byIKEA. Fresh & Easy has incorporated sustainabilityinto its stores. Lincoln and Thomassen observe thatprivate labels appeal to people’s need for simplicity.Likewise, Grant sees that society is moving from apostmodernist, chaotic information age with a cul-ture of excessive consumption to a more “settling”sustainability age.

On the surface, Lincoln and Thomassen’s book fo-cuses on private-label growth and what manufac-turer brands could do in response. Grant’s book ap-pears to be about marketing in an era where peopleare increasingly concerned with sustainability. Yet,both books offer much more to global business ex-ecutives and a great deal in common regarding theirauthors’ advocacy of newer approaches to brandbuilding in general. The books include many exam-ples and case studies from around the world. Theytackle questions such as: Why is brand trust eroding?What can be done to build and maintain authen-ticity among increasingly cynical consumers? Howcan marketers involve consumers with enthusiasm tococreate brands? What new business models mightbe invented and how might these be implemented

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to match new lifestyles? Fresh & Easy illustratesa new grocery store model, for example, and rep-resents an ongoing case study of a British entryinto an extremely competitive U.S. grocery retailindustry.

References

Kim, W. C., & Mauborgne, R. (2005). Blue ocean strategy.Boston, MA: Harvard Business School Press.

Gillian Rice teaches marketing and marketing research atArizona State University. She was a Fulbright Senior Scholarat the University of Bahrain in 1996–1997 and is professoremeritus at the Thunderbird School of Global Management.She holds a PhD from the University of Bradford. Dr. Rice’sresearch interests include environmentally related consumerbehavior, the fair trade movement, and models of employeecreativity and organizational innovation. She can be con-tacted at Gillian.Rice@asu.edu.

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