Private Label Marketers to Target Specific Demographics

With the economic recovery on the horizon, both brand and private label marketers want to know consumer intentions with respect to consumer packaged goods (CPG) purchases. Will shoppers stay with the store brand products they turned to during the recession or return to purchasing name brand products? Research from Nielsen suggests that many consumers have permanently changed shopping habits but marketers must work harder to maintain loyalty.

Prior to the recession, many consumers bought into the message promoted by name brand marketers – primarily that these products were superior in quality and worth paying extra for. During the recession, tight budgets allowed private label products a larger foothold in the market. These products now have over 20% of market share. And consumers give private label products high ratings:

  • Good alternative to name brands 74%
  • Quality as good as name brands 65%
  • Usually extremely good value for the mone7 69%
  • Some are higher quality than name brand 39%

But manufacturers of name brand products have been fighting back with steep discounts and aggressive marketing campaigns to recapture sales. Nielsen analysts recommend that private label brand managers start thinking like their name brand counterparts. In particular, they should target specific consumer groups who are mostly likely to purchase private label products. These include:

  • Younger consumers who must be targeted with digital campaigns
  • Older consumers who will respond to promotions in traditional printed circulars
  • Lower income consumers who are price sensitive
  • Hispanic shoppers who represent a rapidly growing demographic and will connect with store brands as long as they are presented with variety
  • African American and Asian consumers who are more likely to buy a mix of private and branded label products. In this case, marketers should use creative co-​promotions to build sales of the store brands.

Look for marketers to use a blend of promotions to target each demographic niche in order to increase sales of their private label products.

[Source: Hale, Todd. U.S. Store Brands Have Room to Grow. Nielsen​.com. 20 Jul. 2011. Web. 5 Aug. 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.