Tuesday 29 September 2009

Consider what lies behind the label

This is the golden age of the brand, when simply attaching a fancy label to almost any product can inflate its value to a multiple of its intrinsic worth.

Ask a food industry professional which mass market retailer in the UK sells the best meat pies, and they will almost certainly give you the name of one of those German-based discounters, which famously sets manufacturers a higher specification than any of the so-called “quality” retail chains.

A former client of mine at the cheap and cheerful end of the fashion industry used to give City analysts an arresting presentation comparing the price and quality of his garments with those of more mainstream high street chains. Often the clothes were absolutely identical, even sourced from the self-same factories in the Far East; yet the price differentials were huge, and all based on the relative snob appeal of each retailer’s label.

I have listened to marketing experts present case studies of products that failed completely until they were re-launched at much higher prices, because consumers then reckoned that they must be something special. The entire cosmetics industry is based on investing millions in brands to convince the gullible that they are “worth it”. When the EU insisted that manufacturers start disclosing ingredients on their bottles, they opted to use the Latin “aqua” in the hope that most mugs would not twig that they were mainly buying ludicrously expensive scented water.

Meanwhile in the car market, I saved myself thousands by buying an excellent Nissan 4x4 rather than a remarkably similar vehicle with a more coveted badge on the bonnet.

All value retailers struggle to convince investors of their merits because they are simply not places that City types would be seen dead shopping themselves. A few years ago a food retailing client of mine was amazed by an exchange over lunch in which a very senior stockbroker (and former Government minister) asked him to justify his characterisation of Waitrose as “upmarket”. Baffled, he turned the question around to ask the grandee which food shops he thought would answer that description, and the answer was naturally the establishments where his wife bought all their own groceries: Fortnums and Harrods.

All of which came deliciously to mind last week when the boss of organic food suppliers Onefood and Swaddles, purveyors of a pie billed as “the best in the UK” to Fortnum & Mason, was jailed after Trading Standards officers uncovered the real secret of his supply chain. He simply bought non-organic products from the likes of Tesco, Waitrose and his local butcher, and repackaged them for sale at vastly inflated prices.

What fools snobbery makes of us, as the black arts of advertising and public relations are applied to the creation of brands we think we can trust. It happens in politics, too, where the Blair brand was a consummate PR creation, delivering three successive election victories despite the product’s self-evident failure to deliver exactly what it said on the tin.

British politicians can only dream of the billion dollars invested to create the Obama brand, but the Cameron brand seems to hold some promise – and, of course, the only job “Dave” has held outside politics was as a PR man. His greatest challenge will be the presence on the other side of that supreme manipulator of public opinion, Lord Mandelson, a person in whose presence even Max Clifford must surely doff his cap and recognise that he is a mere amateur.

From meat pies to Prime Ministers, the challenge to the consumer is to see through the fog of branding to the underlying quality of the product. You do not necessarily get what you pay for. But in political parties as in pullovers, the niggling worry must be that they really are all very much the same apart from their labels.

Originally published in The Journal, Newcastle upon Tyne.

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