Heb Own Brands Analysis
H-E-B Own Brands
4-12-2012
Marketing
Rob Price was recently made vice president of Own Brands, which was the private label of H-E-B. The chairman, Charles Butt, had a real interest in growing the sales of the Own Brand product line. At the time, Own Brand represented 19% of sales while national brands accounted for the rest, which was opposite of 30 years ago when Charles took responsibility for the business. Charles gave Rob a goal to increase the sales of Own Brand’s private label by 11% in the next five years to bring it up to a 30-70 ratio of private and national brands, respectively. The increase needed to be across all product lines, but Rob had a specific assignment regarding the Own Brand’s bottled water under the label Glacia.
The problem with the existing Glacia water was that it did not accurately market itself as imported spring water from Canada, which would increase its market share from the French imported water, Evian. There were many things for Rob to consider as his research showed that consumers would be more likely to buy Glacia if they knew it was Canadian spring water. With the competitive grocery market at the time, especially with Wal-Mart’s emerging into the grocery scene, Rob needed to make a specific recommendation on how to increase its sales in context of the overall Own Brand strategy.
Initially, the problem was an undetected flaw in the marketing and labeling of the product. If consumers do not have something repeatedly pushed in their face, they will not likely remember it when asked. Other problems were caused by Wal-Mart and their huge ability to undercut pricing of most other chains because of their national, even international supply-chain relationships. Wal-Mart had its own brand in Great Value products but, according to the case, was not as high quality as the H-E-B Own Brand products. Great Value compared to the Hill Country Fare tier-3 generic that H-E-B put out. Rob knew that his competition was with
4-12-2012
Marketing
Rob Price was recently made vice president of Own Brands, which was the private label of H-E-B. The chairman, Charles Butt, had a real interest in growing the sales of the Own Brand product line. At the time, Own Brand represented 19% of sales while national brands accounted for the rest, which was opposite of 30 years ago when Charles took responsibility for the business. Charles gave Rob a goal to increase the sales of Own Brand’s private label by 11% in the next five years to bring it up to a 30-70 ratio of private and national brands, respectively. The increase needed to be across all product lines, but Rob had a specific assignment regarding the Own Brand’s bottled water under the label Glacia.
The problem with the existing Glacia water was that it did not accurately market itself as imported spring water from Canada, which would increase its market share from the French imported water, Evian. There were many things for Rob to consider as his research showed that consumers would be more likely to buy Glacia if they knew it was Canadian spring water. With the competitive grocery market at the time, especially with Wal-Mart’s emerging into the grocery scene, Rob needed to make a specific recommendation on how to increase its sales in context of the overall Own Brand strategy.
Initially, the problem was an undetected flaw in the marketing and labeling of the product. If consumers do not have something repeatedly pushed in their face, they will not likely remember it when asked. Other problems were caused by Wal-Mart and their huge ability to undercut pricing of most other chains because of their national, even international supply-chain relationships. Wal-Mart had its own brand in Great Value products but, according to the case, was not as high quality as the H-E-B Own Brand products. Great Value compared to the Hill Country Fare tier-3 generic that H-E-B put out. Rob knew that his competition was with