At the most recent International Egg Commission Conference, held in Canada, Dr Jan-Benedict Steenkamp, leading expert in branding and marketing, looked at how to successfully brand simple categories such as eggs.
Large retailers have been offering lower cost alternatives to national brands since the early 1980s, however, over the last 20 years, this offering has grown from what began as a private label, cheap alternative, into a full “Store Brand Challenge”.
Retailers now offer their own complete brand range, totally encircling the individual brands. Consumers can choose from lower priced own label alternatives, right through to more expensive products that are marketed as being more exclusive and more luxurious than the individual brand.
When strong brands such as Coca Cola, Heinz and Danone face such strong competition from store brands, what are the possibilities for egg businesses to prosper in such a competitive market?
Being, what Dr Steenkamp refers to as a staple category item, egg producers have an even more difficult challenge to build strong brand awareness.
So, what does it take be brand leaser in staple categories?
• A change in the consumer mindset
• An understanding of why consumers value brands
• The development and implementation of a business model for staple brands
More than a label
A brand is more than simply a label, it is a complete experience, the way people feel when they use a product, taste a product, and enjoy a product.
Dr Steenkamp stresses: “Strong brands don’t just happen, they are created”.
Consumers attach value to brands for a variety of reasons. A strong brand helps to simplify the buying process; rather than comparing all products available, consumers look for quality assurance and, often, emotional satisfaction.
Dr Steenkamp explained that once egg producers understand why consumers value brands, it is possible to create egg brands that consumers value, adding that: “People taste with their brains and their eyes, as well as their tongues”.
A free range egg may taste exactly the same as an egg from a caged hen, but perception is key and, if emotionally, the consumer values free range, they will taste the difference in their mind.
20 seconds to sell your advantage
Advertising the added advantages of your product is crucial. Egg consumers will often make their purchase decision at the moment they are in front of the shop display unit, and Dr Steenkamp believes that producers have only 20 seconds to persuade the customer to buy their product.
Therefore, clear reasons to buy must be on the packaging, telling people why they should choose your brand. On-pack messaging already used in the industry includes: high in Omega-3, less fat content, gold tasting, free range, and, organic.
Dr Steenkamp stresses that, as an industry, egg producers must remain realistic. “We are selling eggs – not iPhones,” he says. Consumers will not feel the same loyalty for eggs that they may feel for other products and so the challenge is more difficult, but not impossible.
Category promotion versus brand promotion
Dr Steenkamp offered attendees at the IEC event a discussion of the advantages and disadvantages of promoting eggs as a generic category, as well as of promoting individual brands.
Benefits of category promotion:
• Work best when there is a large number of smaller companies;
• Small companies benefit most reaping the rewards from an initiative they would not have been able to afford on their own. Larger organizations help to finance the campaign;
• Help to stimulate overall demand for a product;
• Help to dispel general category misconceptions, for example the association of eggs and cholesterol, to the benefit of the entire sector.
Benefits of brand promotions:
• Works best in a concentrated market;
• Stimulates demand for a specific product over the competition;
• Most effective when consumer is already well informed about the category;
• Helps to reinforce meaningful product differentiation.
Alongside Dr Steenkamp’s presentation, the IEC organized a dedicated marketing seminar which looked at initiatives in Canada and Europe.
Bonnie Cohen, of national marketing agency Egg Farmers of Canada, explained that eggs already have a 97 percent penetration in Canadian households, making it incredibly difficult to win new consumers. The challenge currently facing Egg Farmers of Canada, is how to encourage those people already eating eggs to eat more.
Egg consumption in Canada was at its highest in 1957, with 25 dozen eggs per person consumed annually. Today, this has fallen to 15 dozen.
Rather than continuing to blindly promote eggs to women and children, telling them the messages they wanted to hear, Egg Farmers of Canada decided to adopt a new approach.
This meant that, in 2005, Canada stopped promoting eggs and carried out market research to facilitate better promotion. Market research is now carried out on an on-going basis and every year a marketing strategy is developed for the coming 12 months, responding to consumer and market trends.
Ms Cohen detailed the four innovations that she believes are necessary for a successful marketing programme:
1. Consumer research and analysis
It is important to conduct usage and attitude studies each year to enable the development of successful strategies and to ensure that decisions are based on facts, not emotions.
2. Reaching the primary influencer
Egg Farmers of Canada have been educating doctors to help dispel the cholesterol myth, making it easier for doctors to then educate patients
3. Healthy energy strategy
Eggs are an excellent source of protein and provide lasting energy, and this message has been promoted nationally. Sponsorship links have been forged with the country’s leading ice hockey players to promote the health benefits of eggs.
4. Tailoring programmes
It is particularly important to adapt programmes to different needs, especially in a country the size of Canada.
This new strategy has proven to be effective. Egg consumption in Canada has increased and is predicted to increase further still.
Eggs continue to sell well in Europe and there has been an increase in demand for egg specialities, despite a recent slow down in sales of organic eggs.
Magali Depras, sales director Western and Southern Europe with packaging concern Hatmann, discussed the findings of a study that looked at the latest market developments and analyzed the different egg categories available in Europe. The study offered further support for Dr Steenkamp’s comments regarding the challenge of store brands.
She explained that all large European retailers are now offering their own-brand, private label egg categories and that even discount stores offer the full egg range, including barn, free range and organic.
The last three or four decades have seen a number of innovations in the egg market. In the 1970s, the choice was purely between white eggs and brown eggs; the 1980s brought the choice of barn eggs; in 1990 free-range and organic arrived on the supermarket shelves, and, since the turn of the century, customers have been given the opportunity to purchase eggs that are high in Omega-3 and with enriched vitamin content.
Create the best image
Ms Depras noted that there are more than a dozen different egg segments in Europe, including: housing types; hen breeds; region and tradition; XL eggs; Omega-3 and vitamin enriched; children; extra fresh; sports and fitness; cook and eat.
She explained that understanding what the consumer wants from their egg purchase enables you to market its benefits to them in the most appropriate manner.
In France, for example, barn eggs are being marketed as “eggs from the farm”. This choice of words helps the consumer picture a traditional farm and conjure up pleasant nostalgic images. The UK has seen the launch of the “Happy Egg”, an innovative way of promoting eggs from fee range hens.
“You don’t need a lot of words to mark your brand with a very strong identity and make it immediately recognizable,” explained Magali. “A picture tells more than a thousand words and differentiates your product easily from the mass.”
She continued that the use of landscapes and nostalgic photographs helped to create customer trust in the brand, and were very effective marketing techniques.
It is important that egg sellers look carefully at the various segments where eggs can be promoted and craft their marketing messages carefully, ensuring that the key selling features are fully brought to the fore.