Hey Rainmaker, take a look at that picture. Notice anything… Oh no… I’m going to do it… I’m going to go there… Notice anything… Fishy?
What you see, if you look closely, is two brands of fish sticks. Two brands, with remarkable similarities.
In fact, I was making fish sticks for my kids last week, and with one box empty I grabbed the other.
I think it was the recipe on the back of the box that I noticed first.
It caught my eye that these two different brands would have the exact same recipe on the back.
Then the glaringly obvious (*in hindsight!) fact jumped out at me that the recipe wasn’t the only thing that was the same.
The fish sticks themselves were basically identical.
The picture on the front of the box — of the fish sticks and dip — is the same.
They both came with 44 sticks in the box. 44 “Golden, Breaded, Cut From Whole Fillets” sticks, I should point out.
Even the gradient in the background of the box is the same — except one is blue, the other green.
The only thing different between those two boxes of fish sticks is the branding — the logo and the colors.
And yet they sit side-by-side on the shelf, in the freezer, at the grocery store. Selling, often, for different prices.
The exact same thing.
Apparently, it’s been that way since somewhere between 1996 and now, when the two brands ended up under the same ownership.
Somewhere along the way, no doubt, they merged production to take advantage of economies of scale.
And so branding is done two brands at a time. Production can be done two brands at a time. Recipes to go on the back of the box can be done two brands at a time. And so on…
And as consumers, for the most part, we’re none-the-wiser.
In fact, we’ve been buying these brands for at least the last couple years and I’ve not noticed a bit, until last week. (Admittedly we don’t eat THAT MANY fish sticks!)
Now here’s something that might be more shocking!
This fishy tale is obvious enough that they can get caught. Most brands are more stealthy about it.
A while back I did some research into the shaving market. This was right as Dollar Shave Club was becoming a thing.
I found the folks who make their blades. (If I remember right, it’s Dorco.)
And you can buy from the manufacturer, direct.
But you can actually get an even better price. Cheaper than the manufacturer. Cheaper than Dollar Shave Club.
It’s the store brand at your local drug store. There are a couple brands in stores here in Nebraska, that are the exact same thing. Best Choice at the discount stores (I think). And LeTechniq at the nicer grocery stores in town.
Same blades. All selling for different prices, under different brands.
This is rampant among consumer products.
Different labeling, maybe slightly different ingredients. Sometimes sold for pennies more or less. Other times, sold for twice as much.
Now, I’m not saying this is good or bad…
It’s good for you, if you know, that you can go buy the store brand and get the same user experience as the premium product.
But from a brand perspective, it’s good to know that some people will pay for brand, or experience, or something that makes them value it more.
And ultimately, it’s the subjective value that determines what something can sell for.
If someone is happy to pay 50% more for the same product because it’s at a different store or under a different logo, there’s nothing wrong with that.
And in fact, it can be part of a smart strategy for totally dominating your market and owning your industry.
As far as I’m concerned, the owners of the Van De Kamp’s and Mrs. Paul’s brands of fish sticks pretty much own those spaces in my local grocery stores.
While there are other options, it’s clear those are the big two.
And you know what?
That company, I’m sure, sells more because they have BOTH brands on the shelf, than if they were to consolidate into one.
And there’s nothing wrong with that, I don’t think.
They’re not lying about it. In fact, when you read the contact information on the boxes, you can see that they’re both from the same company.
They don’t do much to hide it.
But here’s the thing…
You don’t have to sell two products that are exactly the same to use this strategy — and in fact, it’s probably better if you don’t!
Here’s my preferred way to use this strategy. And I think it leads to even better positioning, and an even stronger presence in your market.
Now, roughly speaking, most markets have three positions, in terms of price. There’s the low-cost option, the mid-level, and the premium.
You can enter a market at any one of these three positions. And at any one of these positions, you have the opportunity to flourish.
But when you’re successful, you run into an issue.
At the bottom, you’ll find that you’re perceived as the “cheap” brand, and a lot of buyers will look negatively upon you for that.
In the middle, you’re both too expensive for the low-cost buyers, and not premium enough for the upmarket buyers.
And at the top, you’re perceived as too expensive, snooty, or both.
So what do you do?
You leverage your current business operations and assets, and create an alternative brand serving another position in the market.
You can use the same distribution chain, relationships with suppliers, marketing assets (though not creative), and so on to be able to roll out a new brand that’s higher or lower than your current one, at extremely minimized risk, and with totally maximized efficiency.
Maybe to create a premium product, you’ll need better parts or ingredients. Fine. But you can probably use the same production facility to make it.
Same way going down the price ladder.
You’ve seen this before, and it even made the news yet again…
One example: Gap.
You probably know, Gap is not just Gap. Yes, they own all the Gap stores, and the online retail operations.
But the same company owns Old Navy. Of the two, Old Navy is definitely the low-cost version. Gap is mid-range.
And, they own Banana Republic. For the average consumer, that’s a higher-level brand.
All three, all owned by the Gap parent company. (As well as the brands Athleta and INTERMIX.)
Together, they dominate a HUGE portion of the “hip” clothing market. (It makes me feel old and out of touch and definitely NOT hip to put hip in quotes!)
If you buy online, you’ll find that the boxes are co-branded for all their brands.
No doubt, they share warehouses, online operations, shipping operations, call centers, and more.
Plus they likely share distribution, manufacturing, and a whole host of other critical business operations. Making each business operate more efficiently, as they tap the economies of scale made available.
Another news item from The Wall Street Journal proclaims, “Whole Foods to Use ‘365’ Name for New Sister Chain.”
Whole Foods is leveraging their scale to create a sister chain of lower-priced grocery stores, meant to attract younger customers.
Their big problem is summed up in the nickname, “Whole Paycheck.” Whole Foods is seen as too premium for many potential customers, and with organic and other natural food options proliferating, they need a new strategy.
So they’re creating these alternative stores as a way to sell at a lower price without significantly impacting the Whole Foods premium brand.
That article also mentioned another example: WalMart and Sam’s Club. Yet another case of the same company creating an alternative experience to appeal to a slightly different consumer.
Here’s my question for you…
What are you doing right now that could be shifted to appeal to a different consumer? Particularly if you’re in a business that’s leverageable, scalable, and capable of being cloned to a higher or lower market?
Do it right, and it’s a giant opportunity to dominate your market and own your entire industry.
Yours for bigger breakthroughs,
Editor, Breakthrough Marketing Secrets