August 1, 2007
CSD: Branding Benefits
By Julie Crawshaw
Through a special arrangement, what follows is an excerpt of a current article from Convenience Store Decisions magazine presented here for discussion.
Studies indicate that the majority of purchase decisions are made at the point of sale, where packaging is the primary spokesperson for the product. Using this knowledge to full advantage in your c-store’s foodservice segment calls for developing packaging that is memorable, presents the product well and makes customers want to buy it right now.
Branded packaging also provides a means for customers to distinguish one store’s products from another’s and of creating and maintaining an image that encourages confidence in consistent product quality. Conventional marketing wisdom holds that, once established, a branded packaging design that stands out and is well received by customers should remain the same for years. However, Mike Thornbrugh, manager of public and government affairs for Tulsa, Okla.-based QuikTrip, said this doesn’t necessarily apply to the convenience store world.
QuikTrip, which operates 476 stores in nine states, frequently changes packaging designs for the extensive variety of branded food and drink items it sells.
“Customers like to see something new and fresh,” Mr. Thornbrugh said. “The company name is always the focal point, but the designs and colors around it frequently change for all of our branded packaging, including shakes, fountain and coffee bar drinks, sandwiches and other foods.”
Even though some QuikTrip customers consider the designs collectible, especially those created for events such as Oklahoma’s centennial and the annual Wichita River Festival, Mr. Thornbrugh doesn’t think that branded packaging necessarily boosts sales. “To our customers, the most important things about our drink containers are that the cup lids fit properly and that the cups fit their cup holders,” he said.
Studies show that branded cups in particular promote future beverage sales, and using a proprietary label makes promoting frequent buyer programs easier and results in more bounce back business.
Loves Travel Stops & Country Stores uses its Java Amore coffee brand to promote its gasoline loyalty rewards for truck drivers. When a Love’s truck customer buys 50 gallons or more of diesel fuel they get a free coffee or fountain drink in a special cup issued when they joined the refill program.
Love’s, a 180-store chain based in Oklahoma City, now offers several products manufactured under their own private label, including engine oil, jerky, Styrofoam coolers and ice. Expanding from simple branded food and drink packaging into private label products allows Love’s to offer its customers high-quality items at real value-offer prices.
At base, Mr. Thornbrugh observed, promoting your brand is really about walking your talk by making your company’s mission statement a reality. “That’s why we guarantee every cup of coffee and fountain drink we sell,” he said. “If customers don’t like it, we’ll give them their money back or let them try something else. The cup is just an extension of that.”
Discussion Questions: Do you think branding is any more or less important for convenience stores than other retailers? What role do you see packaging playing in retailer branding efforts? How do you know when a brand’s packaging design needs to be updated?
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Private label will continue to grow in all channels, including Convenience. However, new private label product introductions should go slowly in c-stores. The reason is that c-stores don’t have a reputation for great foodservice–either in terms of health or taste. Forgive me, but the reputation is “junk food.” Hotdogs, microwave burritos and slushies rule the day. Now, some of that is from demand. But not all of it.
C-stores should start with a few core items that have been carefully vetted and tested for exceptional consumer response. Include both product and packaging in the testing. Let the brand build some positive halo from those core items. Next, after awareness and brand imagery has been established, roll out another group of products that meet the same standard.
I know there is overwhelming temptation to throw something on the shelf, because competitors are doing it, and because higher margins beckon. But ultimately–win the war, not just the battle. Build the brand from the inside out.
I believe that we all will agree, branding is important in any channel of distribution including fast foods and foodservice.
The question of the importance of brand for foods ready to eat, or heat-up is as important in c-stores as it is in supermarkets and small independent food/meal shops.
7-Eleven doesn’t use the Oscar Mayer hot dog vs. other less expensive and less quality in its grilling program and as an in-store feature for ‘kicks’. The Brand draws shoppers in, and creates multiple purchases. Interestingly, c-store frozen packaged products to go are branded, reinforcing the image that the product is worthy of purchase and has quality.
For very forward thinking c-store operations, like Sheetz and Wawa, each have patiently–marketing wise–created an expertise in carry-out foods and ready to eat meals that have given the consumer the quality and assurance of great taste. The Brand is Sheetz and Wawa in this sector of the industry.
In general, this industry has to rely on branded foods to go, or ready to eat, to be profitable. This is called leveraging a national, regional or local acknowledged brand, and not going through the complete marketing and food development process like Sheetz and Wawa.
Hmmmmmm…MAD MARKETING is important to your business.
I suppose it’s possible to discuss the emerging potential for C-store brands without including Slurpee, the venerable brand that taught the rest of the channel about brand marketing–but I don’t see how. And if Slurpee were actually forgotten during such a discussion, Big Gulp would probably slip into the conversation. In other words, successfully marketing C-store brands is not new or even recent. Oh Thank Heaven.
As a co-developer of the Big Bite brand and product in ’87/’88, permit me to expand a bit on Stephan Kouzomis’s comments about 7-Eleven’s branded hot dog program that uses Oscar Mayer products: The John Morrell Company’s hot dog handily won our consumer tests for flavor and mouthfeel. Yet, we picked Oscar Mayer.
One area where I think c-stores as a group may be deficient is in carrying “El Cheapo” private brands that they get from their wholesaler or distributor. You’ve all been in these stores–they carry “El Cheapo” tissue instead of Kleenex or another name brand. The packaging screams out that the product inside is inferior, which it indeed is. While this may work temporarily for stores just coasting along taking money from “Bubba,” it only works until a better operation comes in nearby and offers better products at better value. I think a good barometer as to whether a store(s) will exist if you come back to visit in 5 years is what the quality/appearance of their PL is.
We have observed several c-store retailers wisely taking cues from the success of private label within the grocery sector, with the most successful brands integrating private label as part of an overall customer experience strategy. The key is authenticity–in the quality of the private label product, the packaging, and the overall in-store experience. All should be working in tandem and in alignment with the c-store’s brand promise. Consumer loyalty is now shifting to those brands who consistently provide an authentic experience. Private label products and packaging represent a unique platform of differentiation for those who understand how and where it should fit into the overall brand strategy.
In an immediate consumption environment such as a c-store the packaging of “ready to eat” or “Food on the Go” plays a major role in communicating quality, freshness, and taste appeal.
As others have stated, you only get one chance to win the consumer with your product…if there is a good experience the first time they try it, then you have a chance for a repeat–if not, you’ll probably not get another chance and possibly risk negative word of mouth advertising!
For me the packaging has to either let me see what’s inside or at least have an appetizing food shot of the finished product; it must have clear and simple cooking instructions (if necessary); and it must communicate fresh using easy-to-find/understand “better if used by” dating.
If I can get these things done using packaging then I have a tremendous opportunity to create an “Own Brand” scenario that starts to build consumer loyalty to the operator.
Seeing that the original purpose of the convenience store is exactly what it states–“convenience,” shoppers are looking to get what they need in a time they want it and aren’t looking for help to do so. Most “C” store shoppers are there to get in and out in a matter of moments. It’s the Quick Trip that’s available from 7 to 11 (or longer) that fulfills that consumers need for fast product. People are there to pick up a beverage or that last minute item they just realized they need.
The idea is to draw the customer into the store and then expose them to other opportunities to purchase. The hope is that incremental purchases above and beyond what their primary visit are made. With most c-stores packing almost 500 or more SKUs in 2500 feet or less, branding and packaging is definitely important. Each product has to jump out and make a statement, not to mention that the packaging size might have to be altered (i.e. a 4 pack of toilet paper, not 12 pack).
Some manufacturers have made great strides in focusing on this consumer. Many have done so while maintaining a brand or brand family that consumers are already familiar with. This is important too because consumer love consistency and quick recognition in any retail environment. However, in the c-store, this might be even more important because the customer is not there to “shop”–they typically know what they want and are going right for it. It’s not to say that a brand that may not be familiar or less recognizable won’t be purchased, but that’s where the packaging must make a bold statement to say “buy me!” Manufacturers of these brands need to be aware of their target audience in the c-store and may need to consider alternate packaging for this particular segment. Innovation, Uniqueness and Fun are the operative attributes that could help consumers to make that incremental purchase.
Best no-cost label improvement: the jokes on Heinz ketchup. The essential label shape, colors, and typography have not changed for generations, yet the brand gave itself wit by printing tongue-in-cheek sayings on every bottle. And the jokes don’t scream at you. They assume the shopper is intelligent. They make you think and then you smile. People stop at the Heinz display just to read the jokes!
There’s no doubt that more than 1 brand could be more creative, without being disruptive. Certainly convenience stores, using their packaging (cups, bags, napkins, sandwich wrappers, etc.) might take a cue. And how about fast food restaurants? They go through more containers, bags, cups, wrappers, and napkins than any other business.
While not wishing to diminish the value of packaging, it’s what’s in the package that drives repeat business. If the coffee is bad, it doesn’t matter how good the package is, people will go elsewhere.
Studies may show that most decisions are made at the shelf. That does not mean that brand equity, advertising, past experience, etc. aren’t influencing the decision. It means they are not thinking much about the brand/product choice until they get to the shelf.
C-Stores generally do not have the marketing depth to properly manage PL items, 7-Eleven being the possible exception as they have developed signature products (Big Gulp, etc.) over they years.
Brand development has traditionally required the use of media to tout the benefits of the product. Other than signs, the c-store industry utilizes little media and the cost of actually doing something themselves has always forced the c-stores to lean heavily on suppliers. There are ways to accomplish brand building in c-stores.
However these methods require management to reevaluate their mission. Unless the mission of the c-store is expanded, any investment in developing brands will likely be wasted.
I would be more focused on the shopper in convenience stores as my top priority, not brands. Convenience stores are shopped by consumers because they are convenient; not because of brands or selection or price. If shoppers stop into a convenience store and you want them back, then make sure your item selection and service fulfill their need for convenience.
Some great examples are stated in the article and the key is from the time a shopper drives up to when they leave, make their shopping convenience easy. Great category location signage, the right seasonal items well displayed, easy self service gas, etc.
It’s about the experience and delivering on why shoppers stop at a convenience store in the 1st place and while brands are part of the equation, they are not a primary reason shoppers go to the convenience format.
The 4 Ps of marketing play a role in all purchasing decisions, but price is first, not packaging. The top drivers in any c-store, including batteries, beer, gasoline and soda, are primarily delineated by price. The fastest velocity movers are price driven, not packaging driven, and we see this played out in the major retailers as well. Housebrands and competitive products provide greater margin and revenue dollars than the more expensive packaged products. The reason these outsell the name brand (and often better packaged competition) is because of price, not packaging. In fact, as all great marketers know, ugly packaging garners more attention and a second look, when it comes to impulse and front end/register products. This plays out in the industry every day where loud, racy magazines, gum and candy, etc. all vie for the consumer’s attention at the checkstand. Maybe there needs to be a study with price vs. packaging….
The examples cited in the CSD article seem to speak to how retailers are using their knowledge of consumer wants and needs to deliver products that are more finely tuned to those needs, rather than using product packaging to deliver a “brand.” And that’s exactly how it should be.
Private label and retailer-branded goods give retailers an opportunity to take advantage of the intimacy of their customer knowledge to come out with products or packaging innovation that fills market gaps no one else sees. By repeatedly doing that well–even if it’s something as simple as tapping into community pride by commemorating local events–the retailer has an opportunity to build or enhance their own brand.
Brand is an outcome: the sum of the products, the store, the employees, and how that all gels into a customer experience–over time. It’s not something you design, and it’s not just a logo on a cup.
I am not sure why packaging for c-stores would be any more important than packaging for any other store type, unless the store in question carries only brands that customers would not be acquainted with normally.
Packaging is extremely important to the enticement and eventual selling of the product to the customer. It is what tells the customer about the product much more than any sign or even a salesman can do. Sometimes it is the photograph or great graphics on the package which catches the customers’ eye, but the descriptions, both those that enhance, as well as regulatory info that the customer reviews to understand if the product satisfies their desires, or fits their needs. Yes, it is very important.
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Private label will continue to grow in all channels, including Convenience. However, new private label product introductions should go slowly in c-stores. The reason is that c-stores don’t have a reputation for great foodservice–either in terms of health or taste. Forgive me, but the reputation is “junk food.” Hotdogs, microwave burritos and slushies rule the day. Now, some of that is from demand. But not all of it.
C-stores should start with a few core items that have been carefully vetted and tested for exceptional consumer response. Include both product and packaging in the testing. Let the brand build some positive halo from those core items. Next, after awareness and brand imagery has been established, roll out another group of products that meet the same standard.
I know there is overwhelming temptation to throw something on the shelf, because competitors are doing it, and because higher margins beckon. But ultimately–win the war, not just the battle. Build the brand from the inside out.
I believe that we all will agree, branding is important in any channel of distribution including fast foods and foodservice.
The question of the importance of brand for foods ready to eat, or heat-up is as important in c-stores as it is in supermarkets and small independent food/meal shops.
7-Eleven doesn’t use the Oscar Mayer hot dog vs. other less expensive and less quality in its grilling program and as an in-store feature for ‘kicks’. The Brand draws shoppers in, and creates multiple purchases. Interestingly, c-store frozen packaged products to go are branded, reinforcing the image that the product is worthy of purchase and has quality.
For very forward thinking c-store operations, like Sheetz and Wawa, each have patiently–marketing wise–created an expertise in carry-out foods and ready to eat meals that have given the consumer the quality and assurance of great taste. The Brand is Sheetz and Wawa in this sector of the industry.
In general, this industry has to rely on branded foods to go, or ready to eat, to be profitable. This is called leveraging a national, regional or local acknowledged brand, and not going through the complete marketing and food development process like Sheetz and Wawa.
Hmmmmmm…MAD MARKETING is important to your business.
I suppose it’s possible to discuss the emerging potential for C-store brands without including Slurpee, the venerable brand that taught the rest of the channel about brand marketing–but I don’t see how. And if Slurpee were actually forgotten during such a discussion, Big Gulp would probably slip into the conversation. In other words, successfully marketing C-store brands is not new or even recent. Oh Thank Heaven.
As a co-developer of the Big Bite brand and product in ’87/’88, permit me to expand a bit on Stephan Kouzomis’s comments about 7-Eleven’s branded hot dog program that uses Oscar Mayer products: The John Morrell Company’s hot dog handily won our consumer tests for flavor and mouthfeel. Yet, we picked Oscar Mayer.
One area where I think c-stores as a group may be deficient is in carrying “El Cheapo” private brands that they get from their wholesaler or distributor. You’ve all been in these stores–they carry “El Cheapo” tissue instead of Kleenex or another name brand. The packaging screams out that the product inside is inferior, which it indeed is. While this may work temporarily for stores just coasting along taking money from “Bubba,” it only works until a better operation comes in nearby and offers better products at better value. I think a good barometer as to whether a store(s) will exist if you come back to visit in 5 years is what the quality/appearance of their PL is.
We have observed several c-store retailers wisely taking cues from the success of private label within the grocery sector, with the most successful brands integrating private label as part of an overall customer experience strategy. The key is authenticity–in the quality of the private label product, the packaging, and the overall in-store experience. All should be working in tandem and in alignment with the c-store’s brand promise. Consumer loyalty is now shifting to those brands who consistently provide an authentic experience. Private label products and packaging represent a unique platform of differentiation for those who understand how and where it should fit into the overall brand strategy.
In an immediate consumption environment such as a c-store the packaging of “ready to eat” or “Food on the Go” plays a major role in communicating quality, freshness, and taste appeal.
As others have stated, you only get one chance to win the consumer with your product…if there is a good experience the first time they try it, then you have a chance for a repeat–if not, you’ll probably not get another chance and possibly risk negative word of mouth advertising!
For me the packaging has to either let me see what’s inside or at least have an appetizing food shot of the finished product; it must have clear and simple cooking instructions (if necessary); and it must communicate fresh using easy-to-find/understand “better if used by” dating.
If I can get these things done using packaging then I have a tremendous opportunity to create an “Own Brand” scenario that starts to build consumer loyalty to the operator.
Seeing that the original purpose of the convenience store is exactly what it states–“convenience,” shoppers are looking to get what they need in a time they want it and aren’t looking for help to do so. Most “C” store shoppers are there to get in and out in a matter of moments. It’s the Quick Trip that’s available from 7 to 11 (or longer) that fulfills that consumers need for fast product. People are there to pick up a beverage or that last minute item they just realized they need.
The idea is to draw the customer into the store and then expose them to other opportunities to purchase. The hope is that incremental purchases above and beyond what their primary visit are made. With most c-stores packing almost 500 or more SKUs in 2500 feet or less, branding and packaging is definitely important. Each product has to jump out and make a statement, not to mention that the packaging size might have to be altered (i.e. a 4 pack of toilet paper, not 12 pack).
Some manufacturers have made great strides in focusing on this consumer. Many have done so while maintaining a brand or brand family that consumers are already familiar with. This is important too because consumer love consistency and quick recognition in any retail environment. However, in the c-store, this might be even more important because the customer is not there to “shop”–they typically know what they want and are going right for it. It’s not to say that a brand that may not be familiar or less recognizable won’t be purchased, but that’s where the packaging must make a bold statement to say “buy me!” Manufacturers of these brands need to be aware of their target audience in the c-store and may need to consider alternate packaging for this particular segment. Innovation, Uniqueness and Fun are the operative attributes that could help consumers to make that incremental purchase.
Best no-cost label improvement: the jokes on Heinz ketchup. The essential label shape, colors, and typography have not changed for generations, yet the brand gave itself wit by printing tongue-in-cheek sayings on every bottle. And the jokes don’t scream at you. They assume the shopper is intelligent. They make you think and then you smile. People stop at the Heinz display just to read the jokes!
There’s no doubt that more than 1 brand could be more creative, without being disruptive. Certainly convenience stores, using their packaging (cups, bags, napkins, sandwich wrappers, etc.) might take a cue. And how about fast food restaurants? They go through more containers, bags, cups, wrappers, and napkins than any other business.
While not wishing to diminish the value of packaging, it’s what’s in the package that drives repeat business. If the coffee is bad, it doesn’t matter how good the package is, people will go elsewhere.
Studies may show that most decisions are made at the shelf. That does not mean that brand equity, advertising, past experience, etc. aren’t influencing the decision. It means they are not thinking much about the brand/product choice until they get to the shelf.
C-Stores generally do not have the marketing depth to properly manage PL items, 7-Eleven being the possible exception as they have developed signature products (Big Gulp, etc.) over they years.
Brand development has traditionally required the use of media to tout the benefits of the product. Other than signs, the c-store industry utilizes little media and the cost of actually doing something themselves has always forced the c-stores to lean heavily on suppliers. There are ways to accomplish brand building in c-stores.
However these methods require management to reevaluate their mission. Unless the mission of the c-store is expanded, any investment in developing brands will likely be wasted.
I would be more focused on the shopper in convenience stores as my top priority, not brands. Convenience stores are shopped by consumers because they are convenient; not because of brands or selection or price. If shoppers stop into a convenience store and you want them back, then make sure your item selection and service fulfill their need for convenience.
Some great examples are stated in the article and the key is from the time a shopper drives up to when they leave, make their shopping convenience easy. Great category location signage, the right seasonal items well displayed, easy self service gas, etc.
It’s about the experience and delivering on why shoppers stop at a convenience store in the 1st place and while brands are part of the equation, they are not a primary reason shoppers go to the convenience format.
The 4 Ps of marketing play a role in all purchasing decisions, but price is first, not packaging. The top drivers in any c-store, including batteries, beer, gasoline and soda, are primarily delineated by price. The fastest velocity movers are price driven, not packaging driven, and we see this played out in the major retailers as well. Housebrands and competitive products provide greater margin and revenue dollars than the more expensive packaged products. The reason these outsell the name brand (and often better packaged competition) is because of price, not packaging. In fact, as all great marketers know, ugly packaging garners more attention and a second look, when it comes to impulse and front end/register products. This plays out in the industry every day where loud, racy magazines, gum and candy, etc. all vie for the consumer’s attention at the checkstand. Maybe there needs to be a study with price vs. packaging….
The examples cited in the CSD article seem to speak to how retailers are using their knowledge of consumer wants and needs to deliver products that are more finely tuned to those needs, rather than using product packaging to deliver a “brand.” And that’s exactly how it should be.
Private label and retailer-branded goods give retailers an opportunity to take advantage of the intimacy of their customer knowledge to come out with products or packaging innovation that fills market gaps no one else sees. By repeatedly doing that well–even if it’s something as simple as tapping into community pride by commemorating local events–the retailer has an opportunity to build or enhance their own brand.
Brand is an outcome: the sum of the products, the store, the employees, and how that all gels into a customer experience–over time. It’s not something you design, and it’s not just a logo on a cup.
I am not sure why packaging for c-stores would be any more important than packaging for any other store type, unless the store in question carries only brands that customers would not be acquainted with normally.
Packaging is extremely important to the enticement and eventual selling of the product to the customer. It is what tells the customer about the product much more than any sign or even a salesman can do. Sometimes it is the photograph or great graphics on the package which catches the customers’ eye, but the descriptions, both those that enhance, as well as regulatory info that the customer reviews to understand if the product satisfies their desires, or fits their needs. Yes, it is very important.