A while back, Nigel Hollis, Chief Global Analyst at Millward Brown, published an interesting post on brand copycatting in China. (Copycat manufacturers are known there as “Shanzai.”) He presented a discussion about the cultural orientation favoring such products in China, and made some interesting observations about the meaning of brands.
The images Nigel chose for his piece caught my attention. How furious must Coca Cola be, or Gillette, at such bald faced infringement on the most important aspects of their global brand identities.
And yet, I am moved to ask, what would be worse, this or a serious brand contender with its own unique and appealing value proposition?
The empirical backing I have for such a preposterous suggestion comes from the early philosophy of private label brand programs. For decades, copycat packaging was the rule in the US market. I studied the sector extensively in the late nineties and early 2000’s, when the replication of trade dress reached its apex as an art form.
Not only did retailers manage to sell their own brands in packaging that looked like national brand packaging, they also got to merchandise their packaging immediately adjacent to that national brand packaging, and they usually priced their products about 30% lower. Consumer comparison was thus not only invited, it was imperative!
Why would national brands allow this situation to proliferate with such little apparent pursuit of redress? For a series of speaking engagements on private label branding I developed the following rationale:
One, don’t bite the hand that feeds you. Retailers own the shelf space. National brands need the shelf space.
Two, imitation is the sincerest form of flattery. Doesn’t the presence of copycat packaging suggest that the product inside is a mere copy of the original as well? The preferred alternative is always inside the original package – the national brand. Isn’t that worth a price premium?
Three, the effect of these shelf sets is to amplify the presence of the original brand! The same container shapes, sizes, colors, type styles and other slavishly adapted elements of the national brand’s visual architecture all evoke mental impressions of the original brand. They draw the eye towards a known brand entity. To national brand managers, there is advertising and merchandising value in that.
Taken together, these arguments suggest that national brands evaluated the tradeoffs, decided the pros outweighed the cons, and everyone went on with their lives.
In the decade since, supermarkets have grasped the power of private labels to differentiate their stores and offer customers a brand value proposition that resonates with their experience of the stores themselves. Private labels are now every bit as visually appealing and as professionally executed as those of national brands. They no longer offer a copy of the national brand product but a unique experience, at a value that reflects a specific and expected level of quality.
And I wonder, what do national brands think now? Which is worse, the copycat branding of old, or the head-to-head competitive branding of today? I feel I should add a fourth element to my explanation: that the national brands may have known that copycatted labeling was the lesser of two possible evil outcomes!
Not that Coca Cola or Gillette have the same criteria in evaluating the copycat situation in China, but it does make you think.