Knowledge that Transforms

The growth of private labels over the past decades has been attributed to various factors. This article formally addresses the link between private-label success and economic expansions and contractions using recently developed time-series/econometric techniques. The findings confirm conventional wisdom that a country's private-label share increases when the economy is suffering and shrinks when the economy is flourishing. However, asymmetries are found in the extent to and speed with which private-label share changes in cyclical up- versus downturns. Consumers switch more extensively to store brands during bad economic times than they switch back to national brands in a subsequent recovery. In addition, the switch to private-label brands is faster than the opposite movement to national brands after the recession ends. Finally, not only are consumers more prone to buy private labels during economic downturns, but some keep buying them when bad economic times are long over as well, leaving permanent "scars" on national brands' performance level. The authors argue that national-brand manufacturers can mitigate the effect of an economic downturn on their shares by intensifying their marketing-support activities in recessions. Such a proactive strategy is not often observed. On the contrary, available evidence suggests that many manufacturers exacerbate their predicament by cutting back on their marketing expenses when the economy turns sour. Most retailers invest more strongly in their private-label program when the economy deteriorates, making it even more difficult for national brands to catch up with the share lost during contractions.

Crises kill companies. Everything you have worked so hard to build can be lost in a second!

The question that seems to be on everyone's lips is 'Where does Chartered Marketer stand in light of the demise of the MFSA?' The good news is that the status of the CM(SA) has been elevated since October last year. Let me explain why.

While the fertile soil of Africa sprouts ever more South African supermarkets, SA's fresh produce export figures are escalating and 'home-grown' has become a fashion statement. A host of logistics challenges, however, need to be addressed both to sustain and develop our fragile cold supply chain.

Marketers are always eager to capitalize on any opportunity that makes their brand stand out - which is why they're prepared to pay large sums for gondola ends. But is their expense justified? Exactly how effective are gondola ends at pushing sales?

If you're like most South Africans, you'll treasure childhood memories of stopping off at the corner cafe to stock up on Chappies. Maybe there were even times when the cafe owner gave you Chappies in lieu of change. Once you'd purchased your hoard, you'd read the back of the wrapper and swap 'did you know' facts, before settling down for a good chew.