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This article was originally published in The Tan Sheet

Executive Summary

PRIVATE LABEL MANUFACTURERS SHOULD CAPITALIZE ON BRAND NAME LAUNCHES by being on the shelf within 18 months of the brand name's introduction, Duane Reed Senior VP-Sales and Marketing Gary Charboneau told the Private Label Manufacturers Association's annual meeting in Miami on March 27. "What better time to be on the shelf with a store brand than during this launch period," he pointed out. Charboneau, who recently left CVS after twelve years to join Duane Reed, suggested that private label manufacturers "take advantage of the national brand advertising of product attributes and generate store brand trial before a consumer forms strong preferences for taste, texture, fragrance or color." A new national brand item "experiences its greatest period of trial in its first 18 months on the shelf," he explained. "Consumer marketing and advertising programs are at their peak during the launch period and additional trade dollars flow heavily to generate distribution and initial retail promotional support." In his presentation entitled "New Directions for Drug Chains," Charboneau explained how manufacturers can add value to their private label lines for their retailer customers. He pointed out that "it's becoming important enough [for retail chains] to make being six weeks or eight weeks ahead of [other private label manufacturers] in bringing a product to the shelf the key reason to select you as the supplier of that item. A few pennies of difference in the price would be less important to me than being first on the shelf with a new item." The drug chain exec noted that "as retailers learn the competitive advantage that speed represents, [private label] manufacturers who have focused on using speed as an added value will . . . gain a leg up on others when it comes to the decision of who to award a new item to." With new items, he declared: "Be first. Be best." Charboneau also emphasized package design to the private label audience. He suggested that private label "packaging should be designed so there's no question in the customer's mind whose product they're purchasing." A store brand's line should look like a "family" of products that tells "a consumer that these products are cut from the same cloth of savings and product performance." Consistent positioning and sizing of the logo says that "these products are related and share the attributes important to the consumer," he said. Private label manufacturers should also take part in helping retailers "decide on attributes they want to communicate" in their packaging, Charboneau observed, and limiting the number to three. "More than that gets tricky," he said. Charboneau suggested that private label manufacturers also participate in "advertising and in-store communications that focus on these attributes." Charboneau recommended that "adding value to your selling proposition will help you move further ahead of those selling on price alone." He added: "I know that this is a healthy year for private label manufacturers and the time to do it is when you're healthy, not when you're struggling."

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