Essay on Cocoa Puffs Case Study

The Rise of the Generic Label Think of the last time you went to the grocery store. In the cereal aisle you may have seen a box of Cocoa Puffs. On the box, Sonny the yellow billed Cuckoo Bird. Next to the Cocoa Puffs you notice another box of cereal that appears to look like Cocoa Puffs, but is not. It has a bowl of what appears to be the chocolaty puffed spheres. Though, instead of Sonny there is a very plain non-colorful hippo. The box says “Great Value” brand and the name of the cereal is “Cocoa Cool”. The cereal looks the same.

The ingredients may be close if not the same. Is there a difference between the two? Obviously most shoppers can identify the generic version of a product. We also know the main difference between the two, prices. Most of us will also feel reluctant to purchase the generic version. The reason, quality or maybe taste. Some may have never heard of Cocoa Cool. We are familiar with General Mills and its product Cocoa Puffs. We have seen Sonny many time telling us he’s “Crazy for Cocoa Puffs. ” Many factors influence the choice of a company’s product line up over a competitor’s.

Whether it is the association (use) of a product, the lifestyle it perceives, or the catchy commercials, companies invest heavily into the market to establish brand equity. However, a competing rival that has been around almost as long as the brand is the generic label. The generic label has become a strong contender against the major brand. THE EVOLUTION OF THE BRAND There was a time when “the making of things remained… the heart of all industrialized economics” (Klein 3). The thought of tin factories with high tiled windows, networks of large machinery. Ship yards with welders.

Large steel bridges and interstates. Invention was the hammer and man was the hand, and the hammer met steel. Quality was massed produced, but mass production also brought many products. Many products needed self-identity. The brand was the company and the advertisement, “one vehicle used to convey that meaning to the world” (Klein 7). Companies had to separate themselves from the next competitor. If not, you were going out of business. Brand knowledge was establish with no fault of its own. BRAND KNOWLEDGE HAS ITS PLACE Even though a brand was establish out of need, brand knowledge serves a purpose to the consumer.

Brands offer security, quality, facilitates the decision process, reduces risk, and creates a social status (Fustinoni-Venturini, Gonzalez- Benito, and Martos-Partal 74). “Strong brands offer an important, intangible asset that grants firms a marginal cash flow… greater customer loyalty… opportunities for brand extensions” (Fustinoni-Venturini, Gonzalez-Benito, and Martos- Partal 73). It is quite obvious companies see branding as an important aspect. It is vital to their longevity. Large companies pay quite a bit of money to ensure that longevity as well.

According to Satel and Lilienfeld companies are paying marketing groups to find that niche into what makes you choose one brand over another. Those marketing groups using techniques such as polling, eye tracking devices, and fMRI brain wave studies. A single fMRI brain study can cost up to up to $50,000 (Satel, Lilienfeld, 18). Companies had spent $114 billion in advertising in 2011 (Satel, Lilienfeld 2). Major companies also put a large amount of money back into the market. They have to hire individuals to make, sell, and market. Some are seen as sponsoring events.

These companies have to invest in research and development to create the next line of products. Without these companies, a lot of the products we have now may not have existed. GENERIC PRODUCTS NO LONGER TAKES THE BACK SEAT Most people associate generic products with food, but stores have also produced products under their name (Walmart-“Great Value”, Publix-“Publix”, Lowes-“Lowes”). How many times have you seen an advertisement for store brand versions? You may see a flyer with generic items alongside brand items. You may see a commercial that includes a few items, but they are normally promoting that store and not necessarily their product.

There doesn’t seem to be much marketing going into the store brand versions. They tend to simulate their vendors, there may not be as much money going into research and development. They don’t readily sponsor events. They don’t offer any particular lifestyle. So why generic? People look to generic products as an alternative to name brands for pricing. Most readily assume you are receiving an inferior quality product in exchange for price. Klein made a good point when she spoke about consumer spending habits, though her message was related to the immediate post 1980’s recession, “bargain-concise shoppers… ere starting to pay more attention to price than to the prestige bestowed on their products” (Klein 18).

Most individuals still feel like they are a post-recession. Overall they assume lower pricing is more important than quality or even taste. This is changing. Generic products have improved in quality over the years since they were first introduced. This has allowed store brands to offer more than just one product; a line- up. One out of every four products purchased in the United Stated represents a generic brand (Fustinoni-Venturini, Gonzalez-Benito, and Martos-Partal 74).

Food taste tests were conducted in Spain to determine if participants could determine the difference between generic labels and brand labels. Applicants were not made aware which product was which. The tests showed that generic labels were considered comparable to brand labels in most instances and sometimes the quality even better (Fustinoni-Venturini, Gonzalez-Benito, and Martos-Partal 77). Even major brand companies recognize this. Scott Bedbury, vice president of Starbuck’s marketing, speaking about the differences between products; “consumers don’t truly believe there’s a huge difference between products” (Klein 28).

With improvements in quality along with favorable pricing, generic brands are more popular than once perceived. Companies had to separate themselves from the next competitor. Brand knowledge was established out of this need to distinguish. Over the years, brand knowledge became important to the consumer. It provided several factors that allowed customers to make easy choices when making new purchases, provided wealth to the free market, and allowed the development of new products that would not see be seen under any other system.

Other companies sought to create products under a generic label alongside their vendor’s version in their retail stores. Many consumers saw these products as substituting lower quality for lower price. Studies have shown that when comparing generic food labels with brand labels, consumers had a hard time distinguishing the two. Generic products may never replace brand names, but they certainly are proving themselves against those brand names.