Own label compensation

Some companies deliberately sell the same product for a much lower price, even though there is a real danger customers will find out.

Why?

* To recruit customers to the brand (Boss selling ‘seconds’ in factory outlets can attract people who may trade up next time to higher price products)
* To clear out stocks
* To help cover fixed costs

It all fits into a compensation pricing strategy.

Here are some products in Aldi that are (apparently) just a cheaper version of the same thing:

Biac, Biac drink –> Müller
Big-Bumix fruit gummies –> Haribo
Desira yogurt –> Bauer
Gartenkrone vegetables –> Bonduelle
Gletscherkron muesli –> Schneekoppe
Grandessa ice cream –> Schöller
Haselnut spread –> Onken
IBU crisps –> Bahlsen
Milceso mozarella –> Zott
Milfina –> Breisgaumilch
Pizza –> Alberto
Royal Camembert –> Alpenhain
Chateau chocolate –> Storck
Tandil washing powder –> Henkel
Video cassettes –> TDK

Some suggestions, if you don’t want to lose customers:

* Sell under a different brand name
* Don’t sell in the same place at the same time (avoid cannibalisation)
* Try to change the formulation/features so that you don’t undermine you ‘main’ product
* Don’t get found out!

I found out about a certain brand of sparkling wine (which I won’t name) – it’s the same in Aldi. Guess what: it’s one of my favourites now – at a fraction of the price.

See also: checked4you, and enjoyshopping

Alex Woodruff

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