NOSTALGIA, VALUE AFFECT CPG BUYING CHOICES

SARAH MULHOLLAND

WASHINGTON -- Seventy-six percent of consumers take a product's brand name into account before purchasing, and 49% report that a familiar brand name was the first or second most important element of the decision to buy, according to a new study released by the Grocery Manufacturers of America here.

In addition, the study found that consumers are willing to pay more for quality. When given the choice between a more expensive brand of high-quality product and a cheaper brand of average-quality product, 57% chose the brand of higher quality. Freshness and taste emerged as those characteristics most indicative of quality in consumers' minds.

Nostalgia is also a significant component of brand loyalty. In an open-ended question, 36% of respondents said they currently use a particular product because their family has used it for a long time.

According to the study, store-brand products are still battling a subpar stigma. Sixty-two percent of respondents agreed with the statement: "Store brands are lower quality." However, private-label lines continue to progress and the most successful retailers take an active stance on education and community involvement.

According to Johnny Johnson, president and owner of Community Pride Foods, a five-store operation in Richmond, Va., 63% of his grocery sales are in the store's Rich Foods label.

"The Rich Foods brand is a national brand here," Johnson said. "We have taken the time to educate the customers. We do not sell it as a second-tier product."

That education includes a television marketing campaign featuring employees of Rich Foods, a local company.

Indeed, the Rich Foods brand is a highly visible daily presence in Richmond. Community Pride runs a van service by which any shopper spending $40 or more gets a free ride home. All 26 vans are emblazoned with the Rich Foods logo, Johnson said.

Yet Johnson agrees with the GMA's findings in that shoppers are not necessarily looking for the lowest price.

"People think private label is all about low price. In truth, people are looking for value. They want to know, 'What are Community Pride and Rich Foods going to do with my dollar?' They see the name on the van, and they know."