STORE-BRAND VENDOR PURSUING ALLIANCES

JAMES TENSER

NEW YORK -- At least one store-brand manufacturer is not about to sit back and let national-brand manufacturers grab the whole initiative on alliances and category management.

Robert Vanderselt, president of consumer products at Pope & Talbot Inc., Portland, Ore., said his company is working actively to ensure its participation as co-captain or adviser in the disposable diaper and paper goods categories.

"We are making presentations and doing category analysis with the lion's share of our retail accounts," Vanderselt told Brand Marketing.

He said his company has established account relationships with Kmart and Dominick's supermarkets in which it participates not only in category planning, but in the tailoring of store-brand products to meet each retailer's consumer strategy.

Pope & Talbot's efforts to remain in the category loop with its retail accounts were revealed during a talk Vanderselt gave at a recent New York conference on business partnering, sponsored by the Strategic Research Institute.

"Retailers should think about category co-captains," he said, comparing the strengths that manufacturers bring to the equation.

By his analysis, national-brand manufacturers most often excel at consumer research and in translating the resultant learning into products. Private-label manufacturers are best at applying technology and at applying their skills to delivering against retailers' corporate brand strategies.

"If they link solely to a national-brand manufacturer, he will try to help the retailer grow the category, but on his own terms -- to maximize his own share. It is a sheer coincidence if it helps the corporate brand," he said.

Vanderselt urged retailers to use their store-brand suppliers to "layer in a second point of view" that is equally valid in its own context.

Kmart is one retailer that elicits such participation from its suppliers, said Vanderselt. "We are working on the inside with them, making recommendations. We are an active participant in their category management."

For Pope & Talbot, that means working in parallel with Procter & Gamble, which is Kmart's lead branded supplier for both the disposable diaper and household paper categories. "Obviously, we are never in the same room at the same time," he said.

As Kmart's corporate-brand ally in those departments, Pope & Talbot looks at and comments on proposed planograms, and participates in category planning as an "invisible merchandising partner," he said.

Vanderselt said his company is also "pretty far along" with Dominick's, in not just category management, but also in continuous replenishment.

"With Dominick's, we both are figuring out how we are going to launch a product, make it a success and target it against its particular customer group. National brands, by comparison, focus on the national picture," he said.

"From a technology standpoint, I am not aware of anyone else [among private-label manufacturers] doing CRP as we are doing it," he added, describing how Pope & Talbot is using scan-data based payment, which speeds the retailer's cash flow.

"That's where the category management linkage becomes really important -- in terms of forecasting with the retailer, with our brand. That is a function of what we are going to do, plus what other brands in the category are doing. Couple that with daily point-of-sale data and that becomes pretty powerful. We can do promotions and really manage it."

For a corporate-brand supplier, Vanderselt said, such activities must be integrated into product development as well, since each retailer's products can be custom-designed to fit its consumer marketing objectives.

The focus of any corporate-brand strategy, he said, is really to convince shoppers to give the products a try.

"In the product development area, we just absolutely can't ever have a product failure. No extraordinary R&D, no consumer advertising -- our focus has to be on awareness, education and trial generation."

Vanderselt added: "We think we can literally have a true partnership with a retailer because we literally have the same objective. The same goals; the same measurements; we pay out bonuses on the same numbers, which are based on what the retailer sells, not on what they buy."