The U. S. fresh-meat industry has historically been an unbranded market segment, but in recent years, according to The Wall Street Journal article "Meat Industry Launches Campaign... ," there has been a trend among several industry producers such as Tyson Foods, Inc.
and Hormel Foods Corp. to begin branding fresh-meat. What is the value of branding for the $60 billion fresh-meat industry? Branding supports at least two of the industry's current goals: to promote and sell a new class of fresh-meats and to attract and retain new customers. Branding initiatives will create shareholder value for a firm by reducing the volatility of its revenues and by accelerating its cash receipts. Perhaps the most critical result of product branding is that it differentiates a "commodity" product in the eyes of consumers. Branded products aim to provide consumers with additional utility by offering products of superior quality.
Hormel specifically targeted the "under 30" market with its new line of "heat and eat" meats. It not only attracted new customers, but it also achieved greater profit margins through its branding efforts. In the fresh-meat industry, quality could be defined by a product's taste, durability, and / or its overall consistency. Once consumers recognize a brand for its superior quality, a pattern of brand loyalty will develop. Brand loyalty can protect a company's market share from other branded and non-branded competitors and result in both higher margins and more predictable revenues. If the "heat and eat" market represents a microcosm of the fresh-meat market, then Hormel's success highlights the opportunity for similar branding initiatives in the fresh-meat industry.
Another aspect of creating brand value is the leverage that it allows its producers to have at various distribution points. Producers of branded products can leverage its popularity with consumers to receive preferred shelf space. Prominent displays enhance product will enhance visibility and sales. Also we saw that there were a number of stores who were trying to promote their own brand and could afford to neglect brands from other producers or stores. This could, however, not be done to a superior brand, as they would have been forced by consumer loyalty to keep the product in stock for consumers who are loyal and wish to buy the product. As an analogy we can say that a retail store can come out with its own cola, but no matter how big it is, it cannot afford to not sell Coca-Cola.
Branding can also create the perception quality in the eye of the consumer for other products bearing the same brand name-regardless of whether the consumer has tried the product. Who of us would be wary of purchasing an unknown product with the name "Kraft" or "Kellogg's" on the box? Kellogg's, for instance, has established itself as a quality brand in the breakfast cereal market, and any future products will benefit from this reputation. Consumers now expect Kellogg's new products to be superior simply because they bear the brand name. A reputable brand name is a critical asset that allows firms to launch new products and target market segments quickly and effectively. As a result of branding, firms accelerate new product penetration and, consequently, revenue collection. Although it is difficult to quantify the exact value of branding in the fresh-meat industry, one can not understate the potential that it offers the industry.
Through branding, firms create platforms from which they can target specific markets and they establish a trusted name that can be leveraged when developing new products. Despite its historical classification as a commodity industry, the fresh-meat industry could greatly benefit from branding. "Meat Industry Launches Campaign To Turn Products Into Brand Names", by Scott Kil man, Wall Street Journal, 2/20/2002.