What are examples of identical (or nearly identical) products sold at different price points?

In the U.S., you can generally find the most examples of identical or nearly identical products sold at different price points in chain drug stores, grocery stores, and hardware/home improvement stores. Why? Because chain stores in each of these categories almost always sell a major brand version and a private label (store brand) version of very similar products. They are known as Consumer Packaged Goods (CPG).

For example, most drug stores sell Bayer brand aspirin, but they also sell aspirin under their own name at a lower price. The same is true of hundreds, possibly thousands, of other over-the-counter and prescription drugs in their stores, from bandages, cough drops, and antacids to sleep aids, athlete’s foot treatments, allergy medicines, and more.

At major U.S. grocery stores, you’ll find Campbell’s and Progresso soups, but the store’s own brand of soup will be right beside them and cost less. And similar name brand/private label scenarios play out for other canned goods – from peaches and green beans to sliced mushrooms and infant formula – as well as for paper products, butter and milk, frozen foods, pet foods, laundry detergents, meats, breads and cookies, and more.

And at a major hardware store like Ace Hardware, you will often find national brands of house paint, bug spray, drain cleaner, grass seed, and hand tools, with Ace’s own almost identical private label versions of each right beside them, but with a much lower price tag.

How does this happen? This is a broad generalization, but usually the national or international brand is the innovator of the product – meaning that they either invented the product or they created a significantly better or different version of it at some point – and the store brand/private label version either copied the major brand or licensed it from a private label manufacturer. The major brand had development costs, nationwide advertising costs, distribution costs, placement fees, and more, requiring them to charge $XX amount if they are to make a profit and stay in business. The private label version copies the major brand almost identically, so development costs are low, plus has much lower advertising costs and no placement fees, so they can charge a lot less and still make money from it. It’s actually a mutually beneficial arrangement, but I won’t go into that here.

And here’s a twist: The lower priced store brand version of a product is often also made by the same manufacturer of the premium, brand name version. That’s not always true, because at times the store brand is made by a competitor that reverse-engineers the makeup of a premium brand to make their own, but it is true in many cases.

Why do they do that? Because major manufacturers know there will always be customers who want or need a lower price, so decades ago they figured out that they may as well be the ones who also sell the cheap version of their famous brands. Plus, when they make the cheap version as well as the premium, they can control the quality of the category, which can be especially important if you are trying to establish – and get people to trust – a new expansion category.

Hope that helps.

Why are American brands everywhere?

Your question seems simple, but the answer is actually a bit complicated because it's a mix of circumstances and efforts that have led to American (U.S.) brands being in so many places – and so popular – around the world.

First, while Americans do like to think we are great at branding, we would have nothing to brand overseas if not for our government's trade agreements that make our products available worldwide. And those agreements have come about for different reasons over the last 100 years or so, but many of them have gained strength from our mix of safety regulations, natural resources, economic strength, university-based research, political stability, corporate lobbying, and strong tourism.

Then again, while we love to give ourselves awards that say what marketing and branding geniuses we are – Holy Moly do we love to give ourselves awards! – the global strength of our movie and television industries has also helped tremendously. After all, our movies and TV shows have been showing and later mentioning U.S. branded products for decades, which has helped normalize and popularize them wherever the movies and TV shows appear.

However, the U.S. can also only sell brands overseas if the people living in those other countries want to buy them. So most brands that we export have to be among our best (within their category) to compete and, yes, we need to be good branders by learning what each market needs or will enjoy about our products, so that we can market them strategically.

Note that a key part of those strong trade agreements is our own willingness to also import a lot of other countries' brands. So while you may see what seem like a lot of American brands in Shanghai, we are also seeing (and buying) a lot of Sony, Samsung, Dos Equis, Jaguar, IKEA, Bertolli, and other non-U.S. brands in the U.S. because of those good trade relationships.

Last, keep in mind that due to the multi-national nature of business today, more than a few major brands that you may think of as “American” – Purina, Budweiser, Chrysler, Jim Beam, and Frigidaire, for example – are now actually owned by non-U.S. corporations. Those owners don't always sell the products in their home countries under those brand names, so how would you know? But that very fact further reinforces that the success of brands is often as much about the sales, regulatory, trade, and tax environments that are in place as it is about any particular "branding" efforts.

Why Do Companies Run Ads If There's No Certainty People Will Buy?

Why should a company spend money to advertise when there’s no certainty of the outcome? It’s an investment. It’s a bet, but one proven to pay off. It’s the same reason a person wears a nice outfit to a job interview, the same reason you smile at people when introduced to them, and the same reason you tell people about your product if you actually want them to buy that product. There is no certainty that you will get the job. No certainty the person you are meeting will like you (and vice versa). And no certainly people will buy your product. But it has been proven that making a good impression on people and giving them relevant information makes all of those prospects much more likely.

That’s what running ads can do. Good ads, that is. We once created a billboard ad for a health insurance company that yielded 27 calls (that we heard about) by 10 o’clock the first morning it went up. Eight of those calls were from employees who all said, without being asked, that it made them feel better about working for that company. That may not sound like much, but at the time, the company was trying to overcome some very bad news in that marketplace, so having employees feel better about being there – which was not even the point of the ad – was a real win.

The other nineteen calls all went into the sales department for follow-through and more calls came in later. The billboard also caught the attention of local media and both a newspaper and a television station did stories about it. The company was able to overcome its bad news within six months – not just because of that billboard, of course, but we know based on further customer research that it helped. That proved to be a very good investment, despite there being no certainty beforehand about what the outcome would be.

We’ve had similar experiences with radio commercials, TV spots, newspaper ads, and other media. Not long ago, a client asked us to create a B2B direct mail package + email + website landing page campaign that cost them around $150,000 – with zero certainty of making even one sale. But it did exactly the job they needed it to, piquing new interest and getting them in the doors of over 30 high value prospects that had not responded well to past efforts. They closed over $70 million in new contracts that summer, and they started new relationships with prospects who hadn’t known anything about them before.

Again, the ads, direct mail, and emails have to be very good to be effective, which we emphasize because too many companies have told us, “We’ve run ads before and they didn’t work.” Which does not surprise us at all, because there are A LOT of very poorly conceived, poorly executed ads put out into the marketplace every day, and no…bad ads do not work.

Look at it this way: Ads are not just sales tools. They are part of the sales process, but they are much more. They can do a lot to help a brand tell its side of who they are, what they stand for, and what they hope to achieve (or have achieved) for their customers. Ads are an investment just as a nice headquarters is an investment, a good web site is an investment, and hiring smart and talented people is an investment. And just like your people (or the web site or offices), if the ads don’t work out, you change them. But you don’t stop advertising, unless and until you are ready to go out of business.

How can Marketers Avoid Culturally or Racially Offensive Advertising?

If your product or your approach even hints at being culturally or racially offensive, it’s worth the time and expense to see how people in the real world react to it with focus groups, online surveys, or other exposure to limited audiences. We don’t recommend that every marketing idea or ad campaign undergo focus group review, but the world is a diverse and litigious place and people’s life experience, sense of humor, education level, exposure to new ideas, and so on all affect how they are likely to react to the ads, ideas, turns of phrase, imagery, etc. that a brand puts out. Having developed creative advertising and materials for many consumer packaged goods (CPG), health plans, hospitals, utilities, automobiles, electronics, retailers, and more for over 35 years, we can assure you that a little extra insight into how your target audiences will react to your concepts is never a bad thing.

With that said, it’s also our long-held belief that advertisers should not do every single thing that any focus group says to do. That’s one of the fastest ways to end up with the most boring, milquetoast, nondescript advertising on the planet. It would be like giving small children approval over what goes on the menu at your favorite French cafe or seafood restaurant. Unless you want the equivalent of chicken fingers and mac & cheese for the next few years, you will listen, but pick your own solutions. It can be constructive to hear how a focus group or other feedback provider responds — especially if some of those responses are gasps or shrieks at points in the ad that are unexpected by your team. That’s a sign of a pending, “Crap, why would anyone think we meant THAT?” moment.

Another option that marketers can take is to have 2–3 lawyers review and comment on the ad. In fact, most large corporations insist that their legal team see ads before there are broadcast or published. We actually recommend attorneys from outside the company, though, because you are more likely to get honest feedback from parties who don’t think their job is on the line if they deliver unwelcome feedback. Of course, you also will never create breakthrough ads by doing exactly what a lawyer tells you to – it’s their job to play it safe – but even if you intend to push the outer envelope of good (or bad) taste with an edgy ad, it’s smart to know where things stand before you go on air or to press.

Thankfully, most U.S. examples of culturally tone deaf or racially cringe-worthy ads that come to mind quickly for us are from many, many years ago. One of the worst was a laundry detergent ad where of course the owners of a laundry service were Chinese. Quite recently, though, an ad where a black woman becomes a white woman caused a stir, and should have. Many people today comment that “everyone is so oversensitive” as a broad whine about why today isn’t as good as “the old days.” But if more people are, in fact, overly sensitive today, perhaps that’s because too many were so blithely and insultingly insensitive in the past.

In the end, how far you decide to push before going “over the line” into truly offensive ideas or language is a judgement call, but your gut should “just say no” to the use of 99.9% of ethnic, gender-specific, or cultural stereotyping and other jabs. Because even if you are being light-hearted or sarcastic – and you think they know that – it’s rarely worth risking a lawsuit or high exodus of customers just to prove your point.