Benchmarking is about product performance. A brand that conducts a benchmarking process will be able to determine their products’ performance.
Recall the last time you purchased an item from a retail store. What did you think about? Did you ask yourself: "How will this product perform?" or "Why did the retailer decide to sell this particular product"? Furthermore, did you consider the fact that this product may or may not be the best product for you?
No matter the item, some of these thoughts are considered by the everyday consumer upon making a purchasing decision. As online shopping and the growth of technology continues, consumers are becoming more educated, which influences their purchasing decisions. Answering questions like these is essential to establishing brand identity and loyalty; ultimately, driving success for many brands and failures for others.
But what does all of this mean? How can retailers and brands adapt to give the educated consumer what they want?
The answer comes in a simple, but vital process: benchmarking. Creating brand loyalty is the most important factor for establishing and continuing a brand, whether it's for a national or private label. In the world of private brand labels, this point is even more important. But why? According to the Private Label Manufacturers Association, private brands account for more than 20 percent of all retail units sold and their sales are increasing, by almost 3 percent in the past year. The growth of the private brand is not going away. What does this mean? Private brand benchmarking is becoming a mandatory tool in the retailer's tool box. In fact, the growth of private brand has increased so much that many consumers are not even aware that certain products fall under private branding.
Benchmarking is about product performance. It's determining how a brand wants its product to look in the consumer's eyes. It's comparing the product to the competition and ensuring it meets a certain level of execution.
But aren't there standards that products have to meet to be sold? Yes, however, "standards" are only minimum standards, barriers to entry. These standards do not make a great product better. Instead, these standards simply allow a product to enter the market. Additionally, these standards are generally based around technical elements of the product. They often have little emphasis on what a consumer deems important to a product. This is where benchmarking is different. Benchmarking goes beyond standard testing. It gives you test results that determine which is the better performing.
For example, say you want to manufacture and sell green apples. Standard testing may only set a minimum requirement that the product must be an apple, allowing any type of apple to pass onto your shelves. Benchmarking will make sure that a brand is always the delicious green apple you desire.
By only relying on standard testing, a brand can enter the market but will likely underperform compared to other brands, especially those that perform benchmark testing. Whether it's a national brand or private brand, a brand that conducts a benchmarking process will be able to determine their products' performance, focusing on what is important to a consumer, positioning the brand and product exactly where they want on the market.
The last thing a brand or retailer wants is to launch a product that underperforms, negatively impacts customers, and tarnishes a reputation. Benchmarking prevents this.
While this information seems directed at the retailing industry, it applies directly to consumers' shopping habits. As private labels continue to grow and certain brands begin to benchmark while others don't, consumers need to think before they buy. Consumers need to consider the brand's reputation, how previous products have performed, and what THEY want out of the product. After all, the performance of the product is why they buy, right?
Have you ever wondered about the benchmarking process? Have you found a brand you are either loyal to or won't purchase again? Please leave a comment or question below and one of our experts will get back to you.
Today's expert blogger is Mark Flickinger, a Manager in Intertek's Product Performance Consulting group. Leveraging both his engineering and business school background, Mark conducts product performance analysis using price, quality and reliability to help clients make better business decisions. He does this by evaluating different suppliers in a single product category to determine which products will perform best for the client's customers. Mark earned his B.S. in Engineering from Princeton University and an M.B.A. from The University of North Carolina Kenan-Flagler Business School.