Hbr Case H-E-B

How should Own Brands respond to competitive (Retailers) price promotions? When should H-E-B follow? What about national brand promotions?

H-E-B should match the their competitor’s prices because they need to honor their “Everyday low prices” stand standard. But now every everyone’s products

all

follow

competitor’s

promotions.

They

should

match

competitive price promotions on their core products, such as grocery perishables, meat, and seafood. Because H-E-B has 3 different private labels, H-E-B Brand with higher quality and relative price, Hill Country Fare with average quality and relative price, and Generic with lower quality and relative price. Therefore, when faced with competitive promotions from other retailers, Hill Country Fare could be better served

to compete by competing against other store brands without forgoing H-

E-B’s margin revenue.

Private labels are able to offer lower prices than national brands because they has have a much lower costs, for example, their advertising cost. They aggressively focused on reducing costs, without sacrificing quality very much. Their message to consumers is: we are have the same quality at a much lower price. Hence, if H-E-B has a good local market share on a particular core product, and in the same time a national brand starts

promotes a promotion, H-E-B should match compare the national brand

promotion side-by-side to let consumers be aware that H-E-B Own Brand is as good of quality or even better as the competitor.

What is the role of H-E-B and Hill Country Fare as the two Own Brand labels? How should these be positioned with respect to the other brands in the category?

The main reason retailers promote their own brand is the higher margin. In order to maintain achieve this main objective reason, they should keep their private label products cheaper than national brand products. In addition to increasing profits, store brands help to attract and retain their consumers. If a...