Simple Stars
2 Comments Published by Frank Lane September 5th, 2007 in Differentiation, Focus, Innovation, LinkageKeep It Simple Stupid. How many times have we heard that? Enter Hannaford Supermarkets, a chain out of Maine, with a whole new way to simplify.
Hannaford has differentiated itself by rating products on the shelf (25,000 so far) as to their nutritional value. No nutritional value, a product gets zero stars. Most nutritional value, an item gets three stars. Hannaford’s Guiding Stars program has built sales of 3-star products and sales have dropped on zero-star products. For example, skim milk up +5%; whole milk down -4%. Could not get the numbers on whether overall sales are up or down, but my guess is “up” because they have announced plans to rate additional items.
Consumers love it because similar to menu boards in fast food restaurants, shopping is now easier and faster at Hannaford’s. Pundits will argue that this is a health positioning and that is what is building Hannaford’s business. I think that it is a “simplified” positioning. We have seen this “make it simple” principle build business in many categories.
Hello Frank,
My wife and I now scan virtually all labeling so that we avoid purchasing items with trans fats, high fructose corn syrup etc. I LOVE the idea of seeing immediately a score of the nutritional value.
I visited the company’s website at http://www.hannaford.com. If they asked you “how could we improve our brand?”, I am wondering what you would suggest:
Regarding naming and changing a brand’s name :
Some companies are fortunate to pick good-to-great brand names right from the starting gates such as SPANX (that you mentioned in your book). In the grocery arena, WHOLE FOODS and SUPER-VALU (a chain in Canada) might be considered good examples so long as they focus on healthy, wholesome food and low prices, respectively.
Unfortunately, many start-ups name their companies after themselves, their parents (our family business was named after my mother) or where the company is based. Too often, the names have nothing to do with the business they are in or the brand they are trying to build.
For an established company that has been in business a number of years, would it make sense to change the name to strengthen the brand with the long-term in mind? Although there might be a bit of pain in the short-term, if one can change the brand from an O.K. brand to a KILLER BRAND, it would seem the change would be worthwhile.
For example, if Hannaford had ambitions to expand nationally, would it be an idea to consider changing the company name, or at the very least opening new stores under another brand name? For example, the NEW brand name could be more closely linked to their existing slogan (or a slightly revised version) “Guiding Stars: Nutritious Shopping Made Simple.”
Or, would it be better to say, they have invested in the name Hannaford, they should just stick with it and focus on building the brand in other ways.
Look forward to hearing comments!
Ernst
Well, I try hard not to solve problems until I have the facts, which we don’t have here.
But I offer that the problem is not the name of the supermarket but the name of the program. There are multiple “STAR” markets all over North America, including STAR Markets owned by the very same SuperValu that you reference.
So Hannaford has a great program potentially linked more strongly to a competitor than to them.