What is your recommendation for the Glacia product/brand?
From the consumer research results, HEB saw that there were two segments to target in thebottled water market: First segment valued imported water, second segment didn’t careabout imported water, more specifically, this segment valued Texas spring water.H-E-B Glacia, as an H-E-B brand, should be positioned as an upscale entry against importedwaters such as Evian. Imported water customers even preferred Canadian water to Frenchwater. So, Rob Price should do the following:1.Product - Packaging is very important. We understand from the case that valuablefeatures of the product don’t come forward in current packaging. Rob Price needs towork on a new packaging to make these features, such as Canadian spring water,more visible.2.Promotion - When prompted without packaging, only 19% of Glacia consumers wereaware the product was bottled in Canada. 64% believed it was from Texas. Evenwhen prompted with packaging, only 74% of customers recognized Canada as thesource. HEB needs to advertise this product to emphasize the Canada message.In-store promotion such as staff introducing and explaining the features would work.
Price – Increase the price to be higher than Ozarka but lower than Evian.
Placement - Move the Glacia product closer to Evian to give the impression that theyare in the same category.
What is the role of the H-E-B and Hill Country Fare private label brands? Howshould they be positioned with respect to other brands in the category? Howshould they be priced?
In order to answer the question, first we need to ask why retailers want to promote storebrands:Retailers carry store brand products because of the fact that they can sell them with ahigher gross profit margin. Store- brand products are generally cheaper than national-brandproducts because the retailer can optimize the production to suit consumer demand andreduce advertising costs. National brands are on average priced 40% higher than storebrands.In addition to increasing profits, store brands help to attract and retain customers. This isextremely important in the competitive supermarket business. If a consumer becomesaddicted to a particular store brand canned fruit or spaghetti sauce, for instance, they willreturn when they need to purchase these items again.Also, store brands enable retailers to get better deals with national brand manufacturers.If we go back to the case, we see that three major objectives of H-E-B (improvedprofitability, sales growth, deeper customer relationships) are in line with the informationgiven above.