In-store labels of grocery chains like Safeway or Target are gaining market share through effective product positioning.

Despite Ries and Trout’s notions of “first-comer advantage” (advantages of which are well-described here), these house names are selling beside established giants like Heinz or Kraft. In fact, in-store labels are almost always the follower in any product. Strom (original article) credits the consumer shift to cheaper alternatives to the “forced frugality” of the economic recession.

However, this cannot be the sole reason for this trend; I have analyzed the elements contributing to success in terms of a SWOT analysis:

– Aided by external opportunity (economic recession), differentiated by product’s internal strength (low price)

-Actively Improving on product line’s weakness (consumer’s perception as lower quality, lack of strong brand name)

The grocery store is special market- brands of different levels of recognition get equal exposure on the shelves, unlike other industries that fight for strategic point-of-sale retail store locations.

How to choose the right pickle? In such a saturated market, product differentiation can be next to impossible. Thus, “Cost Leadership Strategy” is effective precisely because of that. Another example of how Differentiation Strategy failed can be found here. For luxury products, however, product differentiation is key (example).