Every day, consumers are faced with the challenge of choosing what to buy and where to buy it. There are many things to consider: buy online or in-store? If buying from a store, go to a big box store or a small mom-and-pop shop? Oftentimes, these decisions are not only fueled by the product the consumer is in search of, but also everything this product and the company that produces it stands for. With the growth of large companies often comes consumer resistance leading to support for small, local businesses. People are increasingly choosing to use their money to support “the underdog” to give small brands a fighting chance to survive in the big world.
Knowing that the company a person chooses to invest their money in can be as important as the product itself, I was curious to discover what exactly is appealing about buying from a small company. I reached out to a representative sample of consumers and found that those who deliberately choose to purchase from a small brand like:
- Quality: “The quality is usually much better because [small companies] have time to inspect their products instead of mass producing & buying.”
- Supporting local: “You are supporting a more artisanal lifestyle rather than filling out the portfolio of a corporate giant.”
- Lower Prices: “Smaller brand, less advertising, lower retail price.”
- Customer service: “Typically the customer service is top notch since the company wants to retain customers.”
- Uniqueness: “I like that it is not mass produced so each product is unique.”
So what happens when a small brand is bought by a larger company? Is it best to keep the small company, niche feel or to use the large company to gain name brand recognition? Netflix recently released a documentary on Burt’s Bees, a skin and lip care company, called “Burt’s Buzz (2013)” which showcased the company from its founding until it was eventually bought out by The Clorox Company. Currently, Burt’s Bees continues to operate as a “small-feeling” company that caters to the environmentally conscious consumer; its philosophy is “The Greater Good” and focus lies on “people, profit, planet.” Burt’s Bees successfully maintains its vibe of a small, independent company – many consumers would likely be surprised to learn that the company is owned by a large conglomerate.
Take another example: Annie’s Homegrown. The producer of natural and organic snacks, Annie’s was purchased by General Mills last fall (September, 2014). Now, General Mills had a choice to make: continue to advertise Annie’s as the kids-love-it, bunny shaped mac and cheese producer, or label it as a General Mills product and leverage the loyalty towards General Mills to drive sales upward. General Mills & Annie’s Homegrown chose to do a combination of the two: leave the General Mills name off the Annie’s packaging, but publicly announce the acquisition in a personal message to all of Annie’s Facebook fans. While Annie’s and General Mills received many disappointed comments from customers, the brand individually replied to all comments and reassured its customers that Annie’s morals and ingredients would continue to stay the same.
The authenticity of the small brand atmosphere hinges on how consumers would feel if they found out the small brand they purchased from was in reality owned by a large company. I reached out to consumers and asked how they would feel if they bought a product from what they thought was a small brand but was actually owned by a large company. I discovered that consumers fell into distinct groups: they were either indifferent (“I wouldn’t care. As long as the product is good and in my price range I don’t care who owns it”) or passionately upset (“Deceived and ultimately distrustful of the large company”). [Click here for the (iM)merge analysis]
Given these two polarized groups, it is beneficial for larger corporations to make their smaller brands known under the umbrella of a bigger company rather than surprise their customers, leading to feelings of betrayal. While a large portion of consumers wouldn’t care about ownership so long as the product they purchased was of good quality, the consumers who do care would be deeply affected, often voicing that they would rather know that the brand wasn’t small than find out after the fact and feel deceived.
The more that the morals and mission of both companies align, the smoother the transition is in terms of consumer perceptions. If the values align and the perception of superior quality and price either stays the same or improves, the transition can be seamless and the small brand can flourish. Consumers need to know that although a small brand is no longer small, the core mission and values will remain the same – what they know and love is here to stay, regardless of the moving and shaking at the corporate level.