H.E.B Case Analysis

1715 words 7 pages
H-E-B Own Brands
History and challenges

H.E.B, the 11th largest grocery chain in United States, started 30 years ago. When the company was started, it was a predominantly private label company. Recognizing the customer drawing power of national brands, H.E.B took crucial steps to build a strong national brand presence. HEB was known for its superior quality products, its customer service and a broad assortment of merchandise. Additionally the company’s focus on delivering on its promise of everyday low prices, especially to the low income households that it catered to, was amongst its most critical success factors. 1. Competition :

In the 1990s, HEB faced a number of challenges, those in the face of increased competition
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HEB brand products should be priced distinctly above the Hill Country Fare Brand to position the 2 brands more broadly in the minds of the consumers. Another area that can be considered based on further customer research is the level of brand awareness of Hill Country Fare. It could be possible that customers are simply not aware that Hill Country Fare is an HEB private label. The bottles that contain the Hill Country Fare logo seem too cluttered and do not seem to bring out the brand image very clearly compared to National brands (see figure 2)

To maintain its competitive position in the marketplace w.r.t. to its competitors, HEB needs to continue to invest in its manufacturing facilities to constantly produce innovate products that cater to the Southwestern palate and ensure the quality standards are stringently followed. Currently, Own Brands share to profits are 19% and the management would like this to be increased to a target - 30%. To this effect, HEB should continue to invest in its most profitable categories i.e, Ice Cream, Flour, Canned Veggies and Frozen Vegetables– (see figure 1)At the same time, HEB would need to price National brands competitively to maintain its everyday low prices guarantee, even if it means cannibalization of profits from its Own Brand. Although in some cases this might prove unfair to other National Brands (as stated in the Green Giant example in the case), to maintain its competitive position HEB must continue to