Recently, YouTube suggested a video of a fisherman "sticking" a fish on the back of another person. I say "sticking" because the fish adhered to the man's back, seemingly causing him pain while his companions on the boat laughed. These are remora fish, and it turns out this was not the only one, nor the first occurrence. These videos featuring the strange sucker fish have caused a sensation on the internet and have gone viral in the fishing community, the latest "challenge." In some of them, they even "stick" the poor fish to the boat's deck. Besides being morally questionable, what does this strange phenomenon have to do with marketing and private label brands of some supermarkets? The answer lies in the unlikely relationship between the remora and the whale of our tale. Allow me to explain it to you.
Let's start with the basics: private label brands aim to offer economical alternatives to popular brand products, often imitating them to the legal limit regarding design, product, and advertising. To understand the marketing strategy behind them, let's examine the case of Aldi's private label brand, Flying Power, and the original brand it imitates: Red Bull.
Some of you are not familiar with Flying Power because you can only purchase private label brands in the supermarket chain that produces them, to which they belong. But for others, it is a special brand, especially for those who consume Red Bull and shop at Aldi. Flying Power cannot be dissociated from Red Bull.
Both brands share "surprising" similarities. Seriously, the ingredients of both beverages are almost identical, with a minimal difference in the amount of salt between one brand and the other. The only major difference between them is their price, with a can of Red Bull being three times more expensive than a can of Flying Power, even though both contain the same product.
Caffeine: Carbonated Water, Taurine(0.4%): Sucrose, Glucose: B-vitamins: B3 (Niacinamide), B5 (pantothenic acid), B6 (pyridoxine), and B12 (cobalamin), Acidity Regulator (Citric Acid, Sodium Bicarbonate, Magnesium Carbonate) Caffeine (0.03%) and Artificial flavors and colors,
For Aldi to sell both its private label brand and Red Bull may seem counterproductive, especially when Red Bull is not just a competing brand but the absolute leader in the energy drink market. It would be even more surprising to place both brands side by side on the supermarket shelves. However, this is precisely what Aldi does. We know that supermarket chains carefully study every decision, So why does Aldi take this approach?
To dominate the international market, Red Bull has always used marketing value strategies. the more value you give, the more value you receive in return. To do this, you need to focus on understanding what customers value emotionally and rationally, their needs, problems, and desires, and offer products and services that meet those needs—help with value, bound with value, and lead with value.
Hundreds of brands struggle to stand out in the highly competitive energy drink market. In this situation, how can an energy drink brand succeed in being valued by consumers? Consumers value products, services, or brands based on four perspectives: the value as a solution, the market value, the value of brand identity, and the added value they provide. Energy drinks from different brands cannot provide any differentiation in value as a solution since they all offer the same thing: a revitalizing product for the consumer. They also cannot provide any significant added value apart from some sugar content or flavor variations, all targeting specific market niches. However, they cannot achieve real value for the mass of consumers with these variations.
But there is a way to differentiate oneself, one of the four we mentioned, and Red Bull is the king in this aspect. The only way to distinguish oneself in such a competitive market is by providing value in terms of brand identity. The value that connects on an emotional level with its customers. It is precisely there where Red Bull excels above its competition. Red Bull has built a strong and immense emotional bond with its customers through its marketing strategy. The brand value of Red Bull is so significant that even if it were to stop production for 5 years, if someone wanted to buy it, they would have to pay an unimaginable amount.
How did Red Bull achieve this? Red Bull has invested unlimited resources year after year in sponsoring all kinds of sports and cultural events, ranging from extreme sports to music festivals, such as motocross, freestyle, football, and Formula 1. By supporting these events, Red Bull has impacted an entire generation and, consequently, created enormous value for its customers, building a brand identity/culture that resonates with them deeply.
The company's most notable achievement was Felix Baumgartner's record-breaking jump from the stratosphere, which generated worldwide media coverage and publicity. Red Bull sponsored, organized, and invested 50 million euros in the project, creating an iconic image of Felix, in his astronaut suit, jumping into the stratosphere that captured the world's attention."
The strategy behind Private Labels
To analyze the strategies of private-label brands, we must do so from the consumer's point of view. After all, consumer perception is the only one that truly matters. What differences do consumers perceive between private label brands and the original ones?
We know that the ingredients of both beverages are almost identical. But a consumer's perception of the value of a product doesn't solely depend on this factor. What else do private label brands imitate from their originals? Let's take a look at the advertising line of Flying Power, which resembles Red Bull's most significant event. Who does it remind you of? Felix, is that you?
[Photo of Felix] [Photo of Red Bull advertisement]
And what do we find at the very heart of the brand, its name? When you think of the name Flying Power, what comes to mind? Exactly, "Flying Power" echoes the iconic slogan from Red Bull's TV advertisements, "Red Bull gives you wings." The resemblance is undeniable. It's as if Red Bull's DNA is woven into every aspect of the Flying Power brand.
Aldi knows that the energy drink market is oversaturated and that providing a value that distinguishes you from competitors is almost impossible. With Flying Power, Aldi has a different strategy. Instead of trying to stand out, they offer as a value proposition a product, a brand that closely resembles the industry leader, Red Bull, at a much lower price. With this, Aldi provides significant rational and emotional value to its customers with a product almost identical to Red Bull. It's a smart move that allows Aldi to offer the highest value available in the energy drink market to its customers at a fraction of the cost.
Red Bull is not the only brand; every big brand in the drink market has its "own" "private labels" to mimic them. Ask Coca-Cola about it.
And now, what do you guys weigh: is this a Coke? Or an Aldi Cola?
Let me surprise you—the big twist. Private label strategies, like the ones used by Aldi and Hofer, are also value-based marketing strategies like the ones used by Red Bull. Do you remember that at the beginning of this article, we explained how Value-based strategies focus on understanding what customers value emotionally and rationally to offer products and services that match them? Well, Aldi knows that its customers love Red Bull.
Thanks to this strategy, Aldi has become the leading discount supermarket chain in Germany and the third-largest supermarket in Austria. This strategy is not exclusive to Aldi; in fact, many companies across a wide range of industries have had great success using it. For example, Mercadona in Spain also successfully utilizes private label brands to achieve a market share of 27%, surpassing Carrefour in second place with 7.6%.
Offering private-label products raises serious legal and moral questions. From a brand value perspective, some may see it as appropriating the value the original brand has worked hard to achieve. From a market perspective, offering identical products at a lower price can be seen as diminishing the uniqueness of those products. It may result in a loss of value for the original brand. This is referred to as value destruction. However, from a consumer perspective, it can be seen as a democratization of value, offering quality products at a fair price for those with economic limitations.
This raises questions about Aldi's intentions. Is it about appropriation or value destruction, or are they focused on democratizing value for their customers? What is the purpose of copying the brand and selling it next to the original on the shelf? This is where the tale of the whale and the remora comes into play.
The Remora and the Whale
Remoras, also known as sucker fish, are creatures that evolution has endowed with such a complex and unique design that it seems hard to believe, to the point that they have become models of biomimicry. They have physical adaptations such as a suction cup on the top of their bodies that allow them to attach themselves to larger marine animals without causing any harm. Their goal is to obtain protection and access to food by attaching themselves to the bellies of whales, sharks, and other marine creatures. Remoras survive on the scraps of food left behind by these large animals, letting them do the work of traversing the oceans in search of the best food sources.
Is this article about marketing or biology? What does this have to do with Flying Power and Red Bull? Well, listening to the tale of the remora and the whale will give us a clue about it.
"Once upon a time, a greedy remora was fortunate enough to attach herself to one of the smartest and strongest whales in the ocean. This whale knew all the best food banks, and the remora was thrilled to enjoy the scraps left behind. However, the remora soon realized she could have even more by positioning herself in front of the whale's nose, where she could steal the biggest and best bites of food.
As time passed, the remora grew bigger and heavier from all the food she had been stealing, while the whale grew thinner and weaker from lack of sustenance. One day, the whale was so weak that it couldn't come up to the surface to breathe; on that day both the remora and the whale sank into the ocean's depths forever."
Sorry, but I never said it would be one of those stories with a happy ending that you tell your kids before bedtime. The story of the whale and the remora serves as a fable about the dangers of greed, and it poses a crucial question to us: could our remora live without its whale? The selfish actions of the remora led to its downfall and that of its host.
By understanding the behavior of remoras and how they attach to larger animals for protection and food, we can see parallels in the marketing world where private-label brands attach themselves to established brands to gain a competitive advantage. The tale of the remora and the whale is a metaphor for this strategy and its potential benefits and drawbacks.
Aldi doesn't want to compete with Red Bull, but it needs to be attached to Red Bull and live off the enormous value that Red Bull creates with its 1000 events per year. For Aldi, Red Bull is the whale of Flying Power in the vast sea of the market. It takes them to the food bank without exerting too much effort. Flying Power doesn't live off the value it generates but rather off the value of Red Bull. And therefore, it needs Red Bull to exist and not sink.
Now we understand why Aldi presents Flying Power attached as closely as possible to Red Bull, side by side on the shelf, can next to can, just like the remora attaches to its whale. When customers see both brands, they associate them with each other and establish an emotional connection. When you see "Flying Power" next to Red Bull, your brain thinks of Felix and "Red Bull gives you wings," and you understand that the value of Flying Power is similar to that of Red Bull but costs three times less. Aldi positions itself closest to the customers who, for various reasons, cannot afford the price of a Red Bull can—the remnants of its market.
The vast majority of white-label brands use this same strategy, often with great success. For example, in Spain, the white label products of Mercadona are often referred to not only as cheap but also with a phrase that is widely heard among those who are big fans of Mercadona (and there are many): "They have products of great quality!" Mercadona, as you may remember, holds a market share of 27%. This perception of buying inexpensive products but with the same quality as the originals comes precisely from not only often copying the ingredients but also, and especially, from that emotional connection with the original brand on which they are based.
When you buy and drink a Flying Power, you're buying and drinking a Red Bull at a good price. One could even argue that Flying Power isn't a brand; it's just a different presentation of Red Bull, a cheaper one. At least in the eyes of the consumer, it's the same.
Red Bull has created so much value that it can't help many brands like Flying Power from popping up. Red Bull is not the only one. Now go to Google and search for "Lego bootlegs." You will get millions of results. Whales and sharks dominate the sea, but they are not the only ones to be followed by suckerfish - turtles do, too. You don't need to be a big brand with a big name to have another company use the same strategy and copy or imitate you in every way they can.
Even if they are sometimes harassed, whales don't spend their time trying to fight the remoras and get them off their backs. It wouldn't be worth it; it would throw them off course, they would lose a lot of energy, and they would never win the battle against much smaller and more agile animals.
If you offer something valuable, sooner or later, you can't avoid others wanting to provide the same value; at most, you can postpone it. The reason is that there are people who, if they want to consume your products, repeatedly find that the lack of resources is an obstacle to doing so. There will always be customers who need to receive alternative presentations of your product, service, or brand that are more accessible in terms of time and money. And as long as there is a need, there will be an offer. The question should then be not how to avoid it, but how to benefit from it, how to turn a potential problem into an opportunity.
Daviz Munoz: Embrace the inevitable and turn it into a great benefit.
The remoras can even offer something positive to the whales; for example, they remove parasites, and it can be argued that private-label brands do too. Customers who can't afford to buy your product as often as they want to stay close to the brand by being able to buy a cheaper version of them. Someone who buys Flying Power or a Lego bootleg will continue buying the original brand occasionally. By doing so, you get them to continue in your value funnel through another company.
But there's an even more impactful way to benefit from private-label strategies. If you can't avoid them, own them. The remoras maximize food utilization by eating everything the whale cannot eat. Private-label brands do the same. You can use private-label strategies to maximize the value you can generate. Remember, the more value you give, the more value you receive. How can we be the most valuable self if we don't offer our products, services, or brand in presentations that are accessible to more people?
That's why many brands are secretly behind their own "private labels". Others don't even hide it and make it part of their business model. Having a cheaper presentation of your service or product automatically prevents poor-quality copies. Helping you bring more customers into your value funnel.
The example of Spanish chef Daviz Muñoz is given to illustrate this strategy.If you are from Spain, you will definitely know him; he has become one of the most important public figures in the country. For those who don't know him, Daviz was born on December 31, 1980, in Madrid, and he is the owner and head chef of DiverXO, a three-Michelin-starred restaurant in the Spanish capital, considered one of the best restaurants in the world.
Those who have had the opportunity to dine at DiverXO describe the experience as unique and unforgettable, a great theater where you participate, play, and feel like a child. The unique menu, not à la carte, consists of several dishes ranging from 15 to 20 or more, distributed over several hours. Dining at DiverXO costs 265 euros, and reservations must be made months in advance.
StreetXO is Daviz's second brand, the street version of DiverXO. StreetXO opened in Madrid in 2012 and expanded to London in 2016. Not only are the prices more affordable, averaging around 50 euros per person, but the experience is also different. The atmosphere at StreetXO is lively and informal, with an open kitchen and bar seating that allows diners to see the chefs in action. The restaurant offers à la carte options and does not require you to spend several hours there.
In 2016, Goxo, the third brand in the Daviz Universe, opened by offering a presentation of its "experience" in a home delivery version, also the most accessible of all in price, at €20-30.
- Brand: DiverXO; Price: 265 euros; Demanding experience: High; Michelin Stars: 3
- Brand: StreetXO; Price: 50 euros; Demanding experience: Normal; Michelin Stars: 1
- Brand: Goxo; Price: 20-30 euros; Demanding experience: Low; Michelin Stars: 0
Daviz Muñoz's value-based strategy achieves three main goals:
- Democratize value: It makes it accessible to many more people his dining experience and prevents them from suffering from poor quality and deception of many bad copies. Daviz takes control of the experience of all presentations of his product in any form.
- Avoid destroying value: as soon as his accessible menus get all these people into his value funnel. More people start their journey with a more accessible version of your experience and as they receive value they try the more complex versions. The cheap versions of your brand have the function of providing enough value to be able to break down the walls that these potential customers had to try the more expensive versions. All brands leverage the value of each other and thus not only avoid destroying value, but maximize the value they generate.
- Avoid value appropriation: It is much more challenging to sell a cheap version of the Daviz Muñoz experience if you have to compete against Daviz Muñoz himself.
You don't need to be a huge company to take full advantage of this strategy. You can do the same as a small or medium-sized service company by starting by offering your most accessible and free version of your value in the form of content. There are many more possibilities to offer value between your flagship, most valuable product or service, and free content - explore them all.
To maximize your value, start with the fundamental question in value-based marketing: How can my product, service, or brand be the most valuable to others? Create the most valuable version of your product, service, and brand. Create your Diverxo as a starting point and then ask yourself, how can I create a more affordable version regarding demanding experience and money? What prevents other potential customers from getting the most valuable product or service I offer? Why do people don't go to Diverxo? You just started the journey to be the most valuable version of yourself...and make sure that no leftover food goes to waste in the ocean of your market. How poetic.
- Identify your most valuable product or service.
- Identify your most accessible version of the value of the product or service.
- Create intermediate versions of value for your products or services that not only make them more economically accessible but also focus on making them more accessible in terms of time, resources, or convenience.
- Create a value funnel that connects all these brand presentations.
In conclusion, if you are as big as a whale, as dominant as a shark, or as valuable as a turtle, it's inevitable to be followed by remoras. Whales and sharks dominate the oceans, not the remoras. It would be best if you didn't worry about them (as long as they don't want to get under your nose and stay under your thumb). There is enough food in the ocean for everyone. But even better than ignoring them is to use them to your advantage.
Daviz Muñoz, Red Bull, Aldi, and Hofer have clearly and thoroughly studied their value strategies, leading them to success. Although they have very different ideas about success and how to deliver value they know exactly what their customers value and don't value and can answer the fundamental marketing question: what makes their products valuable?
Whatever your idea of success is, is there anything more beautiful than succeeding by being as valuable as possible to others? If you want to learn more about value-based marketing, here are six key questions (and answers) to understand why it has become essential for business success and how it compares to traditional marketing and branding.
Co-founder Tomorrow Brands
Marketing and branding strategist
Passion for storytelling