City and Gild: Premium brands should beware the temptation to "be more Aldi"

Andrew Mulholland
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Aldi: When you're shopping around, sometimes price is not the decisive factor (Source: Getty)
So the head of the Boarding Schools Association, Robin Fletcher, has apparently encouraged his members to be more like Aldi, and cut their prices to offer a budget version in an effort to appeal to a larger market.
If filling spaces were the issue for boarding schools, then this could be an approach you might consider, but it rather suggests there’s a linear equation between price and desirability, and I’m not so convinced of that argument - particularly in a category with such high emotional involvement (not only am I entrusting you with my child’s education, but she’s going to be living with you five days a week).
So while Aldi is undoubtedly a supermarket success story, their market share trades blows with Waitrose, and I’m fairly sure I know which one most of these institutions – or indeed any premium brands - would rather model themselves on.
And don’t let Lidl’s current campaign sway you, showing consumers who would rather purchase branded products choosing cheaper retailer own brands in blind taste tests, does not mean that, when their blindfolds are removed, they would actually purchase them instead. As poor old Pepsi knows to its cost (in blind taste tests they normally outscore Coke, but as soon as the blindfolds are removed, the balance swings back in favour of Coke).
The other challenge of course, is that the schools looking for more pupils are most likely the ones who can’t fill all their places, and presumably this is because their reputation (brand) isn’t as strong. Simply dropping prices won’t address the core issue, rather mask it.
So who should businesses and schools alike look to when trying to find out-of-category inspiration? I’m not necessarily advocating the old Stella Artois ‘reassuringly expensive’ mantra, but perhaps the current VW, ‘Well worth it’ Polo campaign is closer to the mark.

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