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    Private Label Vs Brand

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    Sumit Anand
    Private label products are an attractive option for retailers because they have high margins, allow retailers to reduce dependency on national brands, and the product categories they appear in have large, growing sales. Private labels have been available for many years, have consistent quality, and their quality compared to national brands is improving. Price gaps between national brands and private labels are wide due to high promotional spending on national brands, reducing their price credibility. For national brands to counter the threat of private labels, they must invest in their brand, innovate their products, build trade relationships, manage price spreads strategically, and utilize sales promotion tactics.

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    Private Label Vs Brand

    Uploaded by

    Sumit Anand
    33 views5 pages
    Private label products are an attractive option for retailers because they have high margins, allow retailers to reduce dependency on national brands, and the product categories they appear in have large, growing sales. Private labels have been available for many years, have consistent quality, and their quality compared to national brands is improving. Price gaps between national brands and private labels are wide due to high promotional spending on national brands, reducing their price credibility. For national brands to counter the threat of private labels, they must invest in their brand, innovate their products, build trade relationships, manage price spreads strategically, and utilize sales promotion tactics.

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    Private Label vs Brand

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    Private label products are an attractive option for retailers because they have high margins, allow retailers to reduce dependency on national brands, and the product categories they appear in have large, growing sales. Private labels have been available for many years, have consistent quality, and their quality compared to national brands is improving. Price gaps between national brands and private labels are wide due to high promotional spending on national brands, reducing their price credibility. For national brands to counter the threat of private labels, they must invest in their brand, innovate their products, build trade relationships, manage price spreads strategically, and utilize sales promotion tactics.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    33 views5 pages

    Private Label Vs Brand

    Uploaded by

    Sumit Anand
    Private label products are an attractive option for retailers because they have high margins, allow retailers to reduce dependency on national brands, and the product categories they appear in have large, growing sales. Private labels have been available for many years, have consistent quality, and their quality compared to national brands is improving. Price gaps between national brands and private labels are wide due to high promotional spending on national brands, reducing their price credibility. For national brands to counter the threat of private labels, they must invest in their brand, innovate their products, build trade relationships, manage price spreads strategically, and utilize sales promotion tactics.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    PRIVATE LABEL VS BRAND

    SUMIT ANAND
    JN180162
    PRIVATE-LABEL PENETRATION

     The product is an inexpensive, easy, low-risk purchase for the consumer.


     It is easy to make from commodity ingredients.
     It is perishable, thereby favouring local suppliers.
     Product category sales are large and growing, so private labels can more easily garner sufficient volume to be
    profitable.
     The category is dominated by a few national-brand manufacturers, so retailers promote private labels to reduce
    dependency on them.
     It has more margin than national brands.
    PRIVATE-LABEL CHARACTERISTICS:

     Private-label goods have been available to consumers for many years.


     Distribution is well-developed.
     Variability in quality is low.
     Quality in comparison with national brands is high and improving.
     Consumers have confidence in their ability to make comparisons about quality.
    PRICE AND PROMOTION FACTORS:

     Retail gross margins in the product category are relatively high.


     Price gaps between national brands and private labels are wide.
     National-brand expenditures on price promotions as a percentage of sales are high, raising price sensitivity and
    encouraging consumers to switch brands.
     The credibility of national-brand prices is low because of frequent and deep price promotions.
    STRATEGIES TO COUNTER PRIVATE LABEL

     Invest in brand equities-Managers must continually monitor how consumers perceive the brand.
     Innovate- technological upgradation-
     Using fighting brands-
     Build trade relationship-The best consumer goods companies should know more about their consumers and their
    categories than any private-label manufacturer.
     Manage price Spread-National-brand manufacturers must monitor the price gap both to the distributor and to
    the end consumer between each national brand and the other brands, including private labels, in every market.
    They must also understand how elastic the price is for each national brand—that is, how much effect changes in
    price have on consumers
     Exploit sales-promotion tactics-they can distribute coupons to households in areas where retailers are
    aggressively providing private-label products.

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