bm private labels vs brands - grp 2
TRANSCRIPT
• Quality Assurance• Comfort & security• More value
• Needs time or ability to invest• Doubtful about quality
PURCHASE PROCESS FAVORS BRANDS
FOUNDATION FOR COMPETITIVE ADVANTAGE
RUNNING START
STRONG BRAND EUITY
RESULT OF DECADES OF
ADVERTISING & CONSISTENT QUALITY
TRAFFIC BUILDING POWER
ENHANCE STORE LOYALTY
REPRESENTATIVE OF STORE CHARACTERISTICS
NATIONAL BRANDS HAVE VALUE FOR RETAILERS
EXCESS EMPHASIS ON PRIVATE LABELS DILUTES
STORE STRENGTH
UNAVAILABILITY OF BRANDS IN STORES LEAVES CONSUMERS WITH A BELIEF THAT STORE HAD INCOMPLETE ASSORTMENT AND HENCE REDUCES STORE TRAFFIC.
What Should Brand Manufacturers Do?
•Brand manufacturers that do not yet make products for private labels, should not start to do so!
Risks of making private label
•Taking orders in categories where its own market share is weak.•These categories: lifeblood of the manufacturers sales
When Choosing to Private Label
•Evaluate private label manufacturing on full cost basis rather than incremental cost
•Efficiencies of selling private label contracts may be exaggerated – not accounting for competing bidders
•Companies may overstate the relative contribution of Private Label goods and thus understate the cost of cannibalization.
Reasons for Growth in India
Still in Nascent Stage
Market Share 10% vis-à-vis 40% in
Europe
Increasing acceptance due to Organized Retail Sector Growth
Other Factors of Growth
Influence of
Retailers
Favorable Channels
like E -
commerce
Improved Quality
Low pricing attracts
customers
Prominent PLs in Indian Organised Retail
Tasty Treat Fresh & Pure
Clean Mate
Sach
Indigo Nation
Scullers
John Miller RIG
Private Labels offering 47 Product Lines
Prominent PLs in Indian Organised Retail
Feasters (Food
Products)More(Grocers)
110 Per Cent
(Soaps, Detergents)
AU79(Deodorants)
Educate your retailers
Examine their purchaseScanner data
Subsidize in-store Experiments
Ration support
Summary
• Examples of Private Label
• Advantages of Private Label
• Brand Strengths
• Choosing Private Label manufacturing
• Scenario in Indian Market
• Evaluating Private-Label Business