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Reserch project report Reserch project report Document Transcript

  • RESEARCH REPORT<br />ON<br />“CUSTOMER PERCEPTION TOWARDS PRIVATE LABEL IN COMPARISON WITH MANUFACTURING BRANDS”<br />Under the guidance of:<br />MR.SUSHIL KUMAR DIXIT <br />FACULTY OF <br />AIT- SCHOOL OF MANAGEMENT<br />GREATER NOIDA<br />SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMENT<br />By:<br />ANKUR MISHRA <br />PGDM (MARKETING & FINANACE)<br />M2009013<br />APEEJAY INSTITUTE OF TECHNOLOGY - SCHOOL OF MANAGEMENTGREATER NOIDA<br />Student’s declaration<br />I, ANKUR MISHRA, herby certify that the survey, data collection and analysis work related to research project on, “CUSTOMER PERCEPTION TOWARDS PRIVATE LABEL IN COMPARISON WITH MANUFACTURING BRANDS” has been carried out exclusively on my own efforts under the supervision of Mr. Sushil Kumar Dixit (Faculty Supervisor AIT, Greater Noida).<br />I hereby declare that this work was neither published nor submitted to any other institution. <br />Date:<br />Place:<br /> Ankur Mishra <br />PGDM 2ND YEAR<br /> M2009013<br />Faculty Guide’s Certificate<br />This is to certify that the research project title, “CUSTOMER PERCEPTION TOWARDS PRIVATE LABEL IN COMPARISON WITH MANUFACTURING BRANDS” carried out by Ankur Mishra a student of PGDM 2nd Year at Apeejay Institute of Technology – School of Management, Greater Noida, has been done under my guidance.<br />This is an original work carried by the said student to the best of my knowledge and belief and I recommend for its submission and consideration.<br />Date: <br />Place: <br /> Mr. Sushil Kumar Dixit<br /> (Faculty Guide)<br />Director’s Certificate<br />This is to certify that the research project titled “CUSTOMER PERCEPTION TOWARDS PRIVATE LABEL IN COMPARISON WITH MANUFACTURING BRANDS” carried out by Ankur Mishra a student of PGDM 2nd Year at Apeejay Institute of Technology – School of Management, Greater Noida, under the supervision of Mr. Sushil kumar Dixit (Faculty Guide) is a original work carried out by the said student o the best of my knowledge and belief and I recommend for its submission and consideration. <br /> <br />Date:<br />Place:<br />(Prof. R. K. Verma)<br />Executive Director <br />ACKNOWLEDGEMENT<br />There is always a sense of gratitude which one expresses to others for the genuine help they render during all phases of life. I would like to express my gratitude towards all those who have been helpful to me in getting this mighty task of research to a successful accomplishment.<br />First of all, I would like to be thankful to My Parents who always give Support to me. Then I also consider it a pleasant duty to express my heartfelt appreciation, gratitude and indebtedness to our respected faculty Mr. Sushil Kumar Dixit for his keen interest, invaluable pain taking & excellent guidance, patience, endurance, encouragement & thoughtful advice throughout the project work duration.<br />I am also thankful to all my friends who gave me constant & continuous inspiration to complete this project.<br />(Ankur Mishra)<br />CONTENTSS. No.TOPICSPage No.1Executive summary12Introduction2-93Literature review10-114Indian Retail industry12-224.1background12-154.2Current status15-204.3Contribution to the Indian economy214.4Future prospect in retail business225Story of private brand23-385.1The evolution of private label branding23-305.2The growth of private labels31-345.3Advantages of private label brand355.4Disadvantages of private label brand365.5Commercial objectives behind launching private labels37-386Statement of research objectives397Research Methodology40-428Research limitation439Analysis and interpretation of Data44-5810Findings59-6010Recommendations & Conclusion61-6211Bibliography63Annexure64-67<br />Executive Summary<br />During this research project, through primary research, I gathered a deeper understanding and the marketing of private label products. I utilized different researching methods to gather data on customer perception towards private label. These methods included collecting both primary and secondary data. Primary data was collected through personal interviews of customer. I also created a questionnaire that rated a consumer’s attitude and their perception towards private label in comparison to manufacturing brands. Secondary data was collected using the library at Apeejay Institute of Technology School of management and various research reports available on internet.<br />My goal for this project was to understand consumer perception towards private label products and make a comparison of customer perception with manufacturing brands. I did this through collecting primary data and analyzing secondary data. I collected my primary data using a survey that I initiated in Ansal Plazza and Great India Palace while consumers were shopping. I split the survey up between the different store tiers to get a better understanding of the consumer’s attitudes at different locations. I focused on how the consumer perceived private label in comparison to manufacturing brand. <br />This research project gave me confidence and helped me improve my research skills. I was able to cross reference the demographics of each store that I surveyed to draw conclusions on the data I collected. These conclusions lead me to recommendations. The skills that used for this project I can bring into the business world. <br />INTRODUCTION<br />Customer Perception<br />Perception<br />Perception can be describe as “how we see the world around us.” Two individual may be subject to the same stimuli under apparels the same condition, but how they recognize them, select them, organize them, and interpret them is a highly individual process based on each person’s one needs, values and expectations. The influence that each of these variables has on the perceptual process, and its relevance to marketing.<br />Definition<br /> “Perception is defined as the process by which an individual selects, organized and interpret stimuli into a meaning full & coherent picture of the world”. A stimulus is any unit of input to many of the senses. Examples of stimuli include products, packages, and brand names, advertising and commercial. Sensory receptors are the human organ that receives sensory inputs. All of these functions are called into play- either single or in combination-evaluation and use of most consumer products. The study of perception is largely the study of what we subconsciously add to or subtract from raw sensory input to produce our own private picture of the world.<br />Perceptual select <br />Consumers subconsciously exercise a great deal of selective as to which aspect of the environment-which stimuli-they perceive. An individual may look at some things, ignore others and turn away from still others. In total, people actually receiver perceive only a small fraction to the stimuli to which they are expose.<br />Nature of stimulus<br />Marketing stimuli include an enormous number of variables that affect the consumer’s perception such as the nature of the product, its physical attributes, the packages design, the brand name, the advertisement and commercial, the position of a print ad or the time of a commercial and the editorial environment.<br />a) Contrast: contrast is one of the most attention- compelling attributes of a stimulus. Advertiser often uses extremely attention getting device to achieve maximum, contrast and thus penetrate the consumer perceptual screen.<br />B) Expectations: People usually see what they expect to see and what they expect to see is usually based on familiarity previous experience or preconditioned set in marketing context people tend to perceive product and product attributes according in their own expectation.<br />c) Motives: People tend to perceive thing they need or want the stronger the need the greater the tendency to ignore unrelated stimuli in the environment. An individual perceptual process simply attunes itself more closely to those elements of the environment that are important to that person.<br />Important selective perception concepts<br />As the preceding discussion illustrates, the consumer’s “Selection” of stimuli from the environment is based on the interaction of expectation and motives with the stimuli itself. These factors giver rise to a number of important concepts concerning perceptions.<br />
    • Selective Exposure: Consumers actively seek out messages they find pleasant or with which they are sympathetic and actively avoid painful threatening ones. Consumers also selectively expose themselves to advertisement that reassures them of the wisdom of their purchase decision.
    • Selective Attention: Consumers have a heightened awareness of the stimuli that meet their need or interest and an owner awareness of stimuli irrelevant to needs.
    • Perceptual Defense: consumers subconsciously screen out stimuli that are important to for them not to see even though exposure has already taken place. Thus threatening or otherwise damaging stimuli are less to be consciously perceived than are neutral stimuli at the same level of exposure.
    • Perceptual Blocking: Consumers protect themselves from being bombarded with stimuli by simply” tuning out”- blocking such stimuli from conscious awareness. This perceptual blocking –out is somewhat to the mechanical “zapping” of commercial using remote controls.
    CONSUMER DECISION MAKING AND BUYING PROCESS<br />Marketing have go beyond the various influences on buyers and develop an understanding of how consumers actual make their buying decisions. Mainly the buyer plays these roles in buying decisions:<br />Initiator: a person who first suggests the idea of buying the product or service.<br />Influencer: a person whose view or advice influences the decision.<br />Decider: a person who decide on any component of a buying decision.<br />Buyer: the person who makes the actual purchase.<br /> User: a person who consumers or uses the product or service.<br />Decision Making Process<br />Need Recognition<br />The buying process starts when the buyer recognizes a problem or need. The need can be triggered by internal or external stimuli. In the former case, one of the person normal needs – hunger, thirst and sex- rise to a threshold level and become a drive. In the relative case, a need is roused by an external stimulus.<br />Marketers need to identify the circumstances that trigger a particular need. By gathering information from a number of consumers, marketers can identify the most `frequent stimuli that spark and interested in a product category. They can develop marketing strategies that trigger consumer’s interest.<br /> Information search <br />An aroused consumer will be inclined to search for more information. We can distinguish between two levels of arousal. The milder search state is called heightened attention. <br /> At this level a person simply becomes more receptive to information about a product.<br />At the next level, the person may enter active information search: looking for reading material, phoning friend and visiting stores to about the product. Consumer information sources fall into four groups<br />
    • Personal sources: family, friends, neighbors
    Commercial sources: advertising, salespersons, dealers, packaging<br />Public sources: mass media, consumers-rating organizations<br />Experimental sources: handling, examining, using the product<br />Each information source performs a different function in influencing the buying decision. Through gathering information, the consumer learns about competing brands and their features. <br />Evaluation of alternatives<br /> There is no single evaluation process used by all consumers or by one consumer in all buying situation. There are several decision evaluation processes, the most current models of which see the process as cognitively oriented.<br />Some basic concepts will help us understand consumer evaluation processes.<br />
    • The consumer is trying to satisfy a need.
    • The consumer is looking for certain benefits from the product solution.
    • The consumers see each product as a bundle of attributes with varying abilities of delivering the benefits sought to satisfy this need.
    Consumers vary as to which product attributes they see as most relevant and the importance they attach to each attribute. They will pay the most attention to attributes that deliver the sought benefits the market for a product can often be segmented according to attributes that are silent to different consumer group.<br />Purchase Decision <br />In evaluation stage, the consumer forms preferences among the brands in the choice set. The consumer may also forms an intention to buy most preferred brand. However, two factors can intervene between the purchase intentions and the purchase decision. The first factor is the attitude of the others. The second, factor is unanticipated situational factor that may erupt to change the purchase intention.<br />A consumer’s decision to modify, postpone or avoid a purchase decision is heavily influenced by perceptive risks. The amount of perceived risk varies with amount of money at stake, the amount attribute uncertainty and amount of consumer self-confidence.<br />Post purchase behavior<br /> After purchasing the product the consumer will experience some level of satisfaction ort dissatisfaction. The3 marketers job does not end when the product is bought marketers must monitor post purchase satisfaction; post purchase action and post purchase product users.<br />CONSUMER DECISION MAKING AND BUYING PROCESS<br />Need Recognition<br />Information Search<br />Cultural,Social,Individual andPsychological<br />Evaluation of Alternatives<br />Purchase<br />Post purchase Behavior<br />
    • Introduction to the Topic
    The topic of my research is “Customer perception towards the Private Label in comparison with manufacture brands”. It is not an easy task to judge the perception of the consumer as the time passes.<br />What the customer think about the private label brands?<br />What they think when private label compare with the manufacturing brands?<br />Private Labels Brands (PLBs), also called store brands (SBs), are goods owned and merchandised by retailers. A private-label product is a manufactured good that a retailer purchases from a supplier, with the intention of renaming, repackaging and selling it under the distributor’s own brand name.<br />Manufacturing Brands are also known as the National Brands. Brand name used by a manufacturer whenever that product is sold. A nationally distributed product brand name. May also be distributed regionally or locally.<br />LITERATURE REVIEW<br />Previous studies related to Private Label Brands<br />A review of previous studies related to PLBs brings forth researches carried out related to certain issues. For example researchers have found that one of the interesting phenomena concerning PLBs is the fact that their growth has been highly uneven across product categories (Hoch and Banerji, 1993). Dhar and Hoch (1997) found that by far the largest source of variation in PLB share across markets, retailers, and categories (40%) is due to the differences among product categories. Previous research investigating these across-category differences has looked at them mostly from the manufacturer and retailer perspectives. In studying the retailer economics of PLB programs, researchers have mostly examined factors such as the technology investments necessary, size of category, category margins, national brand advertising and promotional activity levels and so forth (Hoch and Banerji, 1993; Sethuraman, 1992). Thus, Hoch and Banerji (1993) find that PLBs have higher shares in large categories offering high margins, and where they compete against fewer national manufacturers who spend less on national advertising. The gap between national brands and PLBs in the level of quality also depends on the technology requirements in manufacturing that varies across categories (Hoch and Banerji, 1993). Research has been more limited on the consumer-level factors that make PLBs differentially successful across product categories. Some researchers studying consumer-level factors for PLB proneness--such as Richardson, Jain and Dick (1996)--have not studied across category variations at all. They have chosen instead to aggregate data across categories. Those few studies that have looked at cross-category differences from a consumer-factor perspective have sometimes omitted important variables: Sethuraman and Cole (1997). In this research, we focus upon these consumer-level perceptions of intercategory differences especially in food and grocery segment. By doing so, we hope to shed light on what has made PLBs successful overall, drawing implications both for retailers marketing PLBs as well as the national brands that compete with them. Thus, a review of previous studies undertaken in the area of PLBs indicates that, research has been more limited on the consumer-level factors that make PLBs differentially successful across product categories. Given the lack of studies undertaken in the area of understanding Indian customers’ attitude and perception of PLBs, the present study has been undertaken to gain an insight into how customers in India perceive PLBs. The findings of the study will be helpful for retailers to understand the importance of various factors in being successful with customers in the PLBs in food and grocery category.<br />INDIAN RETAIL INDUSTRY <br />Background<br />The Indian retail industry is divided into organized and unorganized sectors. Organized retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc. <br />India’s retail sector is wearing new clothes and with a three-year compounded annual growth rate of 46.64 per cent, retail is the fastest growing sector in the Indian economy. Traditional markets are making way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western-style malls have begun appearing in metros and second-rung cities alike, introducing the Indian consumer to an unparalleled shopping experience.<br />The Indian retail sector is highly fragmented with 97 per cent of its business being run by the unorganized retailers like the traditional family run stores and corner stores. The organized retail however is at a very nascent stage though attempts are being made to increase its proportion to 9-10 per cent by the year 2010 bringing in a huge opportunity for prospective new players. The sector is the largest source of employment after agriculture, and has deep penetration into rural India generating more than 10 per cent of India’s GDP.<br />Comparative Penetration of Organized Retail (in %)<br />India is the 4th largest economy as regards GDP (in PPP terms) and is expected to rank 3rd by 2010 just behind US and China. On one hand where markets in Asian giants like China are getting saturated, the AT Kearney's 2006 Global Retail Development Index (GRDI),for the second consecutive year Placed India the top retail investment destination among the 30 emerging markets across the world.<br />Over the past few years, the retail sales in India are hovering around 33-35 per cent of GDP as compared to around 20 per cent in the US. The table gives the picture of India’s retail trade as compared to the US and China.<br />Retail Trade – India, US and ChinaTrade (US$ billion)Employment (%) Shops (million)Organized sector share (%)India 180-3947122-3China 360122.720US380012.6-1615.380<br />The last few years witnessed immense growth by this sector, the key drivers being changing consumer profile and demographics, increase in the number of international brands available in the Indian market, economic implications of the Government increasing urbanization, credit availability, improvement in the infrastructure, increasing investments in technology and real estate building a world class shopping environment for the consumers. In order to keep pace with the increasing demand, there has been a hectic activity in terms of entry of international labels, expansion plans, and focus on technology, operations and processes.<br />This has lead to more complex relationships involving suppliers, third party distributors and retailers, which can be dealt with the help of an efficient supply chain. A proper supply chain will help meet the competition head-on, manage stock availability; supplier relations, new value-added services, cost cutting and most importantly reduce the wastage levels in fresh produce.<br />Large Indian players like Reliance, Ambanis, K Rahejas, Bharti AirTel, ITC and many others are making significant investments in this sector leading to emergence of big retailers who can bargain with suppliers to reap economies of scale. Hence, discounting is becoming an accepted practice. Proper infrastructure is a pre-requisite in retailing, which would help to modernize India and facilitate rapid economic growth. This would help in efficient delivery of goods and value-added services to the consumer making a higher contribution to the GDP.<br />International retailers see India as the last retailing frontier left as the China’s retail sector is becoming saturated. However, the Indian Government restrictions on the FDI are creating ripples among the international players like Wal-Mart, Tesco and many other retail giants struggling to enter Indian markets. As of now the Government has allowed only 51 per cent FDI in the sector to ‘one-brand’ shops like Nike, Reebok etc. However, other international players are taking alternative routes to enter the Indian retail market indirectly via strategic licensing agreement, franchisee agreement and cash and carry wholesale trading (since 100 per cent FDI is allowed in wholesale trading).<br />Current Status<br />The BMI India Retail Report for the first-quarter of 2011 forecasts that total retail sales will grow from US$ 392.63 billion in 2011 to US$ 674.37 billion by 2014. Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organized retail infrastructure are key factors behind the forecast growth. With the expanding middle and upper class consumer base, there will also be opportunities in India's tier II and III cities.<br />Mass grocery retail (MGR) sales in India are expected to undergo enormous growth over the forecast period. BMI predicts that sales through MGR outlets will increase by 145 per cent to reach US$ 21.35 billion by 2014.<br />BMI forecasts consumer electronic sales at US$ 29.09 billion in 2011, with over-the-counter (OTC) pharmaceutical sales at US$ 2.69 billion. The former sub-sector is expected to show growth of 55.6 per cent between 2011 and 2014, reaching US$ 45.27 billion, with projected double-digit growth of key products such as notebooks, mobile handsets and TVs. OTC pharmaceuticals, meanwhile, should increase slightly more, by 56.5 per cent throughout the forecast period, to reach US$ 4.21 billion.<br />China and India are predicted to account for more than 91 per cent of regional retail sales in 2011, and by 2014 their share of the regional market is expected to be more than 92 per cent. Growth in regional retail sales for 2011-2014 is forecast by BMI at 48.1 per cent, an annual average 15 per cent.<br />According to a McKinsey & Company report titled 'The Great Indian Bazaar: Organized Retail Comes of Age in India', organized retail in India is expected to increase from 5 per cent of the total market in 2008 to 14 - 18 per cent of the total retail market and reach US$ 450 billion by 2015.<br />Furthermore, according to a report titled 'India Organized Retail Market 2010', published by Knight Frank India in May 2010 during 2010-12, around 55 million square feet (sq ft) of retail space will be ready in Mumbai, national capital region (NCR), Bengaluru, Kolkata, Chennai, Hyderabad and Pune. Besides, between 2010 and 2012, the organized retail real estate stock will grow from the existing 41 million sq ft to 95 million sq ft.<br />Driven by the growth of organized retail coupled with changing consumer habits, food retail sector in India is set to be more than double to US$ 150 billion by 2025, according to a report by KPMG.<br />India's retail market is expected to be worth about US$ 410 billion, with 5 per cent of sales through organized retail, meaning that the opportunity in India remains immense. Retail should continue to grow rapidly—up to US$ 535 billion in 2013, with 10 per cent coming from organized retail, reflecting a fast-growing middle class, demanding higher quality shopping environments and stronger brands, according to the report ‘Expanding Opportunities for Global Retailers’, released by A T Kearney.<br />India has been ranked as the third most attractive nation for retail investment among 30 emerging markets by the US-based global management consulting firm, A T Kearney in its 9th annual Global Retail Development Index (GRDI) 2010.<br />Foreign direct investment (FDI) inflows between April 2000 and October 2010, in single-brand retail trading, stood at US$ 197.04 million, according to the Department of Industrial Policy and Promotion (DIPP).<br />Carrefour, the world’s second-largest retailer, has opened its first cash-and-carry store in India in New Delhi. Germany-based wholesale company Metro Cash & Carry (MCC) opened its second wholesale centre at Uppal in Hyderabad, taking to its number to six in the country.<br />Electronic retail chain major, Next Retail India, plans to open 400 showrooms across the country during January-March 2011 increasing the total number of retail stores to 1,000 by the end of the fiscal year 2010-11.<br />Jewellery retail store chain Tanishq plans to open 15 new retail stores in various parts of the country in the 2011-12 fiscal.<br />V Mart Retail Ltd, a medium-sized hypermarket format retail chain, is set to open 40 outlets over the next three years, starting with 13 stores in 2011, in Tier-II and Tier-III cities.<br />Reliance Retail, the wholly owned subsidiary of Mukesh Ambani's Reliance Industries, is set to open 150 stores by the end of March 2011 and double the number of stores across the country in all formats within five years.<br />Future Value Retail, a Future Group venture, will take its hypermarket chain Big Bazaar to smaller cities of Andhra Pradesh, with an investment of around US$ 1.54 million to US$ 4.41 million depending on the size and format.<br />RPG-owned Spencer's Retail plans to set up 15-20 new stores in the country in 2011-12.<br />Spar Hypermarkets, the global food retailing chain of the Dubai-based Landmark Group, expects to start funding its India expansion beyond 2013 out of its local cash flow in the country. So far, the Landmark Group has invested US$ 51.31 million in setting up five hypermarkets and plans to pump in another US$ 51.31 million into the next phase of expansion.<br />Leading watchmaker Titan Industries Limited plans to invest about US$ 21.83 million for opening 50 premiums watch outlets Helios in next five years to attain a sales target of US$ 87.31 million.<br />British high street retailer, Marks and Spencer (M&S) plans to significantly increase its retail presence in India, targeting 50 stores in the next three years.<br />Spain's Inditex, Europe's largest clothing retailer opened the first store of its flagship Zara brand in India in June 2010. It further plans to open a total of five Zara outlets in India.<br />Bharti Retail, owner of Easy Day store—supermarkets and hyper marts—plans to invest about US$ 2.5 billion over the next five years to add about 10 million sq ft of retail space in the country by then, according to a company spokesperson.<br />Policy Initiatives<br />100 per cent FDI is permitted under the automatic route for trading companies for cash & carry trading wholesale trading/ wholesale trading.<br />FDI up to 51 per cent under the Government route is allowed in retail trade of Single Brand products, according to the Consolidated FDI Policy document.<br />The Consumer Affairs Ministry has given the green signal to allow 49 per cent FDI in multi-brand retail. It has written a letter to this effect to the Commerce Ministry. "Multi-brand retail should be permitted with a cap of 49 per cent… A significant chunk of investments should be spent on back-end infrastructure, besides logistics and agro-processing," the Consumer Affairs Ministry had said in response to the discussion paper floated by the Department of Industrial Policy and Promotion in June 2010 on allowing 100 per cent FDI in multi-brand retail.<br />The Securities and Exchange Board of India (SEBI) has notified the increase in the retail investment limit to US$ 4,391.19 in initial public offers (IPOs). The new norms will be applicable to issues that have yet not opened for subscription.<br />Road Ahead<br />According to industry experts, the next phase of growth is expected to come from rural markets.<br />According to a market research report published in June 2008 by RNCOS titled, 'Booming Retail Sector in India', organized retail market in India is expected to reach US$ 50 billion by 2011. The key findings of the report are:<br />Number of shopping malls is expected to increase at a CAGR of more than 18.9 per cent from 2007 to 2015<br />Rural market is projected to dominate the retail industry landscape in India by 2012 with total market share of above 50 per cent<br />Driven by the expanding retail market, the third party logistics market is forecasted to reach US$ 20 billion by 2011<br />Apparel, along with food and grocery, will lead organized retailing in India<br />Further, the luxury brand in the country is estimated to be worth about US$ 4.06 billion-US$ 4.51 billion and is expanding rapidly driven by the growing aspirations of youth and income levels in the country. Most people constantly scale up spends as aspirations grow.<br />Thus, major international brands are in the process of expanding their retail presence. For instance, Paul & Shark now has two stores with Hyderabad and will have few more by next year, Zegna, another Italian brand, known for its formal wear and quality suits, is also expanding and Diesel will have seven stores in the country.<br />Meanwhile, European football clubs, including Manchester United, Chelsea and Liverpool, are increasingly scouting for partnerships in India to sell their merchandise and also set up chain of coffee clubs and theme shops.<br />The stationery retailing market in India is also witnessing steady growth due to the arrival of organized players in the business. It is estimated that the Indian office products industry is in the range of US$ 2.22 billion with stationery comprising US$ 666.89 million-US$ 889.19 million and growing at 30 per cent per annum. Future Group and Reliance Retail are some of the players who are already tapping into the sector and have launched brands such as Staples and Office Depot.<br />Modern retail – swot analysis<br />SWOT analysis is a tool for analyzing modern retailing. In this analysis, a study can be made regarding the strength, weaknesses, opportunities and threats of retail industry.<br />Strength of modern retail<br />
    • The benefits of larger organized retail segments are several. The consumers get a better product at cheaper price. So consumers get value for their money.
    • Employment opportunities both direct and indirect have been increased. Farmers get better prices for their products though improvement of value added food chain.
    • A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing working women population and emerging opportunities in the service sector are going to be the key growth drivers of the organized retail sector in India.
    • It has also contributed to large scale investments in the real estate sector with major national and global players investing in devolving the infrastructure and construction of the retailing business.
    • The trends that are driving the growth of the retail sector in India are low share of organized retailing and falling real estate prices.
    • Increase in disposable income and customer aspirations are important factors.
    • Increase in expenditure for luxury items is also vital.
    • The governments of states like Delhi and National Capital Region (NCR) are very upbeat about permitting the use of land for commercial development thus increase the availability of land for retail space.
    • The growth of sachet revolution emerges for reaching to the bottom of the pyramid.
    • The annual growth of departmental stores is estimated at 24%.
    Weakness of modern retail<br />The rapid development of retail sector is the sharp improvement in the availability of retail space. But the current rally in property prices, retail real estate rentals have increased remarkably, which may render a few retailing business houses unavailable. Retail companies have to pay high rentals which are blockage in the turn of profits. <br />Small size outlets are also one of the weaknesses in the Indian retailing. 96% of the outlets are lesser than 500 sq.ft. The retail chains are also smaller than those in the developed countries for instance, the superstore food chain, food world is having only 52 outlets where as Carrefour promotes has 8800 stores in 26 countries.<br />The volume of sales in Indian retailing is also very low. India has largest population in the world and a fast growing economy.<br />Opportunity of modern retail<br />
    • Global retail giants take India as key market .It is rated fifth most attractive retail market. The organized retail sector is expected to grow stronger than GDP growth in the next five years driven by changing lifestyles, increase in income and favorable demographic outline. Food and apparel retailing are key drivers of growth.
    • Rural retailing is still unexploited Indian market.
    • It can become one of the largest industries in terms of numbers of employees and establishments.
    • Indian retail industry has come forth as one of the most dynamic and fast paced industry with several players entering the market.
    Threats of modern retail<br />
    • One of the greatest barriers to the growth of modern retail formats are the supply chain management issues. No major changes are needed in the supply chain for FMCG products; these are well developed and efficient. For perishables, the system is too complex. Government regulations, lack of adequate infrastructure and inadequate investment are the possible bottlenecks for retail companies. The supply chain for staples is less complicated than the net groceries. But staples have a unique problem of non- standardization.
    • Organized retailing in India is yet to get an industry status.100% Foreign Direct Investment (FDI) is not permitted in retailing in India. Ownership of retail chain is allowed only to the extent of 49% but without FDI, the sector is deprived of access to foreign technologies and faster growth.
    • Lack of uniform tax system for organized retailing is also one of the obstacles. Inadequate infrastructure is likely to be an obstacle in the growth of organized retails.
    • The unorganized sector has dominance over the organized sector in India because of low investment needs.
    • Labour rules and regulation are also not followed in the organized retails. The sector is unable to employ retail staff on contract basis.
    • Problem of car parking in urban areas is serious concern.
    • Difficult to target all segments of society.
    • Emergence of hyper and super markets trying to provide customer with –value, variety and volume.
    • Heavy initial investment is required to break even with other companies and compete with them.
    • Retail today has changed from selling a product or a service to selling a hope, an aspiration and above all an experience that a consumer would like to repeat.
    • Retail chains are yet to settled down with proper merchandise mix for the mall outlets. Retailing today is not about selling at the shop, but also about researching and surveying the market, offering choice, competitive prices and retailing consumers as well.
    Contribution to the Indian economy<br />The effects of retail on Indian economy are:<br />Employment Generation<br />Retailing provides employment to making 8% workforce in India, because it is highly labour intensive. It has also patented to generate an additional eight million jobs, direct and indirect.<br />Development of small scale units<br />Retailing also helps small scale units to easy access market. They provide a platform for small scale unit’s goods. Retailing in India support 4 lakh plus medium handcraft manufacturers.<br />Growth of real estate<br />The requirement of space is one of the biggest demands, so the real estate has also grown over the last years. In the years to come Indian economy will also see the real estate sector climbing the steps of organized retail estate sector.<br />Future prospect in retail business<br />
    • FDI helps to meet the global economies, societies and domestic players to a closely integrative traditional village i.e. one is for all and all for one.
    • Division of labour, specialization, developing competition and innovation lead to economic growth.
    • Liberalization of trade and cross border mergers and joint ventures has also driving forces.
    • A significant size in the organized retail and is expected to grow from 3% to50% in the coming year.
    • Technology, management, expertise, market intelligence are also some of the opportunities to domestic business.
    STORY OF PRIVATE LABEL <br />The Evolution of Private Label Branding<br />Overview<br />The definition of private label branding has evolved significantly over time. Some would argue the term “private label” is a misnomer of great proportions. There is no question that the words “private label” acknowledges the birth, history and existence of generic and store brands. Yet, the term does not adequately capture the extent to which private label has progressed. Today's retail marketers are managing their proprietary brands with the same combination of care and innovation as manufacturers of national brands. <br />In recent years, retailers have been liberating themselves from the traditional definition of private label marketing as being the poor relative of national brand consumer goods, and, in doing so, opening up huge opportunities for private label branding. These opportunities require the adoption of a different set of marketing and branding practices to support and propel the retailer’s business and marketing ideals for its private label brands. <br />The key to successful marketing management for today’s retailers is to understand the contribution and role of their proprietary or “own” brands in the long-term business strategy and marketing mix of the retail store and consider both the supply side and the demand side of the equation. Effective category management can enable retailers to solidify and optimize supply-chain relationships. Strategic brand management goes hand in hand with these endeavors to establish sustainable points of difference in each aisle and segment within the store. It also spurs decisions about how to appropriately define the retailer’s “own” brand portfolio in order to galvanize consumers to connect and reconnect with its franchise in a compelling manner.<br />Historical Marketplace Dynamics<br />Private label brands were traditionally defined as generic product offerings that competed with their national brand counterparts by means of a price-value proposition. Often the lower priced alternative to the “real” thing, private label or store brands carried the stigma of inferior quality and therefore inspired less trust and confidence. Yet, they still grew and prospered by providing consumers lower priced options for what was often a low involvement purchase decision. Retailers continued to push more and more private label products into different categories of the marketplace because they represented high margins and the promise of profitability with little to no marketing effort. <br />Over the years, this proliferation of private label offerings perpetuated a myopic approach to private label brand management. Previously successful yet, currently flailing private label brands clued today’s retailer into some important pitfalls to avoid in proprietary brand portfolio management. Most importantly, these examples underscore a need for private label marketers to be cognizant of how their initiatives play a role in the overall marketing mix and the long-term definition and impact of their portfolio. <br />Historically, private label retailers appreciated that it was important to tout certain category and product benefits to incite consumers to purchase. Yet, rather than look at the consumer directly to understand his brand and product selection criteria, they took their cues from the national brand competitors that had already identified and manifested some of the category’s salient attributes and benefits through advertising, packaging and other brand messaging. The result was often a series of “me-too” private label positioning that strived to emulate the category leader. <br />This approach to private label management had resounding impacts on a category as a whole as well as the individual product offerings within it. By commoditizing their private label products, retailers undermined and commoditized a category’s overall potential. They adopted the role of the omnipresent, cheaper choice and often forced branded competition to lower their prices to compete, thereby erasing margins for national products and private label alike. It also created missed opportunities for all category players (manufacturers, suppliers or retailers), since they were not considering latent or untapped consumer needs that their category had the ability to fulfill.<br />A New Approach to Private Label Branding<br />In order to be truly successful, retailers must advance from the generic or store brand mindset of the past to a new private label paradigm. Many retailers have begun to describe their private label brands as “own” brands because there is recognition that these proprietary, exclusive offerings are tools that represent momentous power and potential for the retail store. <br />The term “own” brands acknowledges that today’s visionary retail marketers have powerful proprietary portfolios that they control and manage and there is potential to reap bigger and better rewards by taking a closer look at the way they orchestrate the role and expression of these brand offerings in the eyes of consumers in each product category. Those retailers who appreciate the magnitude of this brand opportunity have created a new industry standard in their realm of influence and activity. <br />“Own” brands are articulated and developed in a way that they not only fit with the brand promise of the retail store, but if effective, they also give consumer drivers a key point of departure to enhance and celebrate the overall retail brand proposition to keep consumers coming back for more.<br /> <br />Implications for Retail Marketers<br />1) Collaborative category management is vital. Strategic category management is instrumental for a retailer to realize its “own” brand goals and aspirations. It requires the development of a symbiotic relationship with manufacturers and/or suppliers to elevate relationships and further a mentality of partnership. <br />Contrary to the previous mindset of private label management, this approach does not commoditize the manufacturers' brands by offering a comparable product at a significantly lower price point. This would undermine the value inherent in the whole category and lower margins overall. <br />In this new way of thinking, the retailer and trade partnership becomes more about cooperation and less about the retailer negotiating with the manufacturer or supplier on price and listings. By working together, the parties involved can solidify trade relationships and ensure that the category as a whole remains profitable and emotionally appealing to the customer so that both private label and branded goods win. <br />In the spirit of effective category management, there should be collaboration in understanding and deciding how to optimize the product lines and SKUs that will progress the category definition as a whole and determine plan grams and shelving scenarios to rally the greatest degree of category interest and excitement from consumers. <br />2) Recognize that a salient consumer need should be the springboard for an “own” brand proposition. <br />The “own” brand promise should be defined as a holistic representation of resonant functional and emotional attributes and benefits. This ensures that it takes into account need states that are important to consumers and offers a credible point of difference from other category players. <br />By crystallizing a differentiated value proposition, an effective “own” brand considers the approach that national brands use to arrive at a holistic benefit proposition rather than the specific positioning they use. This furthers an “own” brand promise that has been informed by the competition, but is clearly not a “me-too” expression. It is also successful because it demonstrates a commitment to offer consumers multiple options and varieties with distinct attributes, benefits and price points. <br />3) Do not underestimate your power to leverage and own the consumer connection. <br />A successful “own” brand literally has the ability to own the consumer connection. If it is broadly defined, it has the capacity to strike a chord with consumers in multiple product categories. <br />Unlike national branded products, “own” brands are exclusively available through a specific retailer and can often transcend specific product categories because they use a consumer focus rather than a product focus as their brand foundation. <br />They have the potential to be magnets that draw consumers into one specific retail store over another. Take Wal-Mart’s success with its exclusive brands like Ol’Roy for dog food or Reli-On for diabetes. These brands inspire such trustworthiness and allegiance from their loyal consumers that Wal-Mart is their pre-meditated retail source whether they are running low on dog food or diabetes medication. <br />The exclusive brands may be the reason that consumers are initially drawn into the store, but once they are there, Wal-Mart also has the opportunity to encourage them to spend more on incidental or impulse purchases. <br />Therefore, exclusive or “own” brands not only reinforce enduring loyalty and positive feelings for the overarching retail brand, they often enable the retailer to capture a more significant share of the consumers’ wallet, heart, mind and lifestyle than a national product brand. <br />4) Optimize and promote synergies of the points of touch you own and influence. <br />Retail marketers are becoming more cognizant of how various aspects of their “own” brand marketing mix work together to create a strong, consistent brand message. <br />By developing store environments, in-store messaging like signage, merchandising systems, and packaging as well as external messaging like circulars, catalogs and advertising in a congruent manner, the retailer is able to create an enduring impression in-store, at shelf, at the time of purchase and during usage. <br />Many of these brand expressions do not require revolutionary change for extended periods of time, so they perpetuate an eloquent branded voice because of strategic integration rather than constant investment and reinvestment. <br />5) Strike the right balance of similarities and differences with brand messaging and portfolio offerings. <br />Brand architecture is a critical consideration for “own” brand marketing. Once the brand proposition is solidified, the brand architecture strategy enables decision makers to promote this promise at the retail store level in order to engender a sense of familiarity, recognition and trust. <br />At the same time, “own” brands tend to straddle a broader set of aisles than national brands. Because of this, it becomes more and more important to differentiate an “own” brand’s attributes and benefits on an aisle, category and product basis. <br />For instance, when shopping at a drugstore, the consumers’ purchase decision pathway in the over-the-counter cough and cold care category is quite distinct from their drivers in the paper goods category. Brand architecture and design expression can help the consumer navigate the breadth of the “own” brand portfolio and understand its depth of expertise in different areas of the store. <br />6) Calibrate the “own” brand promise and the proof in the product.<br /> It is important to consider how package design, nomenclature and product strategy can propel and support the retail marketer’s vision for the “own” brand promise. <br />Re-branding efforts often go hand in hand with packaging redesign and sub-branding initiatives. These are critical tools that help to visualize and verbalize what the “own” brand stands for and demonstrate its expertise and points of difference in various product categories. These brand executions are the vehicles through which “own” brands deliver on category-mandated functional and emotional virtues, spurring consumers to select the retailer’s brand over others. <br />However, decorative packaging and product names are not enough for today’s sophisticated shopper. The packaging may be the reason that a consumer picks a specific item off the shelf, but if the product does not live up to his anticipations in use, he will be less inclined to repurchase. <br />Product quality and innovation are a necessary functional underpinning for an “own” brand offering. This is the reason that re-branding efforts are often synchronized with product portfolio rationalization. By undergoing quality assessments, the retailer is able to ensure that its products live up to consumers’ expectations and that negative consumption experiences do not undermine the brand promise that is being developed and executed.<br />The Growth of Private Labels<br />Private labels are slowly gaining prominence at big retail stores. They have almost all the elements of a big label—a brand name and exclusivity. Maybe they lack a few things, like a big advertising budget and a sporty price tag.<br />But still, they are big and are here to stay. In fact, chances are that they comprise nearly 40% of your shopping bags while you shop at retail outlets like Westside, Shoppers Stop, Reliance Fresh, and Big Bazaar and so on. <br />Be it Tata’s Westside, Kishore Biyani’s Big Bazaar or RPG Group’s Spencer’s, everyone is betting big on private labels for they are fast becoming one of their major revenue spinners. So what makes you buy them, knowingly or unknowingly? What makes the retailers go all the way to launch and maintain these brands? What makes these brands successful despite no advertising? <br />How big are the private labels?<br />Private labels, often referred to as in-house brands or store brands, are those that are owned by the retailers themselves. For example, Shoppers Stop has several in-house brands such as STOP, Kashish, LIFE, Vettorio Fratini, Elliza Donatein and Acropolis. Reliance Fresh sells grocery such as pulses, rice, tea, noodles under the Reliance Food brand and the dairy products such as its curd is sold under the Dairy Life brand.<br />According to a FICCI-Ernst & Young 2007 report, as quoted in The Marketing Whitebook 2009-10, the retail sector in India was worth $280 billion, of which organized retail comprised 5% at $14 billion. In an ASSOCHAM-KPMG joint study, the size of the retail industry was pegged at $353 billion in 2008. It was estimated to grow to $410 billion by 2010, of which organized retail would value approximately $51 billion.<br />According to Images Retail Report 2009, as quoted in "Indian Retail: Time to Change Lanes" by KPMG; private label brands constitute 10-12% of organized retail in India. Of this, the highest penetration of private label brands is by Trent at 90%, followed by Reliance at 80% and Pantaloons at 75%. Big retailers such as Shoppers Stop and Spencer’s have a penetration of 20% and 10% respectively. Globally, store brands constitute nearly 17% of retail sales. In fact, international retailers such as Wal-Mart and Tesco have 40% and 50% of in-house brands in their stores.<br />Store brands: An overview<br />In India, the growth of private labels has been phenomenal and is slowly gaining more store space. Aditya Birla Retail, which operates the ‘More for You’ food and grocery chain, is reportedly pursuing strategies to increase its private label sales from the current 3% to 10-15% of total sales in the next two to three years. <br />Store space: Nearly 40-50% of the store space was dedicated to store brands. These products shared the shelf space with other branded products. For example, in the Reliance store, its curd brand Dairy Life was placed next to the other brands, such as Amul.<br />A number of store brands: This is especially true for apparel. Shoppers Stop has several in-house brands. For example, in the women’s wear category itself it has STOP, Kashish, Remika etc. Similarly, in the men’s wear category, it has STOP, Life, Vettorio Fratini, and so on. These products are not differentiated from the other brands in terms of store space.<br />Price tag: These products were priced substantially lower than the other brands. For example, Reliance’s tea brand sported a price tag of Rs 118 for 500 gms, whereas Brooke Bond, which was placed just next to it, was available for Rs 132 for 490 gms.<br />Catered to a number of categories: In these stores, the store brands were not limited to a particular category. For example in Shoppers Stop, it extended from apparel for men, women and children to crockery, kitchenware, and even furnishings. Similarly, in a Reliance store, it extended from pulses to spices, noodles and even dairy products.<br />How do in-house brands work?<br />For a retailer, there are several advantages of introducing in-house brands in their portfolio. Atulit Saxena, COO of Future Brands, explains, “Traditionally, private brands worldwide were always conceived to take on category leaders. If we are talking about soaps for instance, you might have 15-20 soaps, but as a large organized modern retail player, you might want to create your own trademark in your store, which is of the same quality, but at a price that is substantially lower.” This also becomes the differentiating factor for a retailer, as these brands are exclusively available at that retail outlet only. So a customer, for example, may want to revisit the store if they find the quality comparable to others at a more affordable price point.<br />As these brands create an identity for the retailer, there is a lot of work that goes into the pre-launch phase.<br />The quality of the products is also of big concern due to obvious reasons. However, these products have not been able to shrug off the tag of inferior brands. The designs are both done in-house and are outsourced as well. For example, while Shoppers Stop frequently ties up with young designers, Pantaloons believes in having its own in-house designers.<br /> “Private labels are highly profitable. The profits earned from them are almost double than those from the third -party brands.”<br />This brings us to the point—the core strength of the retailers is retailing and not designing and manufacturing products. 100% of our manufacturing is outsourced. There are fairly well-established manufacturers who work with retailers. So is there any opportunity for entrepreneurs in tying up with these players for manufacturing these products? <br />Five years back, private label brands were around 17.5% in terms of sales and today they are almost 22.5%—a 5% increase.<br />The road ahead<br />Private labels are slowly becoming the protagonist in the big Indian retail growth story. Taking cue from the West, Indian retailers are also churning out newer ways to increase their profit margins—one such initiative is the introduction of in-house brands. With Indian customers increasingly accepting these private label brands, they would soon be major contributors to the profits of Indian retailers.<br />Advantages of Private Label Brands<br />
    • Since manufacturers' (producers') brands have large advertising expenditures built into their cost, a private labeler is able to buy the same goods at a lower cost and thus sell them at a lower price and/or at a better profit margin.
    • Private labelers have more control over pricing and are able to advantageously display their own brands for maximum impact. For example, a grocery store can quickly reduce the price of its own PLB in order to meet or beat a competitor's price. Or the grocery store can create a special point-of-purchase advertising display and/or give its brand predominant shelf space in order to boost sales.
    • PLBs are usually priced lower than comparable manufacturers' brands and therefore appeal to bargain-conscious consumers.
    • Potential to increase store loyalty, chain profitability, control over shelf space, bargaining power over manufacturers.
    • Among consumers, one obvious reason for their popularity and growth is their price advantage (averaging 21%) over national brands.
    Disadvantages of private label<br />1. It takes time to work up your private label with the right quality coffee. While that is not terribly difficult, you can simply opt to have the supplier pack one of his standard blends in your graphics.<br />2. Because no one else is handling your product it will have to be packed to order, requiring some lead time from the day of order to the day of delivery. This requires at least a bit more organizing and control of inventory than would be necessary in purchasing the national branded, though of course it guarantees freshness.<br />3. The private label roaster may have his own imperatives in terms of production, with your order being shoved aside in favor of his own customers' needs.<br />4. Although the cost of your coffee will be substantially less when bought from a good private label supplier there will, of course, be little "help" in marketing the product by that supplier. The selling of your own product is likely to be entirely in your own hands.<br />Commercial objectives behind launching private labels <br />There are certain objectives that a retailer has in mind before getting into private label goods. Figure 2 lists the benefits that a retailer expects from the in-store brands.<br />Higher Margins <br />Private label goods are cheaper to produce than branded goods. Besides, due to the lack of advertising and marketing expenses they provide double advantage to the retailer when it comes to the profit margins. While majority of branded goods provide margins in the range of 6-12%, private label goods can offer margins up to 40%. Not only they give a higher margin to the retailers, private labels have also changed the balance of power between brand manufacturers and retailers, giving the latter a decided advantage when negotiating terms with the brand manufacturers. <br />Stronger Customer Loyalty <br />As the private label offerings increase and the quality is assured, a high sense of loyalty is cultivated among its customer base. This customer loyalty is the result of an affinity with the retailer brand which implies that the development of private label brands can tangibly enhance the retailer‘s brand itself. So in the long run, the private labels become an important tool for the retailer to establish its positioning and strategically attract the target customers to its outlet. Numerous studies have also shown that private label buyers are more store-loyal and not as easily influenced as brand buyers. <br />Differentiation <br />Through private labels, retailers get a chance to bring in unique products in their supply chains that have not been branded before. So if a retailer can cater to the local tastes and preferences of the consumers well by top quality private labels then they can differentiate themselves from other stores and become destination stores. In effect, it‘s a win-win situation even for the producers who get a chance to display their produce. <br />Freedom with Pricing Strategy <br />A retailer promoting a private label has the added benefit of greater freedom to play with pricing strategies, as a result of which these are overall cheaper than brand leaders. For instance, in USA, some private labels are 25 percent cheaper than leading brands. In addition, since it is an own private label, the retailer has the freedom to create its own marketing strategy and have more control over its stock inventory. This command of all the stages that a product goes through, gives the retailer high flexibility in pricing. <br />Positioning during economic downturns <br />The growth of private labels is likely to continue in the current financial environment as cash-strapped consumers' perception of the products as a cheaper option changes. The price advantage of private labels leads to the belief that these score in times of economic meltdown, and further that this newly-acquired market share is maintained even as the recession swings out. Even after the economy bounces back, consumers will naturally gravitate towards products marked at lower prices yet offering the same quality, especially where the retail name is a trusted national or regional player.<br />Statement of research objectives<br />
    • To get the knowledge about the perception towards the private label.
    • What are the factors that affect the perception of the customer?
    • To draw conclusion based on the behavior of the consumer.
    • To know the differences in perception among different locality.
    RESEARCH METHODOLOGY<br />Research Methodology is ways to systematically solve the problem. The Research Methodology includes the various methods and techniques for conducting a Research.” Marketing Research is the systematic design, collection, analysis and reporting of data and finding relevant solution to a specific marketing situation or problem”. D.Slesinger and M. Stephenson in the encyclopedia of social sciences define Research as “the manipulation of things, concept or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that aids in construction of theory or in the practice of an art.”<br /> Research is, thus an original contribution to the existing stock of knowledge making for its advancement. The purpose of research is to disco0ver answer to the question through the application of scientific procedures. Our project has specified framework for collecting data in an effective manner. Such framework is called” RESEARCH Methodology”. The research process followed by me consists of following steps:<br />
    • Defining the problem and research objective: It is said, “A problem well defined is half solved”. The step is to define the problem under study and deciding the research objective. The objective of my research is to know the consumer perception towards private label in comparison with manufacturing brands.
    2. Development the research plan: the second of this study consists of developing the most efficient plan for gathering data. <br />3. Sampling plan- A sample plan is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure the researcher would adopt in selecting sample items for the sample. Sample plan may as well lay down the number of items to be included in the sample. i.e. he size of the sample. The plan helps in decision making in the following areas.<br />Universe: All customers of private label (Croma) and manufacturing brands (LG) constitute the universe.<br />Sample size: this refers to the number of items to be selected from the universe to constitute a sample. The size of sample should neither be excessively large, nor too small, it should be optimum. The sample size for my study is 50<br />Sampling procedure: It is a way through which sampling is done. There are various procedures like random, systematic etc. The sampling procedure for my study is convenience sampling.<br />Research design: Descriptive in nature.<br />
    • Data collection: information will be collected from both primary and secondary data.
    Primary sources: Primary data are those which are collected afresh and for the first time. I have collected primary data by conducting survey through Questionnaire, which includes both open ended and close-ended Questions.<br />Secondary sources: Secondary data are those which already been collected by someone else and which already had been passed through the statistical process. I have collected secondary data has been collected through Magazines, Web sites, and Newspaper. <br />
    • Analysis of data and interpretations: After collection of date the analysis of data has been done through various statistical tools and techniques. The analysis of data required a number of closely related operations such as establishment of category, the application of these categories to raw data through coding, tabulation and then drawing statistical inferences.
    Research Limitations<br />Due to constraints of time & financial resources, the scope of study is limited to few customers of Greater Noida, Noida Delhi (NCR) only.<br />Smaller sample may not always give better results. Sample may not be true representative of the whole population.<br />The possibility of biased responses is ruled out.<br />Lack of availability of full information.<br />Sometimes customers are not willing to give response.<br />DATA ANALYSIS AND <br />INTERPRETAIONS<br />Q.1. Do you know about the Private labels?<br />ResponsesNo. of Respondents Respondents in %Yes 3570No 00Little bit 1530Total 50100<br />Interpretation: As the result shows that 70% know about the private label and 30 % know something about the private label. So we can say that people have much awareness about the private label. <br />Q.2. What do you think about Private label?<br />ResponsesNo. of Respondents Respondents in %Out sourced from other companies (mainly Local)2550Manufactured by retailers which sell them2550Total 50100<br />Interpretation: As the result display 50% people think that private label is outsourced from other companies (mainly local) and rest 50% thinks that private label is manufactured by retailers which sell them.<br />It shows consumer perception towards the private label. It indicates that they have good knowledge about private label.<br />Q.3. Which age groups do you belong?<br />ResponsesNo. of Respondents Respondents in %18-25255025-40153040-55 102055 & above000Total50100<br />Interpretation: Most of the respondents are of 18-25 and 25-40 age group. It shows that young people have much interested in purchasing in comparison with older one.<br />Q.4. Which income Group do you belong? (Monthly income)<br />ResponsesNo. of Respondents Respondents in %5000-10000102010000-20000153020000-30000153030000 & above1020Total 50100<br />Interpretation: This graph tells us that 30% of respondents having income between 20000 and 30000. 30% of respondents having income between 10000 and 30000.<br />Q.5. which one of these do you prefer for purchasing product?<br />ResponsesNo. of Respondents Respondents in %Private labels2040Manufacturing Brands3060Total50100<br />Interpretation: 40% of the respondents prefer PLBs while 60% of the respondents prefer national level brands. Thus, it can be seen that there is not a major difference in the preference of customers for PLBs vis-à-vis national level brands.<br />Q.6. Which type of Customer you are?<br />ResponsesNo. of Respondents Respondents in %Regular 2550Seasonal 1020Occasional 1530Total50100<br />Interpretation: 50% customers are regular in nature. 20% are of seasonal in nature. 30% are of occasional in nature.<br />Q.7. What do you think about the Quality of good?<br />Grade: 1-Poor2-Fair3- Good4- Very Good5-Excellent<br />GradePoorFair GoodVery GoodExcellentManufacturing Brand0%0%10%70%20%Private Brand0%20%60%10%10%<br />Interpretation: If we compare both it can be conclude that respondents have much more faith on the quality of manufacturing brands rather than private brands.<br />Q.8. What do you think about price relevancy?<br />Grade: 1-Poor2-Fair3- Good4- Very Good5-Excellent<br />GradePoorFairGoodVery GoodExcellentManufacturing Brand0%20%30%30%20%Private Brand10%20%50%10%10%<br />Interpretation: According to the graph it can be depicted that there is no huge difference in the price relevancy in manufacturing brands and private brands. People have faith on the price of the product but when we compare both we find that customer trust more on manufacturing brand’s price. <br /> <br />Q.9. what comes first in your mind when you want to purchase a product?<br />Grade: 1-Poor2-Fair3- Good4- Very Good5-Excellent<br />GradePoorFairGoodVery GoodExcellentBrand Name0%20%10%50%20%Price0%20%50%20%10%Quality0%0%0%50%50%Past Experience0%10%20%30%40%Service0%0%0%60%40%<br />Interpretation: According to the graph it can be said that customers more focus on quality and service and least focus on price.<br />Q.10. Which of these factors influencing in purchasing of product? <br />Grade: 1-Poor2-Fair3- Good4- Very Good5-Excellent<br />Private Label<br />GradePoorFairGoodVery GoodExcellentPerceived Quality0%30%10%30%30%Price charged0%50%20%20%10%Trust in brand0%20%20%30%30%Packaging0%40%30%20%10%Availability of Alternatives0%20%30%20%30%Sales promotion20%10%30%10%30%Advertising0%10%20%30%40%<br />Manufacturing Brand<br />GradePoorFairGoodVery GoodExcellentPerceived Quality10%0%20%30%40%Price charged0%10%60%20%10%Trust in brand0%0%20%30%50%Packaging0%30%0%40%30%Availability of Alternatives0%10%10%60%20%Sales promotion0%10%60%10%20%Advertising0%10%10%50%30%<br />Interpretation: For private label the customer’s main focus on trust in brand and advertising and least focus on packaging and sales promotion. For manufacturing brands customer more focus on trust in brand and advertising and price charged and sales promotion. When we compare both we finds that advertisement attract customers equally for private label and manufacturing brands. <br />Q.11. which one of these is effective marketing techniques?<br />Grade: 1-Poor2-Fair3- Good4- Very Good5-Excellent<br />Private Label<br />GradePoorFairGoodVery GoodExcellentPamphlet20%40%20%10%10%Billboard0%40%40%20%0%Word of mouth0%20%20%40%20%Television10%0%30%30%40%Newspaper 0%0%50%30%20%Magazines10%10%30%40%10%Internet 10%10%10%40%30%In-store Promotion0%10%20%20%50%<br />Manufacturing Brand<br />GradePoorFairGoodVery GoodExcellentPamphlet20%30%10%10%30%Billboard0%30%50%10%10%Word of mouth0%0%20%50%10%Television0%0%20%30%50%Newspaper 0%0%30%40%30%Magazines0%10%30%40%20%Internet 0%0%10%50%40%In-store Promotion0%10%20%30%40%<br />Interpretation: For private brand in-store promotion and television are the most effective and pamphlet and billboard are least effective. For manufacturing brand television, internet and in store brands are most effective and pamphlet and billboard are least effective. When we compare both we find out that private label apply, to the some extent, similar type of marketing techniques.<br />Q.12. who influence you more for purchasing product?<br />Grade: 1-Poor2-Fair3- Good4- Very Good5-Excellent<br />Private Label<br />GradePoorFairGoodVery GoodExcellentFriends 10%30%50%0%10%Family 10%30%40%20%0%Sales personnel0%40%60%0%0%Store atmospheric0%20%40%30%10%Past experience0%20%0%40%40%Sales promotion0%20%50%10%20%Advertising 10%40%30%0%20%<br />Manufacturing Brand<br />GradePoorFairGoodVery GoodExcellentFriends 0%10%10%50%30%Family 0%10%30%40%20%Sales personnel0%10%50%40%0%Store atmospheric0%30%0%60%10%Past experience10%10%10%20%50%Sales promotion0%20%20%30%30%Advertising 0%10%10%20%60%<br />Interpretation: For private brand sales promotion and past experience are the most influencing factor and family and friends are least influencing factors. For manufacturing brands friends and advertising are most influencing factors and store atmospheric and sales personnel are least effective factors. When we compare both we find out that past experience of private label is better than the manufacturing brands.<br />FINDINGS<br />
    • 40% of the respondents prefer PLBs while 60% of the respondents prefer national level brands. Thus, it can be seen that there is not a major difference in the preference of customers for PLBs vis-à-vis national level brands.
    • Most of the respondents are of 18-25 and 25-40 age group. It shows that young people have much interested in purchasing in comparison with older one.
    • 50% of the respondents perceive PLBs to be goods that are outsourced from other companies (mainly local) and sold under the retailer’s name while 50 % of the respondents perceive PLBs to be goods which are manufactured by retailers selling them.
    • As the result shows that 70% know about the private label and 30 % know something about the private label. So we can say that people have much awareness about the private label.
    • If we compare both it can be concludes that respondents have much more faith on the quality of manufacturing brands rather than private brands.
    • According to the graph it can be depicted that there is no huge difference in the price relevancy in manufacturing brands and private brands. People have faith on the price of the product but when we compare both we find that customer trust more on manufacturing brand’s price.
    • According to the graph it can be said that customers more focus on quality and service and least focus on price.
    • For private label the customer’s main focus on trust in brand and advertising and least focus on packaging and sales promotion. For manufacturing brands customer more focus on trust in brand and advertising and price charged and sales promotion. When we compare both we find that advertisement attract customers equally for private label and manufacturing brands.
    • For private brand in-store promotion and television are the most effective and pamphlet and billboard are least effective. For manufacturing brand television, internet and in store brands are most effective and pamphlet and billboard are least effective. When we compare both we find out that private label apply, to the some extent, similar type of marketing techniques.
    • For private brand sales promotion and past experience are the most influencing factor and family and friends are least influencing factors. For manufacturing brands friends and advertising are most influencing factors and store atmospheric and sales personnel are least effective factors. When we compare both we find out that past experience of private label is better than the manufacturing brands.
    RECOMMENDATIONS AND CONCLUSION<br />Recommendations<br />In this study, we examined how Indian customers perceive PLBs in comparison to national label brands. <br />
    • The findings of the study can be useful to retailers in formulating strategies to make products other than the national branded ones acceptable in the market.
    • An analysis of perception and satisfaction with PLBs can furthermore help retailers in developing stronger store/PLBs and in increasing their presence and acceptance in the market.
    • The findings of the present study provide important insights to all private label manufactures in India to increase their foothold and successfully compete in the Indian retail market.
    • A difference in pricing is desired and companies needs to fine tune and concentrate more on their supply chain and logistics to bring down costs associated with various products which they can pass on to customers in the form of reduced prices in turn leading to increase in customer satisfaction and acceptance of PLBs.
    CONCLUSION<br /> In conclusion it can be said that if private label manufacturers can consistently provide value to customers on factors rated high by customers and even if it is low on status symbol, there is a high possibility for them to establish these brands as acceptable in the minds of customers and to improve customers’ perception regarding the same. Though this perception may not be as high as a branded product enjoys but it could still become high enough for retailers to increase the sales of these brands and thereby raise their profit margin considerably.<br />Customers are now ready to accept the private label brands besides the manufacturing brands. Customers are now quality and service oriented.<br />BIBILIOGRAPHY<br />Books<br />C.R. Kothari - Research Methodology –Methods and Techniques (second revised edition 2009) <br />Dr. S.L. Gupta and Sumitra Pal - Consumer Behavior (2002) <br />Websites <br />http://www.heritage-coffee.com/PrivateLabelvs.NationalBrands.htm<br />http://www.myarticlearchive.com/articles/9/173.htm<br />www.efqm.org/en/PdfResources/Customer%20Perception.pdf<br />http://wps.aw.com/aw_carltonper_modernio_4/21/5566/1424975.cw/content/index.html<br />http://www.tetonsands.org/docs/PrivateLabel.pdf<br />www.researchersworld.com/vol2/PAPER_15.pdf<br /> http://www.iimahd.ernet.in/assets/snippets/workingpaperpdf/2008-02-04Abhishek.pdf<br />http://ebookbrowse.com/aithal-rajesh-an-exploratory-study-on-the-emergence-of-private-labels-in-the-india-pdf-d47433607<br />ANNEXURE<br />Questionnaire<br />NAME:GENDER:<br />OCCUPATION:Location:<br />Q.1. Do you know about the Private labels?<br />a) Yes b) Little bitc) No<br />Q.2. What do you think about Private label?<br />a) Out sourced from other companies (mainly Local)<br />b) Manufactured by retailers which sell them<br />Q.3. Which age groups do you belong?<br />a) 18-25b) 25-40c) 40-55d) 55 & above<br />Q.4. Which income Group do you belong? (Monthly income)<br />a) 5000-10000b) 10000-20000 c) 20000-30000d) 30000 & above<br />Q.5. which one of these do you prefer for purchasing product?<br />a) Private labelsb) Manufacturing Brands<br />Q.6. Which type of Customer you are?<br />a) Regularb) Seasonalc) Occasional<br />Direction to Q.7-12: You have to give rating according to you as given below:<br />1-Poor2-Fair3-Good4-Very Good5-Exellent<br />Q.7. What do you think about the Quality of good?<br />a) Manufacturing Brand 1.2.3.4.5.<br />b) Private Label1.2.3.4.5<br />Q.8. What do you think about price relevancy with the product?<br />a) Manufacturing Brand 1.2.3.4.5.<br />b) Private Label1.2.3.4.5<br />Q.9. When you want to purchase a product. Which one have great chances to incline towards the product?<br />a) Brand Name1.2.3.4.5.<br />b) Price1.2.3.4.5.<br />c) Quality1.2.3.4.5.<br />d) Past experience 1.2.3.4.5.<br />e) Service 1.2.3.4.5.<br />Q.10. How much chances of these factors influencing in purchasing of product? <br />Private Label<br />a) Perceived Quality 1.2.3.4.5.<br />b) Price charged1.2.3.4.5.<br />c) Trust in brand1.2.3.4.5.<br />d) Packaging 1.2.3.4.5.<br />e) Availability of Alternatives1.2.3.4.5.<br />f) Sales promotion1.2.3.4.5.<br />g) Advertising1.2.3.4.5.<br />Manufacturing Brand<br />a) Perceived Quality 1.2.3.4.5.<br />b) Price charged1.2.3.4.5.<br />c) Trust in brand1.2.3.4.5.<br />d) Packaging 1.2.3.4.5.<br />e) Availability of Alternatives1.2.3.4.5.<br />f) Sales promotion1.2.3.4.5.<br />g) Advertising1.2.3.4.5.<br /> <br />Q.11. which one of these is effective marketing techniques? <br />Private Label<br />a) Pamphlet1.2.3.4.5.<br />b) Billboard1.2.3.4.5.<br />c) Word of mouth1.2.3.4.5.<br />d) Television1.2.3.4.5.<br />e) Newspaper 1.2.3.4.5.<br />f) Magazines1.2.3.4.5.<br />g) Internet1.2.3.4.5.<br />h) In-store Promotion.1.2.3.4.5.<br />Manufacturing Brand<br />a) Pamphlet1.2.3.4.5.<br />b) Billboard1.2.3.4.5.<br />c) Word of mouth1.2.3.4.5.<br />d) Television 1.2.3.4.5.<br />e) Newspaper 1.2.3.4.5.<br />f) Magazines1.2.3.4.5.<br />g) Internet1.2.3.4.5.<br />h) In-store Promotion.1.2.3.4.5.<br />Q.12. who influence you more for purchasing product?<br />Private Label<br />a) Friends1.2.3.4.5.<br />b) Family1.2.3.4.5.<br />c) Sales personnel1.2.3.4.5.<br />d) Store atmospherics1.2.3.4.5.<br />e) Past experience 1.2.3.4.5.<br />f) Sales promotion1.2.3.4.5.<br />g) Advertising1.2.3.4.5.<br />Manufacturing Brand<br />a) Friends1.2.3.4.5.<br />b) Family1.2.3.4.5.<br />c) Sales personnel1.2.3.4.5.<br />d) Store atmospherics 1.2.3.4.5.<br />e) Past experience 1.2.3.4.5.<br />f) Sales promotion1.2.3.4.5.<br />g) Advertising1.2.3.4.5. <br />