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Private label brands & New Retail Enviornment

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Presentation on Private Label Brands & New Retail Environment by Nitesh Singh Patel, IMT nagpur

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Private label brands & New Retail Enviornment

  1. 1. RETAILING : PRIVATE LABELS & THE NEW RETAIL ENVIRONMENT PRESENTED BY: Nishant Agarwal (2013174) Nishant Renjith (2013175) Nishidh Lad (2013176) Nitesh Beriwal (2013177) Nitesh Singh Patel (2013178) SECTION-D
  2. 2. “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”
  3. 3. RETAILING : PRIVATE LABELS & THE NEW RETAIL ENVIRONMENT
  4. 4. What is Retailing?  Sales of goods and services to the ultimate consumer for the personal, family or household use.  Any organization selling to final consumers- whether it is manufacturer, wholesaler or retailer.  In the channel of distribution, retailing is where customer meets the product.  Exchange
  5. 5. Types of Retailers 1. Store Retailers 2. Non store Retailers
  6. 6. Store Retailers 1. Speciality Store : Narrow Product line.
  7. 7. Store Retailers 2. Department Stores: Several product lines
  8. 8. Store Retailers 3. Supermarkets:  Large low cost,  Low margin,  High Volume,  Self Service store  Meets all household and food products
  9. 9. Store Retailers 4. Convenience store/ Drug stores: Small store in the residential area open 24/7
  10. 10. Store Retailers 5. Discount store:  Low price  Low margin  High volume store E.g. Walmart
  11. 11. Store Retailers 6. Extreme value or hard discount store:
  12. 12. Store Retailers 7. Off Price Retailers : Leftover goods, overruns, irregular merchandise sold at less than retail.
  13. 13. Store Retailers 8.Superstore: Huge selling space, routinely purchased food and household items, plus services
  14. 14. Store Retailers 9. Catalogue showroom:  High markup  Fast moving  Brand names
  15. 15. Consumer Preference 1. Self service 2. Self selection 3. Limited service 4. Full service
  16. 16. NONSTORE RETAILING 1. Direct Selling:  Multilevel selling  Network selling
  17. 17. NONSTORE RETAILING 2. Direct Marketing:  Telemarketing  Television direct response marketing  Electronic shopping
  18. 18. NONSTORE RETAILING 3. Automatic Vending:
  19. 19. CORPORATE RETAILING AND FRANCHISING 1. Consumer Cooperative:  Owned by customers  Members contribute money to open their own store  Vote on its policies  Elect a group  Manage it  Receive dividends
  20. 20. CORPORATE RETAILING AND FRANCHISING 2. Franchise Organization :
  21. 21. CORPORATE RETAILING AND FRANCHISING 3. Merchandising Conglomerate: Diversified retailing lines and formed under central leadership, with some integration of distribution and management.
  22. 22. NEW RETAIL ENVIRONMENT
  23. 23. What Has Triggered the CHANGE…. •Fast changing Macro and Micro Environment •Growing consumer expectations. •Exhaustive Competitive pressure. •Growth of Urbanization. •High disposable income.
  24. 24. NEW RETAIL FORMS & COMBINATIONS •Bookstores featuring Coffee Shops. •Gas stations including food stores. •Shopping malls and stations having peddlers’ carts in their aisles.
  25. 25. Store Based & Non Store Based Retailing. •Increased offerings through mails, cell phones and internet. •Non store based retailers enjoy convenience leverage. •Store based retailers coming online to compete. •More and more experiential touch being given to the physical stores.
  26. 26. GROWTH OF GIANT RETAILERS.. •Inherit superior information systems, logistical systems and buying power. •Crowding out small manufacturers. •Suggest even companies for improvement and innovations. •Includes huge market share.
  27. 27. Growing Investment In Technology.. •Improved ways of forecasting, inventory control and order processing. •In store programming on LED’s, electronic shelf labeling and smart shopping carts getting common. •Digital advertising and different payment methods creating further space.
  28. 28. •Global Retailers snatching grounds. •Growth of Shopper Marketing. Influencing customers at the point of purchase.
  29. 29. Marketing Decisions Target Market Channels Product Assortment Prices Services Store Atmosphere Store Activities and Experiences Communications Location
  30. 30. Target Market
  31. 31. Channels
  32. 32. The collection of goods or services that a business provides to consumers. The main characteristics of a company's product assortment are: (1) its length or number of products, (2) its breadth or number of product lines, (3) its depth or number of product varieties within a product line and (4) how products relate to each other in a retail environment. Product Assortment
  33. 33. Price Fine Specialty Stores: High-Markup, Lower- volume group Mass Merchandisers and Discount Stores: Low-markup, Higher-volume group
  34. 34. Services Prepurchase Services •Advertising •Fitting rooms •Fashion shows Postpurchase Services •Shipping & Delivery •Alterations •InstallationsAncillary Services •Parking •Repairs •Rest rooms
  35. 35. Store Atmosphere
  36. 36. Communication
  37. 37. Location  Central Business Districts  Regional Shopping Centers  Community Shopping centers  Shopping strips  A Location with a larger Store  Stand-alone stores
  38. 38. PRIVATE LABELS I DON’T WANT TO TALK IN TERMS OF MARKET SHARE. I DON’T WANT TO SHARE MY MARKET WITH ANYONE. -LARRY LIGHT, CEO WALLMART
  39. 39. Definition  Private labels are retailer brands.  Brands owned & sold by retailer & distributed by retailer.
  40. 40. The Beginning A&P’s 8 O'clock Coffee in 1900s
  41. 41. Background of PLB  Earlier referred as Cheaper & Low quality alternatives for national brands.  Just a profit making concept which needed no marketing effort  Tescos Value Range in 1995 was the first value pay brand  Other retailers like Sainsbury etc. quickly followed the suit  In India in 2000s this concept came up & Future Brand came up with “SACH” toothbrush & toothpaste range.
  42. 42. Why Did It All Begin?  Shift of power from National brand marketers to National Retailers  High Quality & Low Price  Historical perspective of key retailers of a strong house brand.
  43. 43. How does PLB work?  Winning strategy for improving store image and profitability.  Offers value for money  Increases the price competitiveness  16-23% less price for the consumers as compared to national brands  Differentiating factor as exclusively available at the particular store only  Consumers get an assurance that they can directly interact with the owner of the brand
  44. 44. Would You Prefer A PLB Over A National Brand? Yes 43% May Be 44% No 13% Yes May Be No
  45. 45. If Yes, Then Why? Quality 42% Trust on that retail store 24% Cheaper Price 25% No, I wouldn't prefer 9% Quality Trust on that retail store Cheaper Price No, I wouldn't prefer
  46. 46. If No, Then Why? Don’t want to change brand preference 30% No trust on quality 18% I can give it a try 52% Don’t want to change brand preference No trust on quality I can give it a try
  47. 47. How Was Your PLB Buying Experience? Average 22% Awesome 6% Good 63% Not Tried 9% Average Awesome Good Not Tried
  48. 48. Would You Like To Repeat Your PLB Experience Yes 89% No 11% Yes No
  49. 49. Food Dominates India’s Private Label Market  According to Nielsen’s Survey “Food” captures 76% of the India’s Private label Market
  50. 50. PRIVATE LABEL GROWTH vs MODERN TREND GROWTH
  51. 51. ADVANTAGES
  52. 52. 1. DIFFERENTIATION
  53. 53. HIGHER MARGINS
  54. 54. FREEDOM TO CREATE OWN MARKETING PLAN Independence to retailer to use its own innovative marketing strategies  For National Brands, Poor marketing strategy by the manufacturer not only results in the failure of the product, but also erodes the profit margin of the retailer
  55. 55. FREEDOM WITH PRICING STRATEGY  Similar to the Marketing Strategy, Private Labels also give the retailers to a chance to adopt their own pricing strategy  Shields retailers from the losses due to longer shelf life of poorly priced products  Retailers can directly pass on the price benefits to the customer
  56. 56. Strong Customer Positioning  Develops Customer Loyalty  Uniqueness of Private Labels, helps to build brand loyalty  Customer Loyalty has significant advantage over its competitors
  57. 57. Private Labels (Examples)
  58. 58. JOHN MILLER – AN ILLUSTRATION OF SUCCESS Facts about John Miller  Came into existence in 1995 as an extension of Pantaloons  Ranges between Rs. 800-1500  Targeted at Premium segment customer  Over the years it has grown from a private label to a private brand.
  59. 59. KEY TO SUCCESS OF JOHN MILLER  One of the very first private labels in the apparel industry in India  High quality at low price  Reasonable Price Range  Attractive option for value buyers
  60. 60. Contd.
  61. 61. DISADVANTAGES  Highly Competitive Market  High risk with reputation of the brand.  Risk of getting into a price war  Dependent on the supplier  Excess focus on private labels inside the stores
  62. 62. CONCLUSION  Win – Win situation for both, customer and retailer  Lower prices and Higher margins  Quality is comparable to that of National Brands  Value for money products  Extra care and detail
  63. 63. Contd.  Huge growth potential  Deeper Market penetration required  Innovative Marketing and promotions are the need of the hour

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