Group Project : Brand management Article: Private Label vs Brand Sec A Group : 7

1. Private Label
Submitted By :
Sec A | Group 007
Augustus Martin(PGP30014)|Arvind Kumar(PGP31072)|R Poorna(PGP31101)|Rahul Ranjan(PGP31102)

3. High
innovation
rate
low brand
equity
Brand
Private
Label

4. Source: Nielsen Global Survey of Private Label, Q1 2014

5. Source: Nielsen Global Survey of Private Label

8. 5%
Trade Penetration
27%

11. Price is important to most consumers and is the primary driver
of consumers’ purchase intent
Consumers are seeking quality and value, and private label
delivers on both of these attributes
Consumers are fiercely brand-loyal
69% - Best
Price
70% - Save
Money
67% - Value
for Money
62% - Smart
Purchase

14. Indian Retail Sector

15. Degree of Private Label Penetration (in India)
90% 80% 75%
38% 30%

16. Private Labels by
 Labels by SS:
 Stop
 haute curry
 Kashish
 Life
 Elliza Donatein
 Vettorio Fratini
 400 high quality SKUs across 4
brands
 confectionery, chocolates, chips,
flavored nuts, teas, gluten free
pastas, etc.
 Signed up Kangana Ranaut as
its brand ambassador for its
private label brand – Melange,
contemporary ethnic wear
brand
17.2% - Share
of Sales Mix
10% - Share
of Sales Mix
15% - Share
of Sales Mix

17. Bharti Walmart’s Great Value Assortment
50% share in terms of sales in the
category
In top three spot in terms of sales in
the category
Tea
22%
Wheat Flour
35%
Rice and
branded snacks
20%
Great Value tops the floor cleaner
segment

18. Leading ‘horizontal’ players such as Snapdeal, Flipkart as well as ‘vertical/ niche’ players such as Big Basket,
Urban Ladder and many more are deriving at least 20+% sales contribution from in-house labels.
As the online ecosystem further matures, private label is expected to be a key differentiator
Business models are being renovated to
accommodate this investor-friendly category

19. Online e-tailer - Myntra
Based on customer insights gleaned from their platform, they are launch new fashion
collections, under the Moda Rapido brand, once every four weeks. This process normally
takes other brands a few months to execute. They are still in the process of experimenting
with this tech-led fashion brand.

20. The WAY FORWARD

21. If you didn’t start, don’t start!
• Recommendations to brand manufacturers to not yet compete
directly with private label brands
• Excess capacity – private label might not be a good idea
• incremental marginal cost basis – end up as adding on to manufacturing costs
rather than reducing them
• Efficiencies of selling private labels are also exaggerated
• Easy to overstate relative contribution and underestimate the cost of
cannibalisation

22. Cont.
• Short term factors favoring private label production
• Manufacturers have the ability to influence the category
• Shelf space allocation
• Timing of national brand promotion
• Learning about consumers and costs that come from being private label
manufacturers to defend national brands

23. Evaluation private label brands
• Private label audit
• Private label profitability
• Impact on national shares
• Close excess capacity

24. Strategies to win vs Private labels
• Invest in private labels
• Innovate wisely
• Using fighting brands sparingly
• Build brand relationship
• Manage price spread
• Exploit sales promotion tactics
• Manage each category separately
• Use category profit pools as a performance measure
• Take private labels seriously

25. So We Can Say That…
• The private labels have now come to stay. They cannot be
wished away. However, the retailers should keep in mind
that overdoing anything is bad.
• Private labels cannot be promoted at the cost of national
brands. The private labels can only act as complementary
to the national brand.
• If the private labels are over done, it may affect the store
image and will keep away some customers. If done
properly, the private labels should be a win-win proposal.

26. References
• http://www.indiaretailing.com/2016/05/02/fashion/the-business-of-private-labels-in-indian-
retail/
• http://economictimes.indiatimes.com/industry/services/retail/private-labels-owned-by-retailers-
such-as-bharti-retail-future-group-outsell-national-brands-in-own-
stores/articleshow/11772449.cms
• http://www.business-standard.com/article/companies/private-labels-to-continue-growing-in-
retail-sector-kpmg-109040200182_1.html
• http://www.isme.in/private-labels-their-growing-importance-in-retailing/
• http://articles.economictimes.indiatimes.com/2013-08-14/news/41409826_1_private-brands-
private-labels-modern-trade
• Private Label Brands in Indian Retail Industry. Article by T.Subha, R. Kirthika, P. S. Narayanasamy