Migros Private label case

1. İlayda Saraçoğlu
1605408
Migros Turk-Private Brand Products Case
1. What is the role of private brands in a product portfolio dominated by national
brands? Should a retailer like Migros attempt to change customer preferences in
the direction of private brands, or simply stock what customers prefer to
purchase?
Private brands are products with low stocking and distribution costs and a good
competition in the market. It is a long-term business strategy that aims to increase the
customer loyalty of the retailers and interfere in the market with the quality that can
compete with national brands at the present time in order to meet the needs of low
purchasing masses.
Retailers such as Migros should change customer attitudes towards their private brands.
The sales potential of private brands is very high. There are many successful examples of
this all over the world. Because of the lack of advertising, shelf space and distribution
costs of private brands, it can be offered to the customer at low prices. However, they can
achieve the potential to compete with national brands with special packaging and correct
advertising.
2. Why are Migros private brand sales in food lines so much lower than found in
western food chains? Is this related to the Turkish preference for higher prestige
national brand names on high-involvement, visible products and reliance on
private brands only for low-involvement products, or are there other
explanations?
One of the main reasons why Migros's sales in private brands is lower than that of
western food chains is that Turkish consumers are dependent on national brands and the
other reason is that they do not want to buy products with low brand status. The perception
of private brand can develop especially in parallel with the perception of the market.
According to research, consumers see market brands as suitable for low budgets and
compare the quality of private brands with leading brands. In order to improve the
perception of the private brand, increasing the reliability of the market, informing about the
products and launching premium branded products can have a positive effect on those
who are ambivalent.
3. In what other food lines can Migros private brand sales be expanded? Should
Migros private brand emphasis be in M stores, in MM stores or in MMM stores?
Migros can change its customer perception and increase its sales by launching the
premium brand in its coffee and derivative product group. Customers can be attracted by
nice packaging and proper advertising in coffees with the least sales category of Migros.
Experimental products can be given to customers and experience areas can be created in
stores.
Also, variety of food and cleaning products can be increased. Migros private brands should
bring their products in front of customers in every store format. In this way, the customer
can increase awareness in the eyes, products become visible and recognized.

2. 4. Why are Migros Private brand sales in apparel so low? Is the explanation the
same as for private brand grocery sales? Should Migros emulate the Wal-Mart,
Target or M&S apparel models? Can it sell foreign-sourced private brands of
celebrity clothing or cosmetics?
Apparel sales could not be equated with the Migros in Turkey therefore sales in apparel is
so low. Customers are of the opinion that the quality of these products is low. The
explanation for private brand grocery sales is not the same because Migros has not given
much importance to the clothing category, but other strategies are followed and the
customer can change this perception if the premium private brands are presented to the
customer. Migros can take global retailers as an example and taking into account the
needs of customers, the quality and unbeatable prices created by Marks & Spencer can be
adapted to the target audience. A famous person for the promotion of the products will
increase sales significantly.
Migros should also have foreign-sourced private products in the store so that it can add
itself to the market and be able to bring itself to the forefront with its competitive
environment.
5. Given the many advantages of private brands, notably higher margins and
greater store loyalty for consumers, what are the main points of 5year marketing
plan for Migros to raise its private brand sales closer to western levels?
In this process, Migros should first determine whether there is a need for a new product in
the Migros product category as a result of interviews with consumers and determine the
target group of the brand. Migros should give importance to product innovations,
investigate the needs of the target consumer, and develop new products in areas where
there is no national branded product. In this context, new marketing investments can be
made to create new product categories and R & D studies can be given importance. In
addition, new alternatives can be offered to consumers by increasing product variety in
existing product categories. It can also attract new masses of customers by using
environmentally friendly packaging that is recycled in its brand.
In order to make a competitive difference, Migros should focus its resources on more
private label products, spend more time and efforts on the development of private label
products and position private label products at the leading brands level. High quality
positioning can also provide Migros with higher pricing options compared to national
brands. In this strategy, retailers aim to create innovation and difference, and position their
private brands at high quality and high price level. The aim is to create a brand with a high
image that is preferred by consumers. Therefore, advertisement and sales development
activities are given importance to ensure that the brand communicates with consumers.
The low prices of the Migros private brand should not reflect low quality, and the quality
perceptions of consumers should be changed with different promotion activities and
packaging techniques.
Migros can also increase its profits by applying the balancing price strategy. In addition, in
order to create in-store consumer traffic and increase sales, promotions with price
discounts can be made at certain times.
Migros can provide samples to enable consumers to prefer private label products. This
means that consumer perceptions of private label products are not of good quality.
The guarantee and after-sales services offered, the positive image of the store, the
approach of the staff and the provision of extradition opportunities will reduce the
perceived risk for consumers and increase the willingness to buy. In particular, warranty
conditions are one of the most important elements of promotional activities. At the same
time, it can also be used as a strategy that provides superiority against the opponent in
competition conditions.