2. Concept of Private Labels
Name can be the store’s
name or a name created
exclusively by the store
Can be bought at the store
only
Some of the private labels
3. Classification of Private Labels
Store Brand
Which carries the retailer’s name such as Westside, Foodworld, Big
Bazaar
Umbrella Brand
Common brand across multiple categories – e.g. Bare from pantaloons,
Splash from Lifestyle
Individual Brands
Specific brand names created for specific market segments and / or
categories
4. The Need for Private Labels
Private Labels act as value added marketing differentiator
Bringing unique products within the range of the customer
by pricing it aggressively thus creating a competitive
advantage
Lesser costs on account of in-house designing,
merchandising, outsourcing and distributions
In store promotions brings down the cost of promotion
5. The Need for Private Labels
Need for
a
Private
Label
Identification
of Need Gap
Need to
create
unique
merchandise
Creating
Customer
Loyalty
Need to Earn
increased
margins
Changing
Consumer
Habits
6. The Evolution of Private Labels
Generic Product offerings towards price value proposition
Inspires less confidence and trust as it is a substitute for
the real thing
Increases business and builds customer loyalty
Evolution from cheaper substitutes to niche products like
Wellness products
Core products
Expertise
Aspirational
7. The Evolution of Private Labels
1st Generation 2nd Generation 3rd Generation 4th Generation
Type of Brand Generic
No Name
Brand free
Unbranded
Quasi Brand
Own Label
Own Brand Extended own
brand i.e.
segmented own
brand
Strategy Generics Cheapest Price Me-Too Value Added
Objective Increase
Margins
Providing
Choice in
Pricing
Increase
Margins
Reduce
manufacturer’s
power by
setting entry
price
Provide better
value product
Enhance
category
margins
Expand product
assortments
Build retailer’s
image among
customers
Increase and
retain client
base
Enhance
category
margins
Improve image
further
Differentiation
8. The Evolution of Private Labels
1st Generation 2nd Generation 3rd Generation 4th Generation
Product Basic and
functional
products
One-off staple
lines with a
large volume
Big Products
category
Image forming
product groups
Large number
of products with
small volumes
(niche)
Technology Simple
production
process and
basic
technology
lagging behind
market leader
Technology still
lagging behind
market leaders
Close to the
brand leader
Innovative
technology
9. The Evolution of Private Labels
1st Generation 2nd Generation 3rd Generation 4th Generation
Quality / Image Lower image
and inferior
image
compared to
the
manufacturer’s
brands
Medium quality
but still
perceived as
lower than
leading
manufacturer’s
brands
Secondary
brand,
alongside the
leading
manufacturer’s
brand
Comparable to
market leaders
Same or better
than market
leaders
Innovative and
different
products from
brand leaders
Approximate
Pricing
20% or more
below brand
leader
10-20% below 5-10% below Equal or higher
than known
brand
Consumer’s
motivation to
Price Price Both quality
and price i.e.
Better and
unique products
10. Process of Private Label
Creation
Defining Objective
Factors like creating differentiation, wide product range, enhancing
margins
Defining Gaps in the Market
Gaps can be price gaps, offerings gaps, etc
Decision on make or buy and Sourcing
Checking on own’s SWOT
Determine the Marketing and Sales Strategy
Determine the Measures of performance
Creating metrics of measurement