The document discusses brands versus private labels. It outlines some advantages of private labels such as higher profit margins and supply chain efficiencies. However, it also notes that brands provide benefits like quality assurance and help build customer loyalty over time. The document examines the rise of private labels in India and factors driving their growth. It provides tips for brand manufacturers on evaluating private label opportunities and maintaining brand strength in the face of competition from private labels.

1. Brands vs Private Labels

2. Examples of Private Labels
WALMART
TELCO
FUTURE
GROUP

3. Advantages of Private Labels

4. Profit Margin
Cost of
delivery
Supply Chain
Efficiency
Eliminate Middle-man

5. Retailer Differentiation

6. Saviour during economic downturn

7. Independent Pricing Strategy

8. Threat to Brands!!!

9. Improved Product Quality by Private Labels
Quality

10. Development of Premium Private Labels

11. Emergence of New Channels

12. The European Success

13. Emergence of New Categories

14. BRAND
STRENGTH

15. • Quality Assurance
• Comfort & security
• More value
• Needs time or ability to
invest
• Doubtful about quality
PURCHASE PROCESS FAVORS BRANDS

16. FOUNDATION FOR COMPETITIVE ADVANTAGE
RUNNING START
STRONG BRAND EUITY
RESULT OF DECADES OF
ADVERTISING & CONSISTENT
QUALITY

17. S
BRAND STRENGTH PARALLELS ECONOMIC STRENGTH

18. TRAFFIC BUILDING POWER
ENHANCE STORE LOYALTY
REPRESENTATIVE OF STORE
CHARACTERISTICS
NATIONAL BRANDS HAVE VALUE FOR RETAILERS

19. EXCESS EMPHASIS ON PRIVATE LABELS DILUTES STORE STRENGTH
UNAVAILABILITY OF BRANDS IN STORES LEAVES CONSUMERS
WITH A BELIEF THAT STORE HAD INCOMPLETE ASSORTMENT
AND HENCE REDUCES STORE TRAFFIC.

20. What Should Brand Manufacturers Do?
• Brand manufacturers that
do not yet make products for
private labels, should not
start to do so!

21. Risks of making private label
• Taking orders in categories
where its own market share
is weak.
• These categories: lifeblood
of the manufacturers sales

22. When Choosing to Private Label
• Evaluate private label
manufacturing on full cost basis
rather than incremental cost

23. • Additional manufacturing
and distribution complexities-
-> add to cost

24. • Efficiencies of selling
private label contracts may
be exaggerated – not
accounting for competing
bidders

25. • Companies may overstate
the relative contribution of
Private Label goods and thus
understate the cost of
cannibalization.

26. • Private Label contracts can
increase dependence on a
few large trade accounts

27. Indian Markets – Rise of Private Labels

28. Reasons for Growth in India
Still in Nascent Stage
Market Share 10%
vis-à-vis 40% in Europe
Increasing acceptance due to Organized Retail Sector Growth

29. Other Factors of Growth
Influence
of
Retailers
Favorable
Channels like
E -commerce
Improved
Quality
Low pricing
attracts
customers

30. Growing Importance in Retailing

31. Prominent PLs in Indian Organised Retail
Tasty Treat Fresh & Pure
Clean Mate
Sach
Indigo Nation
Scullers
John Miller RIG
Private Labels offering 47 Product Lines

32. Prominent PLs in Indian Organised Retail

33. Prominent PLs in Indian Organised Retail
Feasters
(Food Products) More
(Grocers)
110 Per Cent
(Soaps, Detergents)
AU79
(Deodorants)

35. Know private level business done by you
Conduct a Private-label AUDIT

36. Calculate private-label PROFITABILITY
Full-cost and Marginal-cost

37. Examine the IMPACT on
your MARKET SHARE

38. The excess capacity

39. INVEST in BRAND EQUITIES

40. INNOVATE wisely

41. Use FIGHTING BRANDS

42. Build Trade
RELATIONSHIPS

43. Educate your retailers
Examine their purchase
Scanner data
Subsidize in-store
Experiments
Ration support

44. MONITOR
the
PRICE
GAP

45. Secure Retail Space
Distribute Coupons
Sales rebate
to Retailers

46. MANAGE each CATEGORY

47. Summary
• Examples of Private Label
• Advantages of Private Label
• Brand Strengths
• Choosing Private Label manufacturing
• Scenario in Indian Market
• Evaluating Private-Label Business

48. Take Private Labels SERIOUSLY