Brands vs private label
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This document discusses private label products and strategies for brand name manufacturers to address the threat from private labels. It notes that private label strength varies with economic conditions and brand manufacturers can influence private labels. While private labels pose a threat, an overreaction is not the solution. The document recommends that brand manufacturers invest in brand equity, innovate wisely, use fighting brands sparingly, build trade relationships, manage price spreads, exploit sales promotions, manage each category separately, and take private labels seriously to stem further private label gains in market share.
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Brands vs private label
- 2. Just because you are paranoid doesn’t mean they are not out to Get you
- 4. Well…… …… This was reaction of Brand-Name Manufactures to competion from
- 5. At times there is a reaction & At times it Goes over
- 6. The over reaction comes when one of the two things are forgotten………
- 7. Firstly…..Private Label strength varies with economic conditions.
- 8. *Secondly… Brand Manufacturers can control Private Labels.
- 9. Threat such as what follows threatens…….
- 10. Classic cola ,offered at 20%lower cost , had 65% share at Sainsbury & 15%at UK Market.
- 11. An over reaction or an under reaction is not the Solution.
- 13. Lifetime of private labels whether it will grow or fade
- 14. Strength of Brand Name which is far from dead.
- 15. Threats since 1990’s global context……
- 16. Narrowing gap btw Private Labels & Brands Development of private label lines Emergence of new channels such as mass merchandiser & e-commerce favors private labels
- 18. Private labels are at a nascent stage in India Influence of retailers is huge and they favor it due to higher profitability New channels such as e-commerce favor private labels such as Myntra But the quality served by private labels is almost equivalent to the ‘ Kirana Stores’ we generally buy from The private labels employ western ideas considering what favors the organization & not what Indian consumers desire
- 19. Thus…. Private Labels have way to go in India………. & Returning to global context……………..
- 20. These threats doesn’t mean an end to Brands !
- 21. How can we forget the Brand Power? Brand Power is territorial ownership of values with the ability to influence masses
- 22. Strength lies in its name : It has a running start
- 23. Purchase process favors brand name product.
- 24. Brands have value for retailers as these are the traffic building agencies.
- 25. What would be more convenient , some retailer argue, than to have consumers remember a single store name Retailers can’t overemphasis on Private Labels
- 26. After all these…… Still Brands are tempted to enter Private Label manufacturing arena in order to…..
- 27. Use excess capacity Invariably use private label opportunities to increase profitability
- 29. For manufacturers seeking only to use excess capacity ,Private Label Production can eventually become narcotic
- 30. Next Step….
- 31. Supply of private-label goods in categories that are life blood of manufacturer’s branded sales
- 32. fate of the company…….
- 33. Company’s strategy becomes confused & it cannibalizes its brand name products
- 34. After the pros & cons , what should a Brand Name Manufacture do ?
- 36. If you Don’t , Don’t start
- 37. Then, how to stem any further share gain by Private Labels ?
- 38. Whether a Dual Manufacturer or National Brand Manufacture only….
- 40. Invest in Brand Equity Consistent investments in product improvements raises costs to Private Label Imitator .
- 41. Innovate Wisely Say ‘ NO’ to worthless trade extensions
- 42. Use Fighting Brands sparingly They take away purchasers of National Brands & rarely make profit.
- 43. Build Trade Relationships Know about your end customers, more than anyone else.
- 44. Manage the Price Spread Knowing the shape of your brand’s price elasticity curve is essential for smart pricing & maximizing profit.
- 46. Manage Each Category What works for detergents, wont necessarily work for soft drinks.
- 47. Use category profit pools as a performance measure Brand’s objective should be to maximize overall category profit pool & its share of that pool.
- 48. Take Private Label Seriously Brands should include in their marketing plan on how to limit Encroachment of Private Labels. Private Labels
- 49. Taking firm considered action, Brand- name manufacturers can successfully fight Private Label Challenge
- 50. RECAP Stem Encroachment by Private Label by Innovating Wisely Sparingly usage of Fighting Brands Investing in Brand Equity Managing Each Category Managing the Price Spread Use category profit pools as a Performance Measure Take Private Label Seriously Building Trade Relationship Exploiting Sales Promotion tactics
- 52. DISCLAIMER Created by Khushi Sahu IIT BHU,during an internship by Prof. Sameer Mathur, IIM Lucknow. www.IIMinternship.com