Private label products in India have grown significantly in recent years as more shoppers look for value and are less brand loyal, however national brands still dominate the market and must implement strategies like investing in brand equity, innovative line extensions, and competitive pricing to defend against the threat from private labels. One example of a successful private label brand in India is John Miller, a shirt brand that has grown from a private label to a private brand targeting premium customers with high quality products at competitive price points.

2. Private-label products are typically those
manufactured by one company for offer under
another company's brand
They are often called as retail store brands

3. India represents the least-developed retail
market in Southeast Asia
Modern trade penetration is 5%, compared to
more than 50% for most Southeast Asian
markets

4. But

5. India is one of the most successful private-label markets
in the region
Private label grew 27% between 2012 and 2014

6. What’s driving this growth?

7. New generation of shoppers is less brand-loyal and
more open to trying new products.

8. Private label caters to a segment that wants to
participate in the modern trade experience but is
not as brand savvy
Shoppers are looking to trim their shopping bills
and find greater value for money,

9. This is a key reason why private label can be
successful in India.

10. And while private label has gained traction
and will continue to grow, what should
brand managers do??

11. 7 golden tips for national
brand managers

13. Invest in brand equities

14. But the brand’s core promise that it will get clothes cleaner
than any other product has never been compromised.
P&G has made 70 improvements to Tide since its launch

16. Innovate
.
wisely

17. Many line extensions confuse consumers, the trade,
and the sales force, and reduce the manufacturer’s
credibility with the trade as an expert on the category
This opens the door for a private-label program that focuses
just on a brand’s best-sellers

18. Oreo came up with a line extension of orange
Oreo marketed it through constant advertising

20. Brand positioning

21. It is very difficult to change the image of a brand as
human mind is not ready to accept the change in the
views they have already formed about particular thing
and then form a new image so quickly, but this is where
the role of the successful and intellectual marketers
comes

22. Vodafone changed the positioning that Hutch had
developed in the minds of Indian consumers by
replacing hutch dog ad with Vodafone Zoo Zoo’s ad

23. Even most trusted brand of India TATA’s had to
undergo a makeover to appeal to the younger
and more knowledgeable generation

24. Use fighting brands sparingly

25. Fighting brands must be price positioned between
private labels and the national brands they aim to
defend

27. Build trade relationships

28. Manufacturers must leverage their knowledge
to create a win-win proposition for their trade
accounts

30. Loan retailers an accountant to educate them about
private-label profitability

31. Explain that the shopper who buys a national
brand rather than the private label in the same
category spends more per supermarket visit

32. National-brand manufacturers can suggest and pay
for tests that compare the sales and profitability of a
store’s current shelf-space allocation plan

34. Manage the price spread

35. National-brands must monitor the price gap to the distributor
and to the end consumer between each national brand and
the other brands, including private labels

37. Exploit sales-promotion tactics.

38. Compare and save
How to avoid this????

39. Brands must reward
retailers for
increasing sales
volume
Distribute coupons to households in areas
where retailers are aggressively providing
private-label products

40. Coca cola India conducts in store campaigns
to promote sales

42. .
Manage each category

43. Low private-label penetration categories
such as candy and baby food

44. Managers must understand and sustain the barriers
to entry—such as frequent technological
improvements within a category, intense competition
among national brands

45. Emerging private-label
penetration catogery

46. Consider value-added packaging changes and line
extensions—that make the product stand out on the shelf,
keep consumers’ attention focused on the national brands

47. Well-established private-label penetration

48. . The emphasis must be on lowering the costs in the
supply chain—through minimum orders, direct
shipment discounts and more efficient trade deals ;
save money for reinvestment in the brand

50. Take private labels seriously

51. Every national-brand marketing plan should
include a section on how to limit the
encroachment of private labels.

52. National-brands should bring legal actions
against copycat private labelers who use the
same packaging shapes and colors as the
national brands

55. India is the world's biggest market for
biscuits with a market share of 22 per cent
in volumes

56. But the competition is
very high from national
brands and private
labels

57. Competitors
Britannia
Parle
Private labels

58. The way to target Indian consumer's
stomach is through competitive pricing,
high volumes and strong distribution,
especially in rural areas.

59. The focus was to target the top 10 million households
which account for 70 per cent of cream biscuit
consumption

60. The Made in India tag meant using locally-
sourced ingredients, modification of the
recipe to suit Indian tastes and possibly
cheaper ingredients, a smaller size and
competitive prices.
Made in India tag is used

61. Kraft foods launched its Oreo cookie at Rs 5
for a pack of three to drive impulse purchases and
trials,
Rs 10 for a pack of seven and Rs 20 for a pack of
14 for heavy usage

62. Oreo has very careful marketed its line extensions by
constant advertising

63. The company focused on using the togetherness
concept to sell Oreos in India, with television forming
the main medium of communication although other
media are also being tapped

64. Oreo is driving point-of purchase sales with store
displays and in-store promotions in a bid to
overtake market leader Britannia Good Day's
distribution

65. Now Oreo India is growing into an Rs
500 crore brand with a market share of
35 percent.

66. Pitfalls to be avoided by national brand managers

67. Jumping in without
a strategy
Always have a strategy on how to tackle private label products

68. DO not have an aggressive strategy against
private label products
Do not expect immediate results for any strategy

69. Concentrate on quantity and not quality

70. If a brand doesn’t have its own private label ,
don’t start it now
Having a private label may lead to excessive quantity
demand which in turn reduces the quality

71. Make sure that line extensions doesn’t lack originality

72. This mistakes by national brand managers can show
a way for private label managers to find the success

73. Success story of a private label

74. It is a shirt brand which has grown from
private label to private brand

75. It is targeted at premium segment customers
Its price ranges from 300 to 600

76. But john miller’s low price ,high quality and
constant innovation gives it a good market
share in India
Competition from Peter England
and john players is very high

78. "These slides were created by by Sai Kiran Nagabhyru as part
of an internship done under the guidance of Prof. Sameer
Mathur (www.IIMInternship.com)"
-Sai Kiran Nagabhyru