Private labels are store brands that are owned, controlled, and exclusively sold by retailers. They come in various forms like store brands, store sub-brands, and umbrella branding. Private labels have improved quality and are seen as good value compared to national brands. In India, private labels are growing in popularity in segments like apparel, consumer durables, and FMCG. Successful Indian private labels include Future Group's Tasty Treat and Care Mate brands. Major retailers like Big Bazaar, Reliance, and Aditya Birla have established their own private label brands that are performing well. However, retailers need to balance promoting private labels with supporting national brands to avoid depressing the overall category.

1. Brand versus
private labels:

2. What are private labels?

3. Private Labels are Retailers own, control,
and exclusively sell store brands
Private Label are a ‘Good Alternative’ to
Other Brands, Offering the Same Quality &
Value
Private labels are regarded as good Value
for Money, and Quality on Par with the Big
Brands.

4. TYPES OF PRIVATE LABELS
Store brands - The retailer's name is
very evident on the packaging.
Store sub-brands - Products where the
retailer's name is low-key on the
packaging.
Umbrella branding - A generic brand,
independent from the name of the
retailer.

5. Threat posses by private label

6. Improved quality of private label product
Private label quality levels are much higher than ever
before and they are more consistent in categories
historically characterised by little product innovation

7. Development of premium private
label brand

8. European supermarket’s success
In European supermarkets higher private label sales
result in higher average pretax profit

9. Emergence of new channels
Mass merchandisers , warehouses clubs and other
channels account for a growing percentage of sales of dry
groceries, household cleaning products etc

10. What drives private-label shares
Product category characteristics: the product is
inexpensive, easy, low risk purchase for the
consumer
New product activities: national brands are
offered in few varieties , enabling a private label
with a narrow line to represent a clear
alternative to the consumer

11. Private label characteristics: private label
goods have been available to consumer for
many years , distribution is well developed.
Price and promotion factor: retail gross
margins in the product category are
relatively high

12. Strength of brands

13. Purchase process favours brand
name products
Brand names simplifies the selection process in
cluttered product categories

14. Brand name have solid foundation
The strongest national brands have built their consumer
equities over decades of advertising and through delivery
of consistent quality

15. Brand strength parallels the
strength of the economy
As economy emerges from recession manufacturers
of national brands have increased advertising and
won back consumers who turned to private labels

16. National brands have value for retailers
When a store does not carry a popular brand
consumer are put off and may switch stores

17. If you don’t , don’t start
For manufacturers seeking only to
use excess capacity , private label
production can eventually become a
narcotic

18. Evaluating private label
business
To evaluate the effect on the business as a whole and
to keep private label operation under control
following steps must be taken

19. •Conduct a private label audit
•Calculate private label
profitability on both a full coast
and marginal coast basis
•Examine the impact of private
labels on the market share of
your national brand
•Finally, close excess capacity

20. Winning strategies
National brands manufacturers
should take the following steps
to stem any further share gains
by private labels

21. Invest in brand equities
National brands manufacturers should
focus on their brand first and make it as
strong as possible

22. Innovate wisely
Too many line extensions confuse consumer , trade
and sales force and reduce the manufacturers
credibility with the trade as an expert on the category

23. Use fighting brands sparingly
Managers should be vary of launching fighting brands
, fighting brands rarely makes money

24. Build trade relationship
The best consumer goods companies should know
more about their consumer and their categories
than any private label

25. Manage the price spread
Private label sales are twice as sensitive as
national brands to change in the price gap

26. Exploit sales promotion tactics
National brands should distribute coupons to households
in areas where retailers are aggressively providing private
label products

27. Manage each category
Each product must be treated different from other as
the price and relative profitability is different

28. Use category profit pools as a
performance measure
Calculate the total profit for all participants in a category
segment and then attributed percentage of the total to
the companies competing within the category

29. Take private label seriously
Every national brand marketing plan should include a
section on how to limit the encroachment of private
labels

30. Private Label Growth in India
. In India there is a growing trend towards
acceptance of private label brands and thus
their penetration is on the rise especially in the
apparel, consumer durables, home care and
FMCG segments. India is still an under-branded
country and in each category there is still a lot of
scope for growth, this is where the private label
comes in and the story is looking good so far.

31. Few success stories of private
labels
For instance, Future Group has already tasted the
success with its Tasty Treat brand which is just behind
Frito Lay in the potato chips segment. Its Care Mate in
the baby diaper segment has left behind Huggies in
the in-store sales. At Spencers, diapers and agarbattis
sell more than market leaders across the store chain.

33. PRIVATE LABEL BRANDS IN INDIAN RETAIL
Reliance Retail
Reliance Select
Reliance Value
Dairy Pure (dairy Products)
Future Group
Tasty Treat(Processed Food)
Sach (Toothpaste)
Ektaa (Community Food)
Premium Harvest (Staples)
Fresh n Pure (Dairy Products)
Cleanmate (Homecare)
Caremate (Personal Hygine)
Aditya Birla Retail
More(Staples)
Blue Earth(Apparels)
True(Footwear)

34. Big bazaar
Big Bazaar currently has seven different private labels including Tasty Treat,
Fresh & Pure, Care Mate, Clean Mate, Quit, Wow and Maniarrs, offering 47
different product lines. Food Bazaar undertakes below-the-line in-store
promotions such as attractive dangle.

35. John millers
• John miller is the first private label apparel brand of the
future group. It is a brand is a decade old brand which came
into existence in 1995.It is the perfect example of a private
label which has not only survived for more than a decade but
has also improved its brand image.

36. MORE
In 2007 the retail arm of Aditya Birla Group
known as Aditya Birla Retail Limited acquired a
south based supermarket chain and ventured
into the food and grocery retail sector and
expanded its presence under the brand
“more.‟ with two formats Supermarkets and
Hypermarkets.
Private Labels of More
Feasters, Kitchen's Promise, Best of India,
Enriche, 110%, Pestex, Paradise, Germex.

37. CONCLUSION
The growth of private labels in the Indian retail
industry is inevitable but retailers do need to
keep a few things in mind. Promotion of own
label and allocation of large shelf space at the
expense of well-marketed national brands can
depress the overall size and value of the
category while on the other hand, joining hands
with them and following principles of category
management can create a win-win situations for
both

38. Disclaimer
Created by Abhishek Sirohi HBTI
Kanpur during an internship by prof
Sameer Mathur IIML.
www.iiminternship.com