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Transcript of 135697522-Research-Report.pdf
RESEARCH REPORT
ON
“CUSTOMER PERCEPTION TOWARDS PRIVATE LABEL IN COMPARISON WITH MANUFACTURING BRANDS”
Under the guidance of:
MR.VIBHUTI Narayan singh
FACULTY OF
Rbmi business school
GREATER NOIDA
SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMENT
By:
Rao afjal
PGDM (MARKETING & hr)
Rbmi business school
GREATER NOIDA
Student’s declaration
I, Rao afzal, herby certify that the survey, data collection and analysis
work related to research project on, “CUSTOMER PERCEPTION
TOWARDS PRIVATE LABEL IN COMPARISON WITH MANUFACTURING
BRANDS” has been carried out exclusively on my own efforts under the
supervision of Mr. Vibhuti Narayan Singh.
I hereby declare that this work was neither published nor submitted to any
other institution.
Date:
Place:
Rao Afzal
PGDM 2ND YEAR
ACKNOWLEDGEMENT
There is always a sense of gratitude which one expresses to others for the genuine
help they render during all phases of life. I would like to express my gratitude
towards all those who have been helpful to me in getting this mighty task of
research to a successful accomplishment.
First of all, I would like to be thankful to My Parents who always give Support to
me. Then I also consider it a pleasant duty to express my heartfelt appreciation,
gratitude and indebtedness to our respected faculty Mr. Vibhuti Narayan Singh
for his keen interest, invaluable pain taking & excellent guidance, patience,
endurance, encouragement & thoughtful advice throughout the project work
duration.
I am also thankful to all my friends who gave me constant & continuous inspiration
to complete this project.
(Rao Afzal)
CONTENTS
S. No.
TOPICS Page No.
1 Executive summary 1
2 Introduction 2-9
3 Literature review 10-11
4 Indian Retail industry 12-22
4.1 background 12-15
4.2 Current status 15-20
4.3 Contribution to the Indian economy 21
4.4 Future prospect in retail business 22
5 Story of private brand 23-38
5.1 The evolution of private label branding 23-30
5.2 The growth of private labels 31-34
5.3 Advantages of private label brand 35
5.4 Disadvantages of private label brand 36
5.5 Commercial objectives behind launching private labels
37-38
6 Statement of research objectives 39
7 Research Methodology 40-42
8 Research limitation 43
9 Analysis and interpretation of Data 44-58
10 Findings 59-60
10 Recommendations & Conclusion 61-62
11 Bibliography 63
Annexure 64-67
Executive Summary
During this research project, through primary research, I gathered a deeper
understanding and the marketing of private label products. I utilized
different researching methods to gather data on customer perception
towards private label. These methods included collecting both primary and
secondary data. Primary data was collected through personal interviews of
customer. I also created a questionnaire that rated a consumer’s attitude
and their perception towards private label in comparison to manufacturing
brands. Secondary data was collected using the library at Apeejay Institute
of Technology School of management and various research reports
available on internet.
My goal for this project was to understand consumer perception towards
private label products and make a comparison of customer perception with
manufacturing brands. I did this through collecting primary data and
analyzing secondary data. I collected my primary data using a survey that I
initiated in Ansal Plazza and Great India Palace while consumers were
shopping. I split the survey up between the different store tiers to get a
better understanding of the consumer’s attitudes at different locations. I
focused on how the consumer perceived private label in comparison to
manufacturing brand.
This research project gave me confidence and helped me improve my
research skills. I was able to cross reference the demographics of each
store that I surveyed to draw conclusions on the data I collected. These
conclusions lead me to recommendations. The skills that used for this
project I can bring into the business world.
INTRODUCTION
Customer Perception
Perception
Perception can be describe as “how we see the world around us.” Two
individual may be subject to the same stimuli under apparels the same
condition, but how they recognize them, select them, organize them, and
interpret them is a highly individual process based on each person’s one
needs, values and expectations. The influence that each of these variables
has on the perceptual process, and its relevance to marketing.
Definition
“Perception is defined as the process by which an individual selects,
organized and interpret stimuli into a meaning full & coherent picture of the
world”. A stimulus is any unit of input to many of the senses. Examples of
stimuli include products, packages, and brand names, advertising and
commercial. Sensory receptors are the human organ that receives sensory
inputs. All of these functions are called into play- either single or in
combination-evaluation and use of most consumer products. The study of
perception is largely the study of what we subconsciously add to or subtract
from raw sensory input to produce our own private picture of the world.
Perceptual select
Consumers subconsciously exercise a great deal of selective as to
which aspect of the environment-which stimuli-they perceive. An individual
may look at some things, ignore others and turn away from still others. In
total, people actually receiver perceive only a small fraction to the stimuli to
which they are expose.
Nature of stimulus
Marketing stimuli include an enormous number of variables that affect the
consumer’s perception such as the nature of the product, its physical attributes,
the packages design, the brand name, the advertisement and commercial, the
position of a print ad or the time of a commercial and the editorial environment.
a) Contrast: contrast is one of the most attention- compelling attributes of a
stimulus. Advertiser often uses extremely attention getting device to achieve
maximum, contrast and thus penetrate the consumer perceptual screen.
B) Expectations: People usually see what they expect to see and what they
expect to see is usually based on familiarity previous experience or preconditioned
set in marketing context people tend to perceive product and product attributes
according in their own expectation.
c) Motives: People tend to perceive thing they need or want the stronger the
need the greater the tendency to ignore unrelated stimuli in the environment. An
individual perceptual process simply attunes itself more closely to those elements
of the environment that are important to that person.
Important selective perception concepts
As the preceding discussion illustrates, the consumer’s “Selection” of stimuli
from the environment is based on the interaction of expectation and motives with
the stimuli itself. These factors giver rise to a number of important concepts
concerning perceptions.
a) Selective Exposure: Consumers actively seek out messages they find
pleasant or with which they are sympathetic and actively avoid painful
threatening ones. Consumers also selectively expose themselves to
advertisement that reassures them of the wisdom of their purchase
decision.
b) Selective Attention: Consumers have a heightened awareness of the
stimuli that meet their need or interest and an owner awareness of stimuli
irrelevant to needs.
c) Perceptual Defense: consumers subconsciously screen out stimuli that
are important to for them not to see even though exposure has already
taken place. Thus threatening or otherwise damaging stimuli are less to be
consciously perceived than are neutral stimuli at the same level of
exposure.
d) Perceptual Blocking: Consumers protect themselves from being
bombarded with stimuli by simply” tuning out”- blocking such stimuli from
conscious awareness. This perceptual blocking –out is somewhat to the
mechanical “zapping” of commercial using remote controls.
CONSUMER DECISION MAKING AND BUYING PROCESS
Marketing have go beyond the various influences on buyers and
develop an understanding of how consumers actual make their buying
decisions. Mainly the buyer plays these roles in buying decisions:
Initiator: a person who first suggests the idea of buying the product or
service.
Influencer: a person whose view or advice influences the decision.
Decider: a person who decide on any component of a buying decision.
Buyer: the person who makes the actual purchase.
User: a person who consumers or uses the product or service.
Decision Making Process
Need Recognition
The buying process starts when the buyer recognizes a problem or need.
The need can be triggered by internal or external stimuli. In the
former case, one of the person normal needs – hunger, thirst and
sex- rise to a threshold level and become a drive. In the relative
case, a need is roused by an external stimulus.
Marketers need to identify the circumstances that trigger a particular
need. By gathering information from a number of consumers, marketers
can identify the most `frequent stimuli that spark and interested in a
product category. They can develop marketing strategies that trigger
consumer’s interest.
Information search
An aroused consumer will be inclined to search for more information. We
can distinguish between two levels of arousal. The milder search state is
called heightened attention.
At this level a person simply becomes more receptive to information about
a product.
At the next level, the person may enter active information search: looking
for reading material, phoning friend and visiting stores to about the
product. Consumer information sources fall into four groups
a) Personal sources: family, friends, neighbors
b) Commercial sources: advertising, salespersons, dealers,
packaging
c) Public sources: mass media, consumers-rating organizations
d) Experimental sources: handling, examining, using the product
Each information source performs a different function in influencing the
buying decision. Through gathering information, the consumer learns about
competing brands and their features.
Evaluation of alternatives
There is no single evaluation process used by all consumers or by one
consumer in all buying situation. There are several decision evaluation
processes, the most current models of which see the process as cognitively
oriented.
Some basic concepts will help us understand consumer evaluation
processes.
a) The consumer is trying to satisfy a need.
b) The consumer is looking for certain benefits from the product
solution.
c) The consumers see each product as a bundle of attributes with
varying abilities of delivering the benefits sought to satisfy this
need.
Consumers vary as to which product attributes they see as most relevant
and the importance they attach to each attribute. They will pay the most
attention to attributes that deliver the sought benefits the market for a
product can often be segmented according to attributes that are silent to
different consumer group.
Purchase Decision
In evaluation stage, the consumer forms preferences among the brands in
the choice set. The consumer \may also forms an intention to buy most
preferred brand. However, two factors can intervene between the purchase
intentions and the purchase decision. The first factor is the attitude of the
others. The second, factor is unanticipated situational factor that may erupt
to change the purchase intention.
A consumer’s decision to modify, postpone or avoid a purchase
decision is heavily influenced by perceptive risks. The amount of perceived
risk varies with amount of money at stake, the amount attribute
uncertainty and amount of consumer self-confidence.
Post purchase behavior
After purchasing the product the consumer will experience some level of
satisfaction ort dissatisfaction. The3 marketers job does not end when the
product is bought marketers must monitor post purchase satisfaction; post
purchase action and post purchase product users.
CONSUMER DECISION MAKING AND
BUYING PROCESS
Need Recognition
Information Search
Cultural,
Social,
Individual and
Psychological
Evaluation of Alternatives
Purchase
Post purchase Behavior
Introduction to the Topic
The topic of my research is “Customer perception towards the Private Label
in comparison with manufacture brands”. It is not an easy task to judge the
perception of the consumer as the time passes.
What the customer think about the private label brands?
What they think when private label compare with the manufacturing
brands?
Private Labels Brands (PLBs), also called store brands (SBs), are
goods owned and merchandised by retailers. A private-label product is a
manufactured good that a retailer purchases from a supplier, with the
intention of renaming, repackaging and selling it under the distributor’s own
brand name.
Manufacturing Brands are also known as the National Brands. Brand name
used by a manufacturer whenever that product is sold. A nationally
distributed product brand name. May also be distributed regionally or
locally.
LITERATURE REVIEW
Previous studies related to Private Label Brands
A review of previous studies related to PLBs brings forth researches carried
out related to certain issues. For example researchers have found that one
of the interesting phenomena concerning PLBs is the fact that their growth
has been highly uneven across product categories (Hoch and Banerji,
1993). Dhar and Hoch (1997) found that by far the largest source of
variation in PLB share across markets, retailers, and categories (40%) is
due to the differences among product categories. Previous research
investigating these across-category differences has looked at them mostly
from the manufacturer and retailer perspectives. In studying the retailer
economics of PLB programs, researchers have mostly examined factors
such as the technology investments necessary, size of category, category
margins, national brand advertising and promotional activity levels and so
forth (Hoch and Banerji, 1993; Sethuraman, 1992). Thus, Hoch and Banerji
(1993) find that PLBs have higher shares in large categories offering high
margins, and where they compete against fewer national manufacturers
who spend less on national advertising. The gap between national brands
and PLBs in the level of quality also depends on the technology
requirements in manufacturing that varies across categories (Hoch and
Banerji, 1993). Research has been more limited on the consumer-level
factors that make PLBs differentially successful across product categories.
Some researchers studying consumer-level factors for PLB proneness--such
as Richardson, Jain and Dick (1996)--have not studied across category
variations at all. They have chosen instead to aggregate data across
categories. Those few studies that have looked at cross-category
differences from a consumer-factor perspective have sometimes omitted
important variables: Sethuraman and Cole (1997). In this research, we
focus upon these consumer-level perceptions of intercategory differences
especially in food and grocery segment. By doing so, we hope to shed light
on what has made PLBs successful overall, drawing implications both for
retailers marketing PLBs as well as the national brands that compete with
them. Thus, a review of previous studies undertaken in the area of PLBs
indicates that, research has been more limited on the consumer-level
factors that make PLBs differentially successful across product categories.
Given the lack of studies undertaken in the area of understanding Indian
customers’ attitude and perception of PLBs, the present study has been
undertaken to gain an insight into how customers in India perceive PLBs.
The findings of the study will be helpful for retailers to understand the
importance of various factors in being successful with customers in the PLBs
in food and grocery category.
INDIAN RETAIL
INDUSTRY
Background
The Indian retail industry is divided into organized and unorganized sectors.
Organized retailing refers to trading activities undertaken by licensed
retailers, that is, those who are registered for sales tax, income tax, etc.
These include the corporate-backed hypermarkets and retail chains, and
also the privately owned large retail businesses. Unorganized retailing, on
the other hand, refers to the traditional formats of low-cost retailing, for
example, the local kirana shops, owner manned general stores, paan/beedi
shops, convenience stores, hand cart and pavement vendors, etc.
India’s retail sector is wearing new clothes and with a three-year
compounded annual growth rate of 46.64 per cent, retail is the fastest
growing sector in the Indian economy. Traditional markets are making way
for new formats such as departmental stores, hypermarkets, supermarkets
and specialty stores. Western-style malls have begun appearing in metros
and second-rung cities alike, introducing the Indian consumer to an
unparalleled shopping experience.
The Indian retail sector is highly fragmented with 97 per cent of its
business being run by the unorganized retailers like the traditional family
run stores and corner stores. The organized retail however is at a very
nascent stage though attempts are being made to increase its proportion to
9-10 per cent by the year 2010 bringing in a huge opportunity for
prospective new players. The sector is the largest source of employment
after agriculture, and has deep penetration into rural India generating more
than 10 per cent of India’s GDP.
Comparative Penetration of Organized Retail (in %)
India is the 4th largest economy as regards GDP (in PPP terms) and is
expected to rank 3rd by 2010 just behind US and China. On one hand
where markets in Asian giants like China are getting saturated, the AT
Kearney's 2006 Global Retail Development Index (GRDI),for the second
consecutive year Placed India the top retail investment destination among
the 30 emerging markets across the world.
Over the past few years, the retail sales in India are hovering around
33-35 per cent of GDP as compared to around 20 per cent in the US. The
table gives the picture of India’s retail trade as compared to the US and
China.
Retail Trade – India, US and China
Trade (US$
billion)
Employment
(%)
Shops
(million)
Organized
sector share
(%)India 180-394 7 12 2-3China 360 12 2.7 20US 3800 12.6-16 15.3 80
The last few years witnessed immense growth by this sector, the key
drivers being changing consumer profile and demographics, increase in the
number of international brands available in the Indian market, economic
implications of the Government increasing urbanization, credit availability,
improvement in the infrastructure, increasing investments in technology
and real estate building a world class shopping environment for the
consumers. In order to keep pace with the increasing demand, there has
been a hectic activity in terms of entry of international labels, expansion
plans, and focus on technology, operations and processes.
This has lead to more complex relationships involving suppliers, third
party distributors and retailers, which can be dealt with the help of an
efficient supply chain. A proper supply chain will help meet the competition
head-on, manage stock availability; supplier relations, new value-added
services, cost cutting and most importantly reduce the wastage levels in
fresh produce.
Large Indian players like Reliance, Ambanis, K Rahejas, Bharti AirTel,
ITC and many others are making significant investments in this sector
leading to emergence of big retailers who can bargain with suppliers to reap
economies of scale. Hence, discounting is becoming an accepted practice.
Proper infrastructure is a pre-requisite in retailing, which would help to
modernize India and facilitate rapid economic growth. This would help in
efficient delivery of goods and value-added services to the consumer
making a higher contribution to the GDP.
International retailers see India as the last retailing frontier left as the
China’s retail sector is becoming saturated. However, the Indian
Government restrictions on the FDI are creating ripples among the
international players like Wal-Mart, Tesco and many other retail giants
struggling to enter Indian markets. As of now the Government has allowed
only 51 per cent FDI in the sector to ‘one-brand’ shops like Nike, Reebok
etc. However, other international players are taking alternative routes to
enter the Indian retail market indirectly via strategic licensing agreement,
franchisee agreement and cash and carry wholesale trading (since 100 per
cent FDI is allowed in wholesale trading).
Current Status
The BMI India Retail Report for the first-quarter of 2011 forecasts that total
retail sales will grow from US$ 392.63 billion in 2011 to US$ 674.37 billion
by 2014. Strong underlying economic growth, population expansion, the
increasing wealth of individuals and the rapid construction of organized
retail infrastructure are key factors behind the forecast growth. With the
expanding middle and upper class consumer base, there will also be
opportunities in India's tier II and III cities.
Mass grocery retail (MGR) sales in India are expected to undergo
enormous growth over the forecast period. BMI predicts that sales through
MGR outlets will increase by 145 per cent to reach US$ 21.35 billion by
2014.
BMI forecasts consumer electronic sales at US$ 29.09 billion in 2011,
with over-the-counter (OTC) pharmaceutical sales at US$ 2.69 billion. The
former sub-sector is expected to show growth of 55.6 per cent between
2011 and 2014, reaching US$ 45.27 billion, with projected double-digit
growth of key products such as notebooks, mobile handsets and TVs. OTC
pharmaceuticals, meanwhile, should increase slightly more, by 56.5 per
cent throughout the forecast period, to reach US$ 4.21 billion.
China and India are predicted to account for more than 91 per cent of
regional retail sales in 2011, and by 2014 their share of the regional market
is expected to be more than 92 per cent. Growth in regional retail sales for
2011-2014 is forecast by BMI at 48.1 per cent, an annual average 15 per
cent.
According to a McKinsey & Company report titled 'The Great Indian
Bazaar: Organized Retail Comes of Age in India', organized retail in India is
expected to increase from 5 per cent of the total market in 2008 to 14 - 18
per cent of the total retail market and reach US$ 450 billion by 2015.
Furthermore, according to a report titled 'India Organized Retail
Market 2010', published by Knight Frank India in May 2010 during 2010-12,
around 55 million square feet (sq ft) of retail space will be ready in Mumbai,
national capital region (NCR), Bengaluru, Kolkata, Chennai, Hyderabad and
Pune. Besides, between 2010 and 2012, the organized retail real estate
stock will grow from the existing 41 million sq ft to 95 million sq ft.
Driven by the growth of organized retail coupled with changing
consumer habits, food retail sector in India is set to be more than double to
US$ 150 billion by 2025, according to a report by KPMG.
India's retail market is expected to be worth about US$ 410 billion,
with 5 per cent of sales through organized retail, meaning that the
opportunity in India remains immense. Retail should continue to grow
rapidly—up to US$ 535 billion in 2013, with 10 per cent coming from
organized retail, reflecting a fast-growing middle class, demanding higher
quality shopping environments and stronger brands, according to the report
‘Expanding Opportunities for Global Retailers’, released by A T Kearney.
India has been ranked as the third most attractive nation for retail
investment among 30 emerging markets by the US-based global
management consulting firm, A T Kearney in its 9th annual Global Retail
Development Index (GRDI) 2010.
Foreign direct investment (FDI) inflows between April 2000 and October
2010, in single-brand retail trading, stood at US$ 197.04 million, according
to the Department of Industrial Policy and Promotion (DIPP).
• Carrefour, the world’s second-largest retailer, has opened its first
cash-and-carry store in India in New Delhi. Germany-based wholesale
company Metro Cash & Carry (MCC) opened its second wholesale
centre at Uppal in Hyderabad, taking to its number to six in the
country.
• Electronic retail chain major, Next Retail India, plans to open 400
showrooms across the country during January-March 2011 increasing
the total number of retail stores to 1,000 by the end of the fiscal year
2010-11.
• Jewellery retail store chain Tanishq plans to open 15 new retail stores
in various parts of the country in the 2011-12 fiscal.
• V Mart Retail Ltd, a medium-sized hypermarket format retail chain, is
set to open 40 outlets over the next three years, starting with 13
stores in 2011, in Tier-II and Tier-III cities.
• Reliance Retail, the wholly owned subsidiary of Mukesh Ambani's
Reliance Industries, is set to open 150 stores by the end of March
2011 and double the number of stores across the country in all
formats within five years.
• Future Value Retail, a Future Group venture, will take its hypermarket
chain Big Bazaar to smaller cities of Andhra Pradesh, with an
investment of around US$ 1.54 million to US$ 4.41 million depending
on the size and format.
• RPG-owned Spencer's Retail plans to set up 15-20 new stores in the
country in 2011-12.
• Spar Hypermarkets, the global food retailing chain of the Dubai-based
Landmark Group, expects to start funding its India expansion beyond
2013 out of its local cash flow in the country. So far, the Landmark
Group has invested US$ 51.31 million in setting up five hypermarkets
and plans to pump in another US$ 51.31 million into the next phase
of expansion.
• Leading watchmaker Titan Industries Limited plans to invest about
US$ 21.83 million for opening 50 premiums watch outlets Helios in
next five years to attain a sales target of US$ 87.31 million.
• British high street retailer, Marks and Spencer (M&S) plans to
significantly increase its retail presence in India, targeting 50 stores
in the next three years.
• Spain's Inditex, Europe's largest clothing retailer opened the first
store of its flagship Zara brand in India in June 2010. It further plans
to open a total of five Zara outlets in India.
• Bharti Retail, owner of Easy Day store—supermarkets and hyper
marts—plans to invest about US$ 2.5 billion over the next five years
to add about 10 million sq ft of retail space in the country by then,
according to a company spokesperson.
Policy Initiatives
100 per cent FDI is permitted under the automatic route for trading
companies for cash & carry trading wholesale trading/ wholesale trading.
FDI up to 51 per cent under the Government route is allowed in retail trade
of Single Brand products, according to the Consolidated FDI Policy
document.
The Consumer Affairs Ministry has given the green signal to allow 49 per
cent FDI in multi-brand retail. It has written a letter to this effect to the
Commerce Ministry. "Multi-brand retail should be permitted with a cap of 49
per cent… A significant chunk of investments should be spent on back-end
infrastructure, besides logistics and agro-processing," the Consumer Affairs
Ministry had said in response to the discussion paper floated by the
Department of Industrial Policy and Promotion in June 2010 on allowing 100
per cent FDI in multi-brand retail.
The Securities and Exchange Board of India (SEBI) has notified the increase
in the retail investment limit to US$ 4,391.19 in initial public offers (IPOs).
The new norms will be applicable to issues that have yet not opened for
subscription.
Road Ahead
According to industry experts, the next phase of growth is expected to
come from rural markets.
According to a market research report published in June 2008 by RNCOS
titled, 'Booming Retail Sector in India', organized retail market in India is
expected to reach US$ 50 billion by 2011. The key findings of the report
are:
• Number of shopping malls is expected to increase at a CAGR of more
than 18.9 per cent from 2007 to 2015
• Rural market is projected to dominate the retail industry landscape in
India by 2012 with total market share of above 50 per cent
• Driven by the expanding retail market, the third party logistics
market is forecasted to reach US$ 20 billion by 2011
• Apparel, along with food and grocery, will lead organized retailing in
India
Further, the luxury brand in the country is estimated to be worth about US$
4.06 billion-US$ 4.51 billion and is expanding rapidly driven by the growing
aspirations of youth and income levels in the country. Most people
constantly scale up spends as aspirations grow.
Thus, major international brands are in the process of expanding their retail
presence. For instance, Paul & Shark now has two stores with Hyderabad
and will have few more by next year, Zegna, another Italian brand, known
for its formal wear and quality suits, is also expanding and Diesel will have
seven stores in the country.
Meanwhile, European football clubs, including Manchester United, Chelsea
and Liverpool, are increasingly scouting for partnerships in India to sell
their merchandise and also set up chain of coffee clubs and theme shops.
The stationery retailing market in India is also witnessing steady growth
due to the arrival of organized players in the business. It is estimated that
the Indian office products industry is in the range of US$ 2.22 billion with
stationery comprising US$ 666.89 million-US$ 889.19 million and growing
at 30 per cent per annum. Future Group and Reliance Retail are some of
the players who are already tapping into the sector and have launched
brands such as Staples and Office Depot.
Modern retail – swot analysis
SWOT analysis is a tool for analyzing modern retailing. In this analysis, a
study can be made regarding the strength, weaknesses, opportunities and
threats of retail industry.
Strength of modern retail
The benefits of larger organized retail segments are several. The
consumers get a better product at cheaper price. So consumers get
value for their money.
Employment opportunities both direct and indirect have been
increased. Farmers get better prices for their products though
improvement of value added food chain.
A large young working population with median age of 24 years,
nuclear families in urban areas, along with increasing working women
population and emerging opportunities in the service sector are going
to be the key growth drivers of the organized retail sector in India.
It has also contributed to large scale investments in the real estate
sector with major national and global players investing in devolving
the infrastructure and construction of the retailing business.
The trends that are driving the growth of the retail sector in India are
low share of organized retailing and falling real estate prices.
Increase in disposable income and customer aspirations are important
factors.
Increase in expenditure for luxury items is also vital.
The governments of states like Delhi and National Capital Region
(NCR) are very upbeat about permitting the use of land for
commercial development thus increase the availability of land for
retail space.
The growth of sachet revolution emerges for reaching to the bottom
of the pyramid.
The annual growth of departmental stores is estimated at 24%.
Weakness of modern retail
The rapid development of retail sector is the sharp improvement in the
availability of retail space. But the current rally in property prices, retail real
estate rentals have increased remarkably, which may render a few retailing
business houses unavailable. Retail companies have to pay high rentals
which are blockage in the turn of profits.
Small size outlets are also one of the weaknesses in the Indian
retailing. 96% of the outlets are lesser than 500 sq.ft. The retail chains are
also smaller than those in the developed countries for instance, the
superstore food chain, food world is having only 52 outlets where as
Carrefour promotes has 8800 stores in 26 countries.
The volume of sales in Indian retailing is also very low. India has
largest population in the world and a fast growing economy.
Opportunity of modern retail
Global retail giants take India as key market .It is rated fifth most
attractive retail market. The organized retail sector is expected to
grow stronger than GDP growth in the next five years driven by
changing lifestyles, increase in income and favorable demographic
outline. Food and apparel retailing are key drivers of growth.
Rural retailing is still unexploited Indian market.
It can become one of the largest industries in terms of numbers of
employees and establishments.
Indian retail industry has come forth as one of the most dynamic and
fast paced industry with several players entering the market.
Threats of modern retail
One of the greatest barriers to the growth of modern retail formats
are the supply chain management issues. No major changes are
needed in the supply chain for FMCG products; these are well
developed and efficient. For perishables, the system is too complex.
Government regulations, lack of adequate infrastructure and
inadequate investment are the possible bottlenecks for retail
companies. The supply chain for staples is less complicated than the
net groceries. But staples have a unique problem of non-
standardization.
Organized retailing in India is yet to get an industry status.100%
Foreign Direct Investment (FDI) is not permitted in retailing in India.
Ownership of retail chain is allowed only to the extent of 49% but
without FDI, the sector is deprived of access to foreign technologies
and faster growth.
Lack of uniform tax system for organized retailing is also one of the
obstacles. Inadequate infrastructure is likely to be an obstacle in the
growth of organized retails.
The unorganized sector has dominance over the organized sector in
India because of low investment needs.
Labour rules and regulation are also not followed in the organized
retails. The sector is unable to employ retail staff on contract basis.
Problem of car parking in urban areas is serious concern.
Difficult to target all segments of society.
Emergence of hyper and super markets trying to provide customer
with –value, variety and volume.
Heavy initial investment is required to break even with other
companies and compete with them.
Retail today has changed from selling a product or a service to selling
a hope, an aspiration and above all an experience that a consumer
would like to repeat.
Retail chains are yet to settled down with proper merchandise
mix for the mall outlets. Retailing today is not about selling at the
shop, but also about researching and surveying the market, offering
choice, competitive prices and retailing consumers as well.
Contribution to the Indian economy
The effects of retail on Indian economy are:
Employment Generation
Retailing provides employment to making 8% workforce in India, because it
is highly labour intensive. It has also patented to generate an additional
eight million jobs, direct and indirect.
Development of small scale units
Retailing also helps small scale units to easy access market. They provide a
platform for small scale unit’s goods. Retailing in India support 4 lakh plus
medium handcraft manufacturers.
Growth of real estate
The requirement of space is one of the biggest demands, so the real estate
has also grown over the last years. In the years to come Indian economy
will also see the real estate sector climbing the steps of organized retail
estate sector.
Future prospect in retail business
FDI helps to meet the global economies, societies and domestic
players to a closely integrative traditional village i.e. one is for all and
all for one.
Division of labour, specialization, developing competition and
innovation lead to economic growth.
Liberalization of trade and cross border mergers and joint ventures
has also driving forces.
A significant size in the organized retail and is expected to grow from
3% to50% in the coming year.
Technology, management, expertise, market intelligence are also
some of the opportunities to domestic business.
STORY OF PRIVATE
LABEL The Evolution of Private Label Branding
Overview
The definition of private label branding has evolved significantly over time.
Some would argue the term “private label” is a misnomer of great
proportions. There is no question that the words “private label”
acknowledges the birth, history and existence of generic and store brands.
Yet, the term does not adequately capture the extent to which private label
has progressed. Today's retail marketers are managing their proprietary
brands with the same combination of care and innovation as manufacturers
of national brands.
In recent years, retailers have been liberating themselves from the
traditional definition of private label marketing as being the poor relative of
national brand consumer goods, and, in doing so, opening up huge
opportunities for private label branding. These opportunities require the
adoption of a different set of marketing and branding practices to support
and propel the retailer’s business and marketing ideals for its private label
brands.
The key to successful marketing management for today’s retailers is to
understand the contribution and role of their proprietary or “own” brands in
the long-term business strategy and marketing mix of the retail store and
consider both the supply side and the demand side of the equation.
Effective category management can enable retailers to solidify and optimize
supply-chain relationships. Strategic brand management goes hand in hand
with these endeavors to establish sustainable points of difference in each
aisle and segment within the store. It also spurs decisions about how to
appropriately define the retailer’s “own” brand portfolio in order to
galvanize consumers to connect and reconnect with its franchise in a
compelling manner.
Historical Marketplace Dynamics
Private label brands were traditionally defined as generic product offerings
that competed with their national brand counterparts by means of a price-
value proposition. Often the lower priced alternative to the “real” thing,
private label or store brands carried the stigma of inferior quality and
therefore inspired less trust and confidence. Yet, they still grew and
prospered by providing consumers lower priced options for what was often
a low involvement purchase decision. Retailers continued to push more and
more private label products into different categories of the marketplace
because they represented high margins and the promise of profitability with
little to no marketing effort.
Over the years, this proliferation of private label offerings perpetuated a
myopic approach to private label brand management. Previously successful
yet, currently flailing private label brands clued today’s retailer into some
important pitfalls to avoid in proprietary brand portfolio management. Most
importantly, these examples underscore a need for private label marketers
to be cognizant of how their initiatives play a role in the overall marketing
mix and the long-term definition and impact of their portfolio.
Historically, private label retailers appreciated that it was important to tout
certain category and product benefits to incite consumers to purchase. Yet,
rather than look at the consumer directly to understand his brand and
product selection criteria, they took their cues from the national brand
competitors that had already identified and manifested some of the
category’s salient attributes and benefits through advertising, packaging
and other brand messaging. The result was often a series of “me-too”
private label positioning that strived to emulate the category leader.
This approach to private label management had resounding impacts on a
category as a whole as well as the individual product offerings within it. By
commoditizing their private label products, retailers undermined and
commoditized a category’s overall potential. They adopted the role of the
omnipresent, cheaper choice and often forced branded competition to lower
their prices to compete, thereby erasing margins for national products and
private label alike. It also created missed opportunities for all category
players (manufacturers, suppliers or retailers), since they were not
considering latent or untapped consumer needs that their category had the
ability to fulfill.
A New Approach to Private Label Branding
In order to be truly successful, retailers must advance from the generic or
store brand mindset of the past to a new private label paradigm. Many
retailers have begun to describe their private label brands as “own” brands
because there is recognition that these proprietary, exclusive offerings are
tools that represent momentous power and potential for the retail store.
The term “own” brands acknowledges that today’s visionary retail
marketers have powerful proprietary portfolios that they control and
manage and there is potential to reap bigger and better rewards by taking
a closer look at the way they orchestrate the role and expression of these
brand offerings in the eyes of consumers in each product category. Those
retailers who appreciate the magnitude of this brand opportunity have
created a new industry standard in their realm of influence and activity.
“Own” brands are articulated and developed in a way that they not only fit
with the brand promise of the retail store, but if effective, they also give
consumer drivers a key point of departure to enhance and celebrate the
overall retail brand proposition to keep consumers coming back for more.
Implications for Retail Marketers
1) Collaborative category management is vital. Strategic category
management is instrumental for a retailer to realize its “own” brand goals
and aspirations. It requires the development of a symbiotic relationship
with manufacturers and/or suppliers to elevate relationships and further a
mentality of partnership.
Contrary to the previous mindset of private label management, this
approach does not commoditize the manufacturers' brands by offering a
comparable product at a significantly lower price point. This would
undermine the value inherent in the whole category and lower margins
overall.
In this new way of thinking, the retailer and trade partnership becomes
more about cooperation and less about the retailer negotiating with the
manufacturer or supplier on price and listings. By working together, the
parties involved can solidify trade relationships and ensure that the
category as a whole remains profitable and emotionally appealing to the
customer so that both private label and branded goods win.
In the spirit of effective category management, there should be
collaboration in understanding and deciding how to optimize the product
lines and SKUs that will progress the category definition as a whole and
determine plan grams and shelving scenarios to rally the greatest degree of
category interest and excitement from consumers.
2) Recognize that a salient consumer need should be the
springboard for an “own” brand proposition.
The “own” brand promise should be defined as a holistic representation of
resonant functional and emotional attributes and benefits. This ensures that
it takes into account need states that are important to consumers and
offers a credible point of difference from other category players.
By crystallizing a differentiated value proposition, an effective “own” brand
considers the approach that national brands use to arrive at a holistic
benefit proposition rather than the specific positioning they use. This
furthers an “own” brand promise that has been informed by the
competition, but is clearly not a “me-too” expression. It is also successful
because it demonstrates a commitment to offer consumers multiple options
and varieties with distinct attributes, benefits and price points.
3) Do not underestimate your power to leverage and own the
consumer connection.
A successful “own” brand literally has the ability to own the consumer
connection. If it is broadly defined, it has the capacity to strike a chord with
consumers in multiple product categories.
Unlike national branded products, “own” brands are exclusively available
through a specific retailer and can often transcend specific product
categories because they use a consumer focus rather than a product focus
as their brand foundation.
They have the potential to be magnets that draw consumers into one
specific retail store over another. Take Wal-Mart’s success with its exclusive
brands like Ol’Roy for dog food or Reli-On for diabetes. These brands inspire
such trustworthiness and allegiance from their loyal consumers that Wal-
Mart is their pre-meditated retail source whether they are running low on
dog food or diabetes medication.
The exclusive brands may be the reason that consumers are initially drawn
into the store, but once they are there, Wal-Mart also has the opportunity
to encourage them to spend more on incidental or impulse purchases.
Therefore, exclusive or “own” brands not only reinforce enduring loyalty
and positive feelings for the overarching retail brand, they often enable the
retailer to capture a more significant share of the consumers’ wallet, heart,
mind and lifestyle than a national product brand.
4) Optimize and promote synergies of the points of touch you own
and influence.
Retail marketers are becoming more cognizant of how various aspects of
their “own” brand marketing mix work together to create a strong,
consistent brand message.
By developing store environments, in-store messaging like signage,
merchandising systems, and packaging as well as external messaging like
circulars, catalogs and advertising in a congruent manner, the retailer is
able to create an enduring impression in-store, at shelf, at the time of
purchase and during usage.
Many of these brand expressions do not require revolutionary change for
extended periods of time, so they perpetuate an eloquent branded voice
because of strategic integration rather than constant investment and
reinvestment.
5) Strike the right balance of similarities and differences with brand
messaging and portfolio offerings.
Brand architecture is a critical consideration for “own” brand marketing.
Once the brand proposition is solidified, the brand architecture strategy
enables decision makers to promote this promise at the retail store level in
order to engender a sense of familiarity, recognition and trust.
At the same time, “own” brands tend to straddle a broader set of aisles
than national brands. Because of this, it becomes more and more important
to differentiate an “own” brand’s attributes and benefits on an aisle,
category and product basis.
For instance, when shopping at a drugstore, the consumers’ purchase
decision pathway in the over-the-counter cough and cold care category is
quite distinct from their drivers in the paper goods category. Brand
architecture and design expression can help the consumer navigate the
breadth of the “own” brand portfolio and understand its depth of expertise
in different areas of the store.
6) Calibrate the “own” brand promise and the proof in the product.
It is important to consider how package design, nomenclature and product
strategy can propel and support the retail marketer’s vision for the “own”
brand promise.
Re-branding efforts often go hand in hand with packaging redesign and
sub-branding initiatives. These are critical tools that help to visualize and
verbalize what the “own” brand stands for and demonstrate its expertise
and points of difference in various product categories. These brand
executions are the vehicles through which “own” brands deliver on
category-mandated functional and emotional virtues, spurring consumers to
select the retailer’s brand over others.
However, decorative packaging and product names are not enough for
today’s sophisticated shopper. The packaging may be the reason that a
consumer picks a specific item off the shelf, but if the product does not live
up to his anticipations in use, he will be less inclined to repurchase.
Product quality and innovation are a necessary functional underpinning for
an “own” brand offering. This is the reason that re-branding efforts are
often synchronized with product portfolio rationalization. By undergoing
quality assessments, the retailer is able to ensure that its products live up
to consumers’ expectations and that negative consumption experiences do
not undermine the brand promise that is being developed and executed.
The Growth of Private Labels
Private labels are slowly gaining prominence at big retail stores. They have
almost all the elements of a big label—a brand name and exclusivity. Maybe
they lack a few things, like a big advertising budget and a sporty price tag.
But still, they are big and are here to stay. In fact, chances are that they
comprise nearly 40% of your shopping bags while you shop at retail outlets
like Westside, Shoppers Stop, Reliance Fresh, and Big Bazaar and so on.
Be it Tata’s Westside, Kishore Biyani’s Big Bazaar or RPG Group’s
Spencer’s, everyone is betting big on private labels for they are fast
becoming one of their major revenue spinners. So what makes you buy
them, knowingly or unknowingly? What makes the retailers go all the way
to launch and maintain these brands? What makes these brands successful
despite no advertising?
How big are the private labels?
Private labels, often referred to as in-house brands or store brands, are
those that are owned by the retailers themselves. For example, Shoppers
Stop has several in-house brands such as STOP, Kashish, LIFE, Vettorio
Fratini, Elliza Donatein and Acropolis. Reliance Fresh sells grocery such as
pulses, rice, tea, noodles under the Reliance Food brand and the dairy
products such as its curd is sold under the Dairy Life brand.
According to a FICCI-Ernst & Young 2007 report, as quoted in The
Marketing Whitebook 2009-10, the retail sector in India was worth $280
billion, of which organized retail comprised 5% at $14 billion. In an
ASSOCHAM-KPMG joint study, the size of the retail industry was pegged at
$353 billion in 2008. It was estimated to grow to $410 billion by 2010, of
which organized retail would value approximately $51 billion.
According to Images Retail Report 2009, as quoted in "Indian Retail: Time
to Change Lanes" by KPMG; private label brands constitute 10-12% of
organized retail in India. Of this, the highest penetration of private label
brands is by Trent at 90%, followed by Reliance at 80% and Pantaloons at
75%. Big retailers such as Shoppers Stop and Spencer’s have a penetration
of 20% and 10% respectively. Globally, store brands constitute nearly 17%
of retail sales. In fact, international retailers such as Wal-Mart and Tesco
have 40% and 50% of in-house brands in their stores.
Store brands: An overview
In India, the growth of private labels has been phenomenal and is slowly
gaining more store space. Aditya Birla Retail, which operates the ‘More for
You’ food and grocery chain, is reportedly pursuing strategies to increase its
private label sales from the current 3% to 10-15% of total sales in the next
two to three years.
Store space: Nearly 40-50% of the store space was dedicated to store
brands. These products shared the shelf space with other branded products.
For example, in the Reliance store, its curd brand Dairy Life was placed
next to the other brands, such as Amul.
A number of store brands: This is especially true for apparel. Shoppers
Stop has several in-house brands. For example, in the women’s wear
category itself it has STOP, Kashish, Remika etc. Similarly, in the men’s
wear category, it has STOP, Life, Vettorio Fratini, and so on. These
products are not differentiated from the other brands in terms of store
space.
Price tag: These products were priced substantially lower than the other
brands. For example, Reliance’s tea brand sported a price tag of Rs 118 for
500 gms, whereas Brooke Bond, which was placed just next to it, was
available for Rs 132 for 490 gms.
Catered to a number of categories: In these stores, the store brands
were not limited to a particular category. For example in Shoppers Stop, it
extended from apparel for men, women and children to crockery,
kitchenware, and even furnishings. Similarly, in a Reliance store, it
extended from pulses to spices, noodles and even dairy products.
How do in-house brands work?
For a retailer, there are several advantages of introducing in-house brands
in their portfolio. Atulit Saxena, COO of Future Brands, explains,
“Traditionally, private brands worldwide were always conceived to take on
category leaders. If we are talking about soaps for instance, you might
have 15-20 soaps, but as a large organized modern retail player, you might
want to create your own trademark in your store, which is of the same
quality, but at a price that is substantially lower.” This also becomes the
differentiating factor for a retailer, as these brands are exclusively available
at that retail outlet only. So a customer, for example, may want to revisit
the store if they find the quality comparable to others at a more affordable
price point.
As these brands create an identity for the retailer, there is a lot of work that
goes into the pre-launch phase.
The quality of the products is also of big concern due to obvious reasons.
However, these products have not been able to shrug off the tag of inferior
brands. The designs are both done in-house and are outsourced as well. For
example, while Shoppers Stop frequently ties up with young designers,
Pantaloons believes in having its own in-house designers.
“Private labels are highly profitable. The profits earned from them
are almost double than those from the third -party brands.”
This brings us to the point—the core strength of the retailers is retailing and
not designing and manufacturing products. 100% of our manufacturing is
outsourced. There are fairly well-established manufacturers who work with
retailers. So is there any opportunity for entrepreneurs in tying up with
these players for manufacturing these products?
Five years back, private label brands were around 17.5% in terms of sales
and today they are almost 22.5%—a 5% increase.
The road ahead
Private labels are slowly becoming the protagonist in the big Indian retail
growth story. Taking cue from the West, Indian retailers are also churning
out newer ways to increase their profit margins—one such initiative is the
introduction of in-house brands. With Indian customers increasingly
accepting these private label brands, they would soon be major contributors
to the profits of Indian retailers.
Advantages of Private Label Brands
Since manufacturers' (producers') brands have large advertising
expenditures built into their cost, a private labeler is able to buy the
same goods at a lower cost and thus sell them at a lower price and/or
at a better profit margin.
Private labelers have more control over pricing and are able to
advantageously display their own brands for maximum impact. For
example, a grocery store can quickly reduce the price of its own PLB
in order to meet or beat a competitor's price. Or the grocery store can
create a special point-of-purchase advertising display and/or give its
brand predominant shelf space in order to boost sales.
PLBs are usually priced lower than comparable manufacturers' brands
and therefore appeal to bargain-conscious consumers.
Potential to increase store loyalty, chain profitability, control over
shelf space, bargaining power over manufacturers.
Among consumers, one obvious reason for their popularity and
growth is their price advantage (averaging 21%) over national
brands.
Disadvantages of private label
1. It takes time to work up your private label with the right quality coffee.
While that is not terribly difficult, you can simply opt to have the supplier
pack one of his standard blends in your graphics.
2. Because no one else is handling your product it will have to be packed to
order, requiring some lead time from the day of order to the day of
delivery. This requires at least a bit more organizing and control of
inventory than would be necessary in purchasing the national branded,
though of course it guarantees freshness.
3. The private label roaster may have his own imperatives in terms of
production, with your order being shoved aside in favor of his own
customers' needs.
4. Although the cost of your coffee will be substantially less when bought
from a good private label supplier there will, of course, be little "help" in
marketing the product by that supplier. The selling of your own product is
likely to be entirely in your own hands.
Commercial objectives behind launching private labels
There are certain objectives that a retailer has in mind before getting into
private label goods. Figure 2 lists the benefits that a retailer expects from
the in-store brands.
Higher Margins
Private label goods are cheaper to produce than branded goods. Besides,
due to the lack of advertising and marketing expenses they provide double
advantage to the retailer when it comes to the profit margins. While
majority of branded goods provide margins in the range of 6-12%, private
label goods can offer margins up to 40%. Not only they give a higher
margin to the retailers, private labels have also changed the balance of
power between brand manufacturers and retailers, giving the latter a
decided advantage when negotiating terms with the brand manufacturers.
Stronger Customer Loyalty
As the private label offerings increase and the quality is assured, a high
sense of loyalty is cultivated among its customer base. This customer
loyalty is the result of an affinity with the retailer brand which implies that
the development of private label brands can tangibly enhance the retailer‘s
brand itself. So in the long run, the private labels become an important tool
for the retailer to establish its positioning and strategically attract the target
customers to its outlet. Numerous studies have also shown that private
label buyers are more store-loyal and not as easily influenced as brand
buyers.
Differentiation
Through private labels, retailers get a chance to bring in unique products in
their supply chains that have not been branded before. So if a retailer can
cater to the local tastes and preferences of the consumers well by top
quality private labels then they can differentiate themselves from other
stores and become destination stores. In effect, it‘s a win-win situation
even for the producers who get a chance to display their produce.
Freedom with Pricing Strategy
A retailer promoting a private label has the added benefit of greater
freedom to play with pricing strategies, as a result of which these are
overall cheaper than brand leaders. For instance, in USA, some private
labels are 25 percent cheaper than leading brands. In addition, since it is an
own private label, the retailer has the freedom to create its own marketing
strategy and have more control over its stock inventory. This command of
all the stages that a product goes through, gives the retailer high flexibility
in pricing.
Positioning during economic downturns
The growth of private labels is likely to continue in the current financial
environment as cash-strapped consumers' perception of the products as a
cheaper option changes. The price advantage of private labels leads to the
belief that these score in times of economic meltdown, and further that this
newly-acquired market share is maintained even as the recession swings
out. Even after the economy bounces back, consumers will naturally
gravitate towards products marked at lower prices yet offering the same
quality, especially where the retail name is a trusted national or regional
player.
Statement of research
objectives
To get the knowledge about the perception towards the private label.
What are the factors that affect the perception of the customer?
To draw conclusion based on the behavior of the consumer.
To know the differences in perception among different locality.
RESEARCH
METHODOLOGY
Research Methodology is ways to systematically solve the problem. The
Research Methodology includes the various methods and techniques for
conducting a Research.” Marketing Research is the systematic design,
collection, analysis and reporting of data and finding relevant solution to a
specific marketing situation or problem”. D.Slesinger and M. Stephenson in
the encyclopedia of social sciences define Research as “the manipulation of
things, concept or symbols for the purpose of generalizing to extend,
correct or verify knowledge, whether that aids in construction of theory or
in the practice of an art.”
Research is, thus an original contribution to the existing stock of
knowledge making for its advancement. The purpose of research is to
disco0ver answer to the question through the application of scientific
procedures. Our project has specified framework for collecting data in an
effective manner. Such framework is called” RESEARCH Methodology”. The
research process followed by me consists of following steps:
1. Defining the problem and research objective: It is said, “A
problem well defined is half solved”. The step is to define the problem
under study and deciding the research objective. The objective of my
research is to know the consumer perception towards private label in
comparison with manufacturing brands.
2. Development the research plan: the second of this study consists
of developing the most efficient plan for gathering data.
3. Sampling plan- A sample plan is a definite plan for obtaining a
sample from a given population. It refers to the technique or the
procedure the researcher would adopt in selecting sample items for the
sample. Sample plan may as well lay down the number of items to be
included in the sample. i.e. he size of the sample. The plan helps in
decision making in the following areas.
Universe: All customers of private label (Croma) and manufacturing
brands (LG) constitute the universe.
Sample size: this refers to the number of items to be selected from
the universe to constitute a sample. The size of sample should neither
be excessively large, nor too small, it should be optimum. The sample
size for my study is 50
Sampling procedure: It is a way through which sampling is done.
There are various procedures like random, systematic etc. The
sampling procedure for my study is convenience sampling.
Research design: Descriptive in nature.
4. Data collection: information will be collected from both primary
and secondary data.
Primary sources: Primary data are those which are collected afresh
and for the first time. I have collected primary data by conducting
survey through Questionnaire, which includes both open ended and
close-ended Questions.
Secondary sources: Secondary data are those which already been
collected by someone else and which already had been passed through
the statistical process. I have collected secondary data has been
collected through Magazines, Web sites, and Newspaper.
5. Analysis of data and interpretations: After collection of date
the analysis of data has been done through various statistical tools
and techniques. The analysis of data required a number of closely
related operations such as establishment of category, the
application of these categories to raw data through coding,
tabulation and then drawing statistical inferences.
Research Limitations
1. Due to constraints of time & financial resources, the scope of study is
limited to few customers of Greater Noida, Noida Delhi (NCR) only.
2. Smaller sample may not always give better results. Sample may not be
true representative of the whole population.
3. The possibility of biased responses is ruled out.
4. Lack of availability of full information.
5. Sometimes customers are not willing to give response.
DATA ANALYSIS AND
INTERPRETAIONS
Q.1. Do you know about the Private labels?
Responses No. of Respondents Respondents in %Yes 35 70No 0 0Little bit 15 30Total 50 100
Interpretation: As the result shows that 70% know about the private
label and 30 % know something about the private label. So we can say that
people have much awareness about the private label.
Q.2. What do you think about Private label?
Interpretation: As the result display 50% people think that private
label is outsourced from other companies (mainly local) and rest 50%
thinks that private label is manufactured by retailers which sell them.
It shows consumer perception towards the private label. It indicates that
they have good knowledge about private label.
Responses No. of Respondents Respondents in %Out sourced from other companies (mainly Local)
25 50
Manufactured by retailers which sell them
25 50
Total 50 100
Q.3. Which age groups do you belong?
Responses No. of Respondents Respondents in %18-25 25 5025-40 15 3040-55 10 2055 & above 0 00Total 50 100
Interpretation: Most of the respondents are of 18-25 and 25-40 age
group. It shows that young people have much interested in purchasing in
comparison with older one.
Q.4. Which income Group do you belong? (Monthly income)
Responses No. of Respondents Respondents in %5000-10000 10 2010000-20000 15 3020000-30000 15 3030000 & above 10 20Total 50 100
Interpretation: This graph tells us that 30% of respondents having
income between 20000 and 30000. 30% of respondents having income
between 10000 and 30000.
Q.5. which one of these do you prefer for purchasing product?
Responses No. of Respondents Respondents in %Private labels 20 40Manufacturing Brands 30 60Total 50 100
Interpretation: 40% of the respondents prefer PLBs while 60% of the
respondents prefer national level brands. Thus, it can be seen that there is
not a major difference in the preference of customers for PLBs vis-à-vis
national level brands.
Q.6. Which type of Customer you are?
Responses No. of Respondents Respondents in %Regular 25 50Seasonal 10 20Occasional 15 30Total 50 100
Interpretation: 50% customers are regular in nature. 20% are of
seasonal in nature. 30% are of occasional in nature.
Q.7. What do you think about the Quality of good?
Grade: 1-Poor 2-Fair 3- Good 4- Very Good 5-Excellent
Grade Poor Fair Good Very Good ExcellentManufacturing
Brand
0% 0% 10% 70% 20%
Private Brand 0% 20% 60% 10% 10%
Interpretation: If we compare both it can be conclude that
respondents have much more faith on the quality of manufacturing brands
rather than private brands.
Q.8. What do you think about price relevancy?
Grade: 1-Poor 2-Fair 3- Good 4- Very Good 5-Excellent
Grade Poor Fair Good Very Good ExcellentManufacturing
Brand
0% 20% 30% 30% 20%
Private Brand 10% 20% 50% 10% 10%
Interpretation: According to the graph it can be depicted that there is
no huge difference in the price relevancy in manufacturing brands and
private brands. People have faith on the price of the product but when we
compare both we find that customer trust more on manufacturing brand’s
price.
Q.9. what comes first in your mind when you want to purchase a product?
Grade: 1-Poor 2-Fair 3- Good 4- Very Good 5-Excellent
Grade Poor Fair Good Very Good ExcellentBrand Name 0% 20% 10% 50% 20%Price 0% 20% 50% 20% 10%Quality 0% 0% 0% 50% 50%Past Experience 0% 10% 20% 30% 40%Service 0% 0% 0% 60% 40%
Interpretation: According to the graph it can be said that customers
more focus on quality and service and least focus on price.
Q.10. Which of these factors influencing in purchasing of product?
Grade: 1-Poor 2-Fair 3- Good 4- Very Good 5-Excellent
Private Label
Grade Poor Fair Good Very Good ExcellentPerceived Quality 0% 30% 10% 30% 30%Price charged 0% 50% 20% 20% 10%Trust in brand 0% 20% 20% 30% 30%Packaging 0% 40% 30% 20% 10%Availability of Alternatives
0% 20% 30% 20% 30%
Sales promotion 20% 10% 30% 10% 30%Advertising 0% 10% 20% 30% 40%
Manufacturing Brand
Grade Poor Fair Good Very Good ExcellentPerceived Quality 10% 0% 20% 30% 40%Price charged 0% 10% 60% 20% 10%Trust in brand 0% 0% 20% 30% 50%Packaging 0% 30% 0% 40% 30%Availability of Alternatives
0% 10% 10% 60% 20%
Sales promotion 0% 10% 60% 10% 20%Advertising 0% 10% 10% 50% 30%
Interpretation: For private label the customer’s main focus on trust in brand and advertising and least focus on packaging and sales promotion. For manufacturing brands customer more focus on trust in brand and advertising and price charged and sales promotion. When we compare both we finds that advertisement attract customers equally for private label and manufacturing brands.
Q.11. which one of these is effective marketing techniques?
Grade: 1-Poor 2-Fair 3- Good 4- Very Good 5-Excellent
Private Label
Grade Poor Fair Good Very Good ExcellentPamphlet 20% 40% 20% 10% 10%Billboard 0% 40% 40% 20% 0%Word of mouth 0% 20% 20% 40% 20%Television 10% 0% 30% 30% 40%Newspaper 0% 0% 50% 30% 20%Magazines 10% 10% 30% 40% 10%Internet 10% 10% 10% 40% 30%In-store Promotion
0% 10% 20% 20% 50%
Manufacturing Brand
Grade Poor Fair Good Very Good ExcellentPamphlet 20% 30% 10% 10% 30%Billboard 0% 30% 50% 10% 10%Word of mouth 0% 0% 20% 50% 10%Television 0% 0% 20% 30% 50%Newspaper 0% 0% 30% 40% 30%Magazines 0% 10% 30% 40% 20%Internet 0% 0% 10% 50% 40%In-store Promotion 0% 10% 20% 30% 40%
Interpretation: For private brand in-store promotion and television are the most effective and pamphlet and billboard are least effective. For manufacturing brand television, internet and in store brands are most effective and pamphlet and billboard are least effective. When we compare both we find out that private label apply, to the some extent, similar type of marketing techniques.
Q.12. who influence you more for purchasing product?
Grade: 1-Poor 2-Fair 3- Good 4- Very Good 5-Excellent
Private Label
Grade Poor Fair Good Very Good ExcellentFriends 10% 30% 50% 0% 10%Family 10% 30% 40% 20% 0%Sales personnel 0% 40% 60% 0% 0%Store atmospheric
0% 20% 40% 30% 10%
Past experience 0% 20% 0% 40% 40%Sales promotion 0% 20% 50% 10% 20%
Advertising 10% 40% 30% 0% 20%
Manufacturing Brand
Grade Poor Fair Good Very Good ExcellentFriends 0% 10% 10% 50% 30%Family 0% 10% 30% 40% 20%Sales personnel 0% 10% 50% 40% 0%Store atmospheric
0% 30% 0% 60% 10%
Past experience 10% 10% 10% 20% 50%Sales promotion 0% 20% 20% 30% 30%Advertising 0% 10% 10% 20% 60%
Interpretation: For private brand sales promotion and past experience are the most influencing factor and family and friends are least influencing factors. For manufacturing brands friends and advertising are most influencing factors and store atmospheric and sales personnel are least effective factors. When we compare both we find out that past experience of private label is better than the manufacturing brands.
FINDINGS
40% of the respondents prefer PLBs while 60% of the respondents
prefer national level brands. Thus, it can be seen that there is not a
major difference in the preference of customers for PLBs vis-à-vis
national level brands.
Most of the respondents are of 18-25 and 25-40 age group. It shows
that young people have much interested in purchasing in comparison
with older one.
50% of the respondents perceive PLBs to be goods that are
outsourced from other companies (mainly local) and sold under the
retailer’s name while 50 % of the respondents perceive PLBs to be
goods which are manufactured by retailers selling them.
As the result shows that 70% know about the private label and 30 %
know something about the private label. So we can say that people
have much awareness about the private label.
If we compare both it can be concludes that respondents have much
more faith on the quality of manufacturing brands rather than private
brands.
According to the graph it can be depicted that there is no huge
difference in the price relevancy in manufacturing brands and private
brands. People have faith on the price of the product but when we
compare both we find that customer trust more on manufacturing
brand’s price.
According to the graph it can be said that customers more focus on
quality and service and least focus on price.
For private label the customer’s main focus on trust in brand and
advertising and least focus on packaging and sales promotion. For
manufacturing brands customer more focus on trust in brand and
advertising and price charged and sales promotion. When we
compare both we find that advertisement attract customers equally
for private label and manufacturing brands.
For private brand in-store promotion and television are the most
effective and pamphlet and billboard are least effective. For
manufacturing brand television, internet and in store brands are most
effective and pamphlet and billboard are least effective. When we
compare both we find out that private label apply, to the some
extent, similar type of marketing techniques.
For private brand sales promotion and past experience are the
most influencing factor and family and friends are least
influencing factors. For manufacturing brands friends and
advertising are most influencing factors and store atmospheric
and sales personnel are least effective factors. When we
compare both we find out that past experience of private label is
better than the manufacturing brands.
RECOMMENDATIONS
AND CONCLUSION
Recommendations
In this study, we examined how Indian customers perceive PLBs in
comparison to national label brands.
The findings of the study can be useful to retailers in formulating
strategies to make products other than the national branded ones
acceptable in the market.
An analysis of perception and satisfaction with PLBs can furthermore
help retailers in developing stronger store/PLBs and in increasing
their presence and acceptance in the market.
The findings of the present study provide important insights to all
private label manufactures in India to increase their foothold and
successfully compete in the Indian retail market.
A difference in pricing is desired and companies needs to fine tune
and concentrate more on their supply chain and logistics to bring
down costs associated with various products which they can pass on
to customers in the form of reduced prices in turn leading to increase
in customer satisfaction and acceptance of PLBs.
CONCLUSION
In conclusion it can be said that if private label manufacturers can
consistently provide value to customers on factors rated high by customers
and even if it is low on status symbol, there is a high possibility for them to
establish these brands as acceptable in the minds of customers and to
improve customers’ perception regarding the same. Though this perception
may not be as high as a branded product enjoys but it could still become
high enough for retailers to increase the sales of these brands and thereby
raise their profit margin considerably.
Customers are now ready to accept the private label brands besides
the manufacturing brands. Customers are now quality and service oriented.
BIBILIOGRAPHYBooks
C.R. Kothari - Research Methodology –Methods and Techniques (second revised edition 2009)
Dr. S.L. Gupta and Sumitra Pal - Consumer Behavior (2002)
Websites
http://www.heritage-coffee.com/PrivateLabelvs.NationalBrands.htm
http://www.myarticlearchive.com/articles/9/173.htm
www.efqm.org/en/PdfResources/ Customer %20 Perception .pdf
http://wps.aw.com/aw_carltonper_modernio_4/21/5566/1424975.cw/content/index.html
http://www.tetonsands.org/docs/PrivateLabel.pdf
www.researchersworld.com/vol2/PAPER_15. pdf
http://www.iimahd.ernet.in/assets/snippets/workingpaperpdf/2008-02-04Abhishek.pdf
http://ebookbrowse.com/aithal-rajesh-an-exploratory-study-on-the-emergence-of-private-labels-in-the-india-pdf-d47433607
ANNEXURE
Questionnaire
NAME: GENDER:
OCCUPATION: Location:
Q.1. Do you know about the Private labels?
a) Yes b) Little bit c) No
Q.2. What do you think about Private label?
a) Out sourced from other companies (mainly Local)
b) Manufactured by retailers which sell them
Q.3. Which age groups do you belong?
a) 18-25 b) 25-40 c) 40-55 d) 55 & above
Q.4. Which income Group do you belong? (Monthly income)
a) 5000-10000 b) 10000-20000 c) 20000-30000 d) 30000 & above
Q.5. which one of these do you prefer for purchasing product?
a) Private labels b) Manufacturing Brands
Q.6. Which type of Customer you are?
a) Regular b) Seasonal c) Occasional
Direction to Q.7-12: You have to give rating according to you as given below:
1-Poor 2-Fair 3-Good 4-Very Good 5-Exellent
Q.7. What do you think about the Quality of good?
a) Manufacturing Brand 1. 2. 3. 4. 5.
b) Private Label 1. 2. 3. 4. 5
Q.8. What do you think about price relevancy with the product?
a) Manufacturing Brand 1. 2. 3. 4. 5.
b) Private Label 1. 2. 3. 4. 5
Q.9. When you want to purchase a product. Which one have great chances to incline towards the product?
a) Brand Name 1. 2. 3. 4. 5.
b) Price 1. 2. 3. 4. 5.
c) Quality 1. 2. 3. 4. 5.
d) Past experience 1. 2. 3. 4. 5.
e) Service 1. 2. 3. 4. 5.
Q.10. How much chances of these factors influencing in purchasing of product?
Private Label
a) Perceived Quality 1. 2. 3. 4. 5.
b) Price charged 1. 2. 3. 4. 5.
c) Trust in brand 1. 2. 3. 4. 5.
d) Packaging 1. 2. 3. 4. 5.
e) Availability of Alternatives1. 2. 3. 4. 5.
f) Sales promotion 1. 2. 3. 4. 5.
g) Advertising 1. 2. 3. 4. 5.
Manufacturing Brand
a) Perceived Quality 1. 2. 3. 4. 5.
b) Price charged 1. 2. 3. 4. 5.
c) Trust in brand 1. 2. 3. 4. 5.
d) Packaging 1. 2. 3. 4. 5.
e) Availability of Alternatives1. 2. 3. 4. 5.
f) Sales promotion 1. 2. 3. 4. 5.
g) Advertising 1. 2. 3. 4. 5.
Q.11. which one of these is effective marketing techniques?
Private Label
a) Pamphlet 1. 2. 3. 4. 5.
b) Billboard 1. 2. 3. 4. 5.
c) Word of mouth 1. 2. 3. 4. 5.
d) Television 1. 2. 3. 4. 5.
e) Newspaper 1. 2. 3. 4. 5.
f) Magazines 1. 2. 3. 4. 5.
g) Internet 1. 2. 3. 4. 5.
h) In-store Promotion. 1. 2. 3. 4. 5.
Manufacturing Brand
a) Pamphlet 1. 2. 3. 4. 5.
b) Billboard 1. 2. 3. 4. 5.
c) Word of mouth 1. 2. 3. 4. 5.
d) Television 1. 2. 3. 4. 5.
e) Newspaper 1. 2. 3. 4. 5.
f) Magazines 1. 2. 3. 4. 5.
g) Internet 1. 2. 3. 4. 5.
h) In-store Promotion. 1. 2. 3. 4. 5.
Q.12. who influence you more for purchasing product?
Private Label
a) Friends 1. 2. 3. 4. 5.
b) Family 1. 2. 3. 4. 5.
c) Sales personnel 1. 2. 3. 4. 5.
d) Store atmospherics 1. 2. 3. 4. 5.
e) Past experience 1. 2. 3. 4. 5.
f) Sales promotion 1. 2. 3. 4. 5.
g) Advertising 1. 2. 3. 4. 5.
Manufacturing Brand
a) Friends 1. 2. 3. 4. 5.
b) Family 1. 2. 3. 4. 5.
c) Sales personnel 1. 2. 3. 4. 5.
d) Store atmospherics 1. 2. 3. 4. 5.
e) Past experience 1. 2. 3. 4. 5.
f) Sales promotion 1. 2. 3. 4. 5.
g) Advertising 1. 2. 3. 4. 5.