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PRIVATE LABEL

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INTRODUCTION OF PRIVATE LABEL

Manufactured or provided by one company for

offer under another company's brand.

Available in a wide range of industries.

Positioned as lower cost alternatives to regional,

national or international brands.

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DEFINITION OF PRIVATE LABEL

Brand owned not by a

manufacturer or

producer but by a

retailer or supplierwho gets its goods

made by a contract

manufacturer under

its own label.

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TYPES OF PRIVATE LABEL

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.

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ADVANTAGES OF PRIVATE LABEL

Lower Prices

Better Margins

Offer consumer

greater value

Bargaining power tothe retailer

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DISADVANTAGES OF PRIVATE LABEL Conflict with other brands in the category.

Higher R&D expense

Higher marketing expense

If product fails, will create negative image

Inventory risk

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CONSUMER PERCEPTION

People buy more

private label.

They don not need thebrands.

People has accepted

Private Label.

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STORY WHEN PRIVATE LABEL CAME INTOPICTURE

1)In 19th century ,consumer moved from noname brand to branded product.

2)The manufacturers uses the media

3) The branded message to consumer wasone of the smart shopping

4)In 20th century, retailer were small ,leads

the brand manufacturer to establish theirpower over distribution channels.

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CONTI

5)In 1970s retailer started to develop their national

chains like metro, expanded internationally &consolidated to global player.

6)The retail started to sell non-CPG product,e.g walmart

sales were $150 billion on non-CPG.

7)Private label refer as own label,storebrands,distributed-owned brands

8)Global private label now approach one trillion dollars.

9)Traditionally, the image of private label was cheap and

nasty substitute because of its packaging, but nowchanged..

10)some of private label were high quality but less than

the manufacturer brand because of discounting factor.

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compan

y

Total

sales($

billion)

Private

label %

Private

label

sales($

billion)

Sales($

billion)

compan

y

1)Wal-Mart 316 40 126 75 1.nestle

2)Metro 73 35 26 57 2.P & G

3)Tesco 71 50 36 51 3.Johnson

& Johnson

4)Kroger 61 24 15 50 4.Unilever

4)royal

Ahoid

56 48 27 33 5.Pepsico.

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IS PL ARE BRANDS!

1)Any product is not brand have limited market appeal.2)Because of more investing in pl was successful and

they position the pl in their own rights.

3)Pl share increases from 33 % to 50 %in dozen years,increase in emotion and imagery then a functionallogic.

4) Gives more importance to aware the customer.

5)Two types of store brands:

i)premium lite:better and cheaper "sold at discount.

ii)premium price: high in price, superior in quality.but

cheaper then.

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BENEFIT OF PREMIUM LITE PRODUCT

Margin is high

Not much spending on ads.as manufacture

brand do..

Helps to raise the image .

Rated in the top ten brand in many category.

Upgrading the pl products.

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BETTER PROFIT MARGIN ON PL

important reason for carrying pl by retailer.

Generate high margin because:

i)supplier have no market power.

ii)product differentiation is absent.

iii)sell to professional retailer buyers who are well

informed about the quality and availability.

Gross margin on pl is 25-30%,high in health and

cosmetic category,then..

Retailer put more emphasis on pl.

Customer in particular category divide into 4 groups

brand buyers,pl buyers, random buyers, toss-ups.

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PRIVATE LABEL MATURITY CURVE

HIGH MATURITY STAGE

UK introduction of premium product

high quality and high price

transition pl compete with premium brands.

quality improved product quality, in terms of

India ingredients, packaging etc.

of the nascent stage major focus on price,less focus on quality

product price

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WHYTHE GROWTH?

Consolidation of retailers

Brands sell to same retailers and become a

commodity Retailers need differentiation and better margin

Declining retail prices (womens apparel prices

dropped 2.4% 2007 vs. 06)

Globalization of Production

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NATIONAL BRAND COUNTER STRATEGIES

Develop unique products and stay ahead as a trendleader

Create own stores

Develop a compelling marketing strategy Increase brand loyalty

Combine effort by offering exclusive lines. I.e, SimplyVera, American Living, Liz & Co

Create one shot exclusive deliveries and SKUS

Evaluate sourcing strategy and production cost

Maintain net price (minimal promotions & discounts)

Improve forecasting and turn around time

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National brand should.

What This Means

Change mind set and realize that Private Labels arecompeting brands Innovate and stay as market leaders to beat PL Stay focused on target audience Increase and market brand imagery to gain and maintaincustomer loyalty Partner with retailers to produce exclusive brands,SKUS, one-time offers or lines Price competitively and streamline expenses

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FUTURE OF PRIVATE LABELS

Becoming national premium lifestyle brands:

INC, Alfani, Arizona

Branching out to create specialty chain business:George apparel stores,Wal-Mart, UK

Increasing depth of multi dimensional

merchandising product mix (Tony Hawk mens,

boys, footwear and etc)

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SOME INDIAN PL

Jade Blue

Mochi Ka Juta

Food Bazaar

Pantaloon

Westside

Naturals

Reliance fresh

Patidar

Shree ji

Induben-Khakhrawala

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10 PS OF PL1. Product: quality is equal to national brand.2. Partnership: work in extra mile in terms of

support,marketing,mechandising e.t.c.

3. Planogram:ensuring every product leads to salesand profit, delist the slow movers.

4. Packaging:reflect quality and performance ofoverall brand & from inside as firstimpression.,as 70% of purchase decisiononly at pop.

5. Pricing:provides the high perceived value tocustomerWithout leaving profit.

6. Position:position mark the one that you wantto compete directly against .

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7. push: let the branded player spend money to develop

category awareness, once customer in store, retailer

have major impact.

8. personnel:

9. promotion: by display and through features to gain

customer attention.

10. pride: take pride in your brand, treat it and market it

with the respect it deserves.

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WHAT PRODUCTS ARE SOLD AS STORE BRANDS?

Major supermarkets, drug chains and massmerchandisers today offer:

These include full lines of fresh, frozen andrefrigerated food.

canned and dry foods

snacks, ethnic specialties

pet foods

health and beauty care

over-the-counter drugs cosmetics, household and laundry products,

lawn and garden chemicals, paints, hardware,auto aftercare, stationery, and housewares.E.t.c.

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WHO MAKES STORE BRANDS?

1) Large national brand manufacturers: that utilize

their expertise and excess plant capacity to supply

store brands

2) Small, quality manufacturers :who specialize inparticular product lines.

3) retailers and wholesalers: that own their own

manufacturing facilities.

4) Regional brand manufacturers that produce private

label products for specific markets

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STORE BRANDS IN INDIA:

1)As retail is still under unorganized structure.

2) it contributes a turnover of Rs.700 Cr in the organizedstructure.

3) India is expected to achieve a sizeable volume in the

coming 3-5 years.

4) store brands include mainly food and apparelindustry.

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RETAIL PLAYERS HAVING STORE BRANDS IN INDIA ARE

FOOD AND GROCERY FASHION OTHERS

Spencer's Daily Shoppers' Stop Vivek's

Adani- Rajiv's Westside Planet M

Subhiksha Lifestyle Music World

Nilgris Piramyd Crossword

Nirma-Radhey Ebony Gautier

Globus Lifespring