Private

Labels
 PRIVATE LABELS
• A private label brand(also called a reseller, store, house, or distributor brand)is a brand
that retailers and wholesalers develop.
Example- Benetton, The Body Shop and Marks & Spencer, carry mostly own-brand
merchandise.
• Private label products are those manufactured by one company for sale under another
company's brand. Private-label goods are available in a wide range of industries from food
to cosmetics.
• In Europe & Canada, store brands account for 40 percent of the items
sold and in big markets like India, China and Brazil private label value
share is 5% or less.

• Private labels are rapidly gaining grounds in a way that has many
manufactures of name brands running scared .

• Recessions increase private label sales, and once some customers

switch to private label, they don’t always go back.

• In supermarkets, private labels are big sellers in milk and cheese ,

bread and baked goods, medications and remedies, paper products
etc.
ROLE OF PRIVATE LABELS

• These brands are more profitable .

• Private label products costs low, other costs like R&D,
advertising, sales promotion, and physical distribution are
much lower.
• Many price sensitive consumers prefer store brands in certain
categories.
 Differentiati
on

Freedom to
BENEFIT create their
Lower price S OF
but higher own
PRIVATE marketing
margins LABEL plan

Freedom Strong
with consumer
pricing positionin
strategy g
1.Differentiation

Better
sales
Increase
opportuniti
the overall
es
profitabilit
y
2. Higher Margins

Increased supply
chain efficiencies

Eliminates the middle

man

Reduces cost of
delivery
3. FREEDOM TO CREATE OWN MARKETING PLAN
• Independence to the retailer to use its own innovative marketing
strategies
4. FREEDOM WITH PRICING STRATEGY
• Similar to the marketing strategy, private labels also gives the retailers
a chance to adopt their own pricing strategy

5. STRONG CUSTOMER POSITIONING

• Helps in developing the customer loyalty
• Since private labels are unique to one retail chain, there is
possibility for retailers to cultivate a sense of brand loyalty
NEED WANT DESIR
S S E

CATERED BY PRIVATE
LABELS
 NEEDS:

• Not only beneficial for retailers but are equally beneficial to the customers.
• Private label products of same quality are available at lower prices.
• Example: Big Bazar sells 5 kg sugar under the brand name of Renuka which
is around 15-20% cheaper than other 5 kg packs available in the shop.

WANTS:
• Needs directed to specific objects/services that might satisfy the need
• Big Bazar has developed Koryo brand for catering the demand of the
customers in the category Microwave ovens and television.
DEMAND:

• When a private label becomes highly successful, it grows

from private label to private brand.
• The superior quality at lower price creates demand for the
product.
• Example John Miller from Pantaloons
Various Private Labels of
Big Bazar
DISADVANTAGES

• Highly competitive market.

• If even a single product doesn’t live up to the expectations
of the customers, then the image and brand value of the
retailer as a whole goes down.
• High inventory cost.
• Excessively dependent on the supplier.
CONCLUSION

• Private label are a quite attractive proposition because they

create a win-win situation for both the customer and
retailer.
• Lower prices and higher margins.
• Quality is comparable to that of national brands.
• More deep market penetration required.
• Innovative marketing and promotional activities are the
need of the hour.