Post on 17-Aug-2015
PGP30148Nadeem
PGP30292Tushita
PGP30151Nandita
PGP30135Garima
Under the guidance of:
Brand ManagementAugust, 2015
Section B, Group 7
WHAT ARE PRIVATE LABELS?
PRIVATE LABEL BRANDS ARE THOSE MANUFACTURED OR
PROVIDED BY ONE COMPANY FOR OFFER UNDER ANOTHER
COMPANY'S BRAND
CONSUMER
INSIGHTS
INCREASE IN INFLUENCE FOR
PRODUCT CATEGORY
USE EXCESS
PRODUCTION
CAPACITY
MANUFACTURERS
IMPROVED
QUALITY
HIGH
SUCCESS
IN
EUROPE
EMERGENCE OF
NEW
CHANNELS
CREATION OF NEW
CATEGORIES
DEVELOPING
PREMIUM PVT LABEL
BRANDS
Brands have a
run start
Favourable
purchase process
Brands valuabl
e for retailer
s
Excess emphasis on pvt. labels dilutes
strength
NOT MUCH OF A THREAT
EVALUATING PRIVATE LABELS BUSINESS
Private label audit
Impact of
private labels on national brands
Profitability - full
cost and marginal cost basis
WINNING STRATEGIES
Invest in
brand equity
Manage each
category
Exploit sales
promotion
tactics
Manage the price
spread
Build trade relationshi
ps
Innovate wisely
Use fighting brands sparing
ly
Category profit as
performance measure
Take private labels
seriously
Asia
Growth -> Why so slow?•Asian shoppers – brand loyal•Retailers have not invested in marketing; virtually copy-and-pasted the European model
India
• Least developed private label market in South-east Asia•Modern trade
penetration – 5%• 50% for most
Southeast Asian markets
Major Brands
ABG FeastersKitchen’s Promise
Best of India
RelianceReliance Select,
Reliance value, Healthy Life, Good life and
Dairy Pure
Future’s GroupTasty Treat,
Fresh & Pure, Clean Mate,
Ektaa, Premium Harvest, Sach
V-MartV-Fresh V-Needs
Spencer’sSmart Choice
•Private label caters to a segment that wants to participate in the modern trade experience but is not as brand savvy•Growing levels of disposable income•Rise of modern trade•For decades, we have been purchasing open stuff from local grocery stores
Basic Positioning
Competitive Frame of Reference
Super Market Packaged food brands
POPsExpected product with
basic product featuresPODs
Lower price
Panta
loon
Wes
tsid
e
Shop
pers
Sto
p
Life
Style
Rel
ianc
e Tre
ndz
Visha
l0%
20%
40%
60%
80%
100%
Store Composition across retail outlets
Private Labels National Brands
Started in 1991
Owned by K Raheja
Group
74 Store
sPioneered launch of private
labels in IndiaFirst Private
Label- STOP in 1994
Private Labels
contribute 20% of sales
Apparel Category
Brands Private Labels
Family & friends
Endorsements
Family & friends
Endorsements
Sales Personn
el Opinion
Sales Personn
el Opinion
Past Experienc
e with Brand
Past Experienc
e with Brand
Advertising
Advertising
In Store Promoti
on
In Store Promoti
on
Sales or
Display
Sales or
Display
Apparel Category
Brands Private Labels
Brand
Loyalty
Brand
Loyalty
DurabilityDurability
ComfortComfort
Brand ImageBrand Image
Fabric Quality
Fabric Quality
PricePrice
Apparel Category
Brands Private Labels
Packaging
Store Display
Credibility
Variety Seeking Behavio
urPrice & Quality
Brand Equity
Brand Awareness Parent Brand : Good;Private Label itself : Low
Brand RecallLow. On the spot purchase
MEN’S FORMAL WEAR
Private Label
Shirts Trousers
STOP ₹999-1799 ₹1299-1699
Acropolis ₹799-899 -Austin Reed
₹1299-2099
₹1700-1900
National Brand
Shirts Trousers
Wills Lifestyle
₹1499-2300
₹1699-1799
Arrow ₹1599-2599
₹1399-2199
Van Heusen
₹1499-2000
₹1599-2000
WOMEN’S WESTERN WEAR
Private Label
Tops Dresses
STOP ₹299-1099 ₹999Incense ₹899-1199 ₹1299-
1499Latin
Quarters₹999-1690 ₹1800-
2490National Brand
Tops Dresses
Wills Lifestyle
₹600-1500 ₹900-2500
UCB ₹500-4000 ₹2000-8000
Levis ₹400-2000 ₹800-3500
PRICE
Reduce Prices
PRODUCT
Fabric Quality
Increase Variety
PLACE
Increase Number of
Stores
PROMOTION
Focus on In-House
Promotion
Product Display
Strategies for Growth of Private Labels
40% margins on
private labels
35% sales from
private labels
20% sales (₹1500 cr)
from private labels
25-30% of digital
accessories sales
Summary
HBR Article Overview
Global Context
Indian examples of Private labels in food, apparel & ecommerce
Application of Brand Positioning & Brand Resonance Models
CREDITSGMID Database
http://www.indiaretailing.com/7/23/25/9469/The-Growth-of-Private-Labels-in-India
http://indianonlineseller.com/2014/04/private-labels-boost-sales-of-online-retailers-like-myntra-fabfurnish-by-40/
http://www.business-standard.com/article/management/fight-or-play-in-private-label-114042700607_1.html
http://www.fashionunited.in/news/apparel/shoppers-stop-bets-big-on-private-labels-080820124017
http://www.thehindubusinessline.com/industry-and-economy/wooing-buyers-with-private-labels/article5278637.ece
http://www.nitinbhatia.in/marketing-case-study/private-labels-long-way-to-go/
http://www.nielsen.com/us/en/insights/reports/2014/the-state-of-private-label-around-the-world.html
http://www.reliancefreshdirect.com
http://www.irdindia.in/journal_ijrdmr/pdf/special_iss_1/10.pdf
Video:- https://www.youtube.com/watch?v=hWRJ_OuNj6A