brands versus private labels: fighting to win

Brands Versus Private Labels Fighting to Win

Who is private label?

What are private labels?

WHY ARE PRIVATE LABELS PREFERED BY RETAILERS?

WHY ARE PRIVATE LABELS PREFERED BY RETAILERS? LET’S LOOK AT ADVANTAGES

HIGHER PROFIT MARGINS

REDUCED DELIVERY COST

ELIMINATE MIDDLE MAN

DIFFERNTIATE RETAILERS

SET YOUR OWN PRICE

SET YOUR OWN PRICE

Private Label Brands in Indian Retail Industry

COMPANY NAME DEGREE OF PENETRATION

TRENT 90%

RELIANCE RETAIL 80%

PANTALOON 75%

NILGIRIS 38%

PIRAMYD 30%

FOOD WORLD 22%

IMPROVED QUALITY PRODUCTS

IMPROVED QUALITY PRODUCTS

EUROPEAN PRIVATE LABEL SUCCESS

ENTRY INTO NEW PRODUCT CATEGORY

WHAT HAPPENS TO NATIONAL BRANDS?

WHAT HAPPENS TO NATIONAL BRANDS?

NO

PEOPLE STILL LOVE BRANDS

BRANDS ARE ESTABLISHED

STRONG ECONOMY BUILDS STRONG BRAND

BRANDS ATTRACT CUSTOMERS TO STORES

SHOULD BRANDS MANUFACTURE FOR PRIVATE-LABELS THEN? LET’S LOOK AT ADVANTAGES

USE OF EXCESS MANUFA-CTURING

CAPACITY

BETTER CONTROL OVER MARKET

COMPETITIVE ADVANTAGE

LET’S LOOK AT THE DISADVANTAGE

INCREASED MANUFACTURING COMPLEXITIES

BAD RELATIONS WITH RETAILERS

CAN HURT YOUR BRAND

CAN HURT YOUR BRAND

•Do Private Label Audit •Evaluate Business on Full costs Rather than Incremental cost •Examine the Side Effects •Close the Excess Capacity

DEFENSE STRATEGY?

LET’S LOOK AT THEM

MAKE BRAND STRONG INVEST IN EQUITY

INNOVATE CAUTIOUSLY

BUILD RELATIONSHIP

MANAGE EACH CATEGORY KNOW YOUR PRODUCT

CAPTURE THE RETAIL SPACE

DON’T UNDERESTIMATE PRIVATE LABELS

RECAP THREAT BY PRIVATE LABELS BRANDS v/s MANUFACTURERS SHOULD BRAND MANUFACTURE PRIVATE LABELS?

EVALUATE PRIVATE LABELS DEFENSE STRATEGIES

THIS SLIDES WERE CREATED BY SANKET. SHAH VJTI,MUMBAI DURING AN INTERNSHIP BY PROF. SAMEER MATHUR,IIM-LUCKNOW www.IIMInternship.com