private label strategies and responses

7/31/2019 Private Label Strategies and Responses

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Private Label Strategiesand Responses


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PRESENTED BY:

Mudassar Mahmood Khan; ID No: 41018003

Muhammad Golam Kibria; ID No: 41018060

Md. Wahid Ebnay Nazrul; ID No: 41120021


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PRIVATE LABELS:

Private label products or services are typically

those manufactured or provided by one company

for offer under another company's brand. Private

label goods and services are available in a wide

range of industries from food to cosmetics to webhosting. They are often positioned as lower cost

alternatives to regional, national or international

brands, although recently some private label brands

have been positioned as "premium" brands tocompete with existing "name" brands.


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ADVANTAGESOFPRIVATE LABELS:

Control over pricing of the product/service,

Put forth own ideas on marketing plans,

Create personalized image which in turn leads to

higher customer loyalty, Higher control on production, marketing, distribution

and profits,

Give their own inputs, additional materials, logos,

tag lines, etc. Customer's changing preference - drive towards

private label products.


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WHY PRIVATE LABELS:

Branding isnt everything; its the only thing.

The decision to brand or not to brand drives the

question, What business are you in?

The decision to pursue a private label strategy

places a company in a production driven mode.

Both branded and private label strategies have

risks and rewards.


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WHY PRIVATE LABELS: (CONTD.)

The Private Label Marketing Association says that

one in five items sold in supermarkets is private

label.

Further, 75 percent of consumers think store brands

are real brands and 83 percent have purchased

store brands.

If retailers can be successful marketers of brands,

surely producers can be.


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PRIVATE LABEL STRATEGIES:

Strategy is everything.

Positioning and planning are the two overarching

principles to marketing success.

Positioning statements define a brand and the

company.

Positioning happens with or without a companys

efforts.


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PRIVATE LABEL STRATEGIES: (CONTD.)

In these tough times, consumers are demanding

greater valuewhich often translates into lower

retail margins or loss of sales.

Private label is not for everyone.

Retailers are attempting to take matters into their

own hands, continuing to build private labels thatcompete with well-known brands.


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Leverage customer insight to drive innovation and

differentiation.

Conduct sourcing to boost innovation and grossmargins.

Structure a development process that is fast and

that meets ever-changing consumer needs.

Using Customer Insights to drive more profitable

Private Label development.


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RESPONSESBYMAJORBRANDSTOPRIVATE

LABELSTRATEGIES:

Strategies taken by major brands:

Attempt to decrease cost and reduce price.

Competitive advantages over private labels because of

other favorable brand perceptions.

Cutting prices on older brands to make them moreappealing.


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RESPONSEFROM PROCTER &

GAMBLE(P&G):

Value pricing program to combat competitive inroads

from private labels and other brands.

Cut prices on a number of old standbys (e.g. Joy

dishwashing detergent, Era laundry detergent, Luvs

disposable diapers and Camay beauty soap) by 12 to 33

percent.

P & G eliminated jumbo packs, streamlined package

designs, simplified printings, and trimmed promotions,

increasing retail margins from 3.3 percent to 8.6 percent

as a result.


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RESPONSEBY HEINZE:

Emphasizing both innovations and relevance throughout

their marketing program.

Use of Hipper advertising to announce the innovations.

Keeping the price gap with private labels at under 20

percent.


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OTHERTACTICSADOPTEDBYMAJORBRANDS:

Increase R&D expenditures to improve products and

identify new product innovations.

Increase advertising and promotion budgets.

Eliminate stagnant brands and extensions and

concentrate efforts on smaller number of brands.


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OTHER TACTICSADOPTEDBYMAJORBRANDS:

(CONTD.)

Introduce discount fighter brands.

Supply private label makers.

Track store brands growth and compete market-by-

market.


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