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Unit 13: Private Label Brands

innovative ideas to gain market share over national brands. This includes the ability to Notes
make nippy adjustments to products based on customer’s changing preferences. “The food
industry is seeing a heated battle for market share,” says David Garfield, Managing Director
and head of AlixPartners’ Consumer Product Practice. According to an AlixPartners 2011
report, this battle will continue as consumers choose value over brand loyalty.
2. Branding: Successful private label brands will be able to create better sales opportunities
for retailers. The customisation of store brand labels, such as to logos and tag lines, can
personalize a customer’s shopping experience that can lead to higher customer loyalty.

Example: Supervalu’s Wild Harvest organic food line offers its customers healthy food
options at low prices with sophisticated package design that rivals that of more exclusive national
brands.
3. Structural: Unlike national brand labels, retailers with store labels can mould the shopper’s
in-store experience. This might translate into marketing advantages gained from in-store
placement of private label products and signage.

Example: Retailers can use horizontal shelf displays techniques, such as brand blocking,
and end-cap display fixtures to make private labels stand out from national labels.
4. Value: While value is not the only reason consumers consider when choosing private
label brands, it still remains an important one. “The need for affordable packaged goods
solutions is high, and private label products are going a long way toward answering that
need,” Thom Blischok, Consulting and Innovation president at Information Resources
Inc., told Packaging Digest. The most significant advantage of store brand labels during
economic downturns is that price gains importance as consumers increasingly turn to
money-saving strategies like increasing private label brands to manage budgets.
Self Assessment

Fill in the blanks:
11. Store label merchandise, however, is slowly moving away from being considered solely
as a cost savings to consumers over ................... brands

12. Successful private label brands will be able to create better ................... opportunities for
retailers.
13. The most significant advantage of store brand labels during economic ................... is that
brand gains importance as consumers increasingly turn to bigger brands.

13.5 Buying Private Labels

Private label goods are products sold by retail stores that are also produced by the same retail
store. For example, Ralph’s supermarket will sell Tropicana orange juice and right next to it will
sell its own brand of orange juice. Private label products are always less expensive than brand
name products because they need to be able to compete with the big brands. They save money
by not having to spend money on distribution channels and advertising since they have their
own.
In the past, private label brands have been seen as inferior to brand name products. More
recently however, private label brands are growing in popularity most likely due to the economy
and growing trust in private labels. One of the first very popular private label brands that I can

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