Private labels are not a new phenomena in the FMCG industry, but during the last decade

private label strategies have intensified (Kumar & Steenkamp 2007).

Establishing private labels is complex, since the products produced must be able to compete
with national brands (Ailawadi 2001).

Private labels became a possibility for the retailers to increase their margins and restore the
balance of power on the market.

Another motive was the usage of private labels as a tool for retailers to differentiate themselves
and create customer loyalty through unique offers.

Retail Revolution” is just beginning in India. This presents a unique opportunity in time to
“organized” retailers in the western world to leverage and scale-up in India utilizing their well
defined and proven processes, procedures and controls.

Traditionally private label helps consumers reduce their weekly shopping costs and provides
retailers with an opportunity to boost sales and grow their margin. But the landscape is
evolving, driven on one side by savvy and smarter shoppers and on the other by a fierce price
war between retailers in a number of countries.

The significance of retail brands or retail store brands has greatly increased over the past
two decades and played role in changing several purchase and consumption behaviors,
particularly in grocery retail stores.

In India, they currently constitute approximate 6% of market share, and compete in

numerous product categories with key national and international manufacturers’ brands.

(RELATIONSHIP OF IN-STORE BRANDS AND CONSUMER LOYALTY: EXPLORING

OPPORTUNITIES AND CHALLENGES FOR INDIAN RETAILERS Dr. Manish Bansal
2016 Asia Pacific Institute of Advanced Research (APIAR))

Various studies indicate that there are now consumer segments, which are very favourable to
in store retail brands (Livesay and Lennon, 1978; Baltas and Doyle, 1999; Mieres et al., 2006).

(Winning Indian retail sector report pwc 2011).

India has a large and aspirational middle-class of 75 million households or 300 million
individuals. Middle-class consumers want products which are value-driven.
• India also has 500 million Indians under the age of 25. Young Indians are driving purchases
in mobile phones, fashion, accessories, food and beverages, quick service restaurants, etc.
Young Indians have access to more money than before and with this has come independence,
aspirations and a demand for products. (Winning Indian retail sector report pwc 2011).

The 700 million Indians residing in rural India are an opportunity that retail and consumer
(R&C) companies cannot ignore. Penetration levels for several products, such as personal care,
hair care, skin care, consumer durables and electronics are low in rural India. Retail and
consumer companies who localise their products for this market, with regard to price points,
packaging, stock-keeping units (SKU) size, promotion, will succeed.

India-based retail incumbents are expanding their presence across a range of categories,
experimenting with formats, launching private labels, strengthening supply chain systems and
more.

Demanding consumers: Indian consumers are demanding access to products and services that
delight and excite them, are of good quality, and provide value for money.

Increasing incomes: Strong GDP performance, capital market growth and the emergence of
new industries are creating new millionaires and boosting income levels. This acts as an
incentive for consumers to spend more on products. They are also experimenting with brands,
trying new products, etc.

Evolving consumption patterns: Traditionally, the focus of Indian consumers was on saving.
However, positive macro-economic fundamentals, an evolving retail market, lifestyle
influencers, etc. are ensuring that consumers spend more across categories. Other aspects, like
the emergence of double-income households, easier access to credit and society’s acceptance
of self-indulgence, are changing purchasing habits.

Growth of private labels

Most retailers in India are bullish about the success of their private label products across food
and non-food categories. PwC’s Strategic Issues for Retail CEOs indicates that retailers are
launching new private label offerings, enhancing their private label portfolios and will be
launching robust promotional offers to quickly move their own brands. India’s major retailers
are expected to embark upon the following strategies for their private label products:

• Increase the range of offerings

• Increase share of revenue from private label sales

• Embark upon promotional offers and sales

• Increase the visibility of products in store outlets

• Offer selected products through other retailers’ outlets

Thus, Indian consumers are value- conscious. Private labels offer consumers the twin
benefits of quality and value for money.

Private labels: Consumers want quality products priced competitively. Price is the primary
determinant of purchase for many Indian consumers

The study was an attempt to find out the effect of Sales Promotion, Price and Premium
Promotion, on Consumer Based Brand Equity.

The dimensions of Consumer Based Brand Equity under study were Brand Awareness and
Associations, Perceived Quality and Brand Loyalty.

The consumer can be influenced to change purchase timing or purchase quantity, switch
brands, increase consumption of the product category, switch stores, or search for promotions.

Total size of Indian retail industry is around INR 16 Trillion (RASCI, 2011). It is the largest
industry in India and contributing around 10 percentage of the India’s GDP.

In developing markets, such as India, private labels account for 7–8% of the food and grocery
market.

Consumer preference for Fast Moving Consumer Goods (FMCG), is based on quality and
affordability, in the high inflationary markets led to the emergence of private labels

Sales promotions are part of an integral marketing communications mix. They offer extra value
and incentives to customers to visit a store or purchase merchandise during a specific period of
time (Ogden, Ogden, 2005,).