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Retail Brands : Conceptual Insights & Research

Priorities
Surinder Pal Singh
Assistant Professor
Rai Business School
New Delhi

Submitted For:
National Seminar on Strategic Retail Management
BLS Institute of Management, Ghaziabad
October 22, 2005

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Abstract
With the growing realization that brands are one of a firm’s most valuable intangible assets,
branding has emerged as a top priority since last one decade. Given its highly competitive nature,
branding has especially become important in the retailing industry to influence customer
perceptions and drive brand loyalty.

This paper offers an insight into the need for retail brands, the economics of retail brands, the
impact of retail brands on the elements of marketing strategy and the role of retail brands in
building retailer’s brand equity. Some important areas that deserve further research are also
suggested at the end.

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Global Retailing Industry
The latter half of the 20th Century, in both Europe and North America, witnessed the emergence of
the “supermarket” as the dominant retail form. The reasons why supermarkets dominated retailing
are not hard to find. The search for convenience in shopping and consumption, coupled to car
ownership, led to the birth of the supermarket. As incomes rose and shoppers sought both
convenience and new tastes and stimulation, supermarkets were able to expand the products offered.
The invention of the bar code allowed a store to manage thousands of items and their prices and led
to 'just-in-time' store replenishment and the ability to carry tens of thousands of individual items.
Computer-operated depots and logistical systems integrated store replenishment with consumer
demand in a single electronic system.

Little has changed over the last few years. One of the few similarities with today is that Wal-
Mart was ranked the top retailer in the world then and it still holds that distinction. Other than Wal-
Mart’s dominance, there’s little about today’s environment that looks like the mid-1990s.

Saturated home markets, fierce competition and restrictive legislation have relentlessly
pushed major food retailers into the globalization mode. But, even before the global economic
slowdown that forced retailers into monitoring costs more effectively, technological advances
became a way of life in retail organizations. With all the emphasis on technology and cost-cutting, a
major thrust of retailers continues to be demand-based: finding new markets through globalization
efforts. Four years ago, more than half (53 per cent) of the top 200 retailers operated in only one
country. Today, only 44 per cent remain single-country merchants. This globalization trend can
only intensify in the years ahead. The benefits of increased sales and greater economies of scale are
too large to be ignored.

The global retail industry has traveled a long way from a small beginning to an industry
where the world wide retail sales alone is valued at $ 7 trillion. The top 200 retailers alone account
for 30% of worldwide demand. Retail sales being generally driven by people’s ability (disposable
income) and willingness (consumer confidence) to buy, compliments the fact that the money spent
on household consumption worldwide increased 68% between 1980 and 2003. The leader has in-
disputably been the USA where some two-thirds or $ 6.6 trillions out of the $ 10 trillions American
economy is consumer spending. About 40% of that ($ 3 trillions) is spending on discretionary
products and services. Retail turnover in the EU is approximately Euros 2000 billion and the sector
average growth looks to be following an upward pattern. The Asian economies (excluding Japan)
are expected to grow at 6% consistently till 2005-06. Positive forces at work in retail consumer
markets today include high rates of personal expenditures, low interest rates, low unemployment
and very low inflation. Negative factors that hold retail sales back involve weakening consumer
confidence.

The Spread of Organised Retailing in India


The turn of the twenty first century witnessed many changes in distribution channels in India.
Though convenience stores such as general merchants, grocers and mini self-service outlets will
continue to exist in our country, large cities will witness the growth in one-roof shopping malls of
different kinds. Already, large specialty stores such as Subhiksha, Food World, Shoppers’ Stop,
Naaz, Home Store, etc have set their firm foot in India. This resulted in expansion of two types of

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retail stores: one in the hyper malls and the other in large chain of The Sabka Bazar. Mega malls
such as Shoppers’ Stop and Forum have gained currency among upper middle class shoppers
seeking one-roof shopping combined with class and exclusivity, and discount stores such as Big
Bazaar are frequented by middle class families who seek one-roof shopping combined with value
for money. Shopper’s Stop is said to have plans for expansion which symbolizes more growth in
private labels. Interestingly, consumers will witness more and more of competition in retail stores
between national brands and the store’s brands. A case in example is the South Indian retail chain
Nilgiris that stocks dairy products under its own brand and under national brands such as Amul.
Food World has its own brand of jams selling over its counters side by side of Kissan and Sil. It is
easy to comprehend that when the retail store uses its own private label on an otherwise generic
product, it commits to the customers its guarantee for the quality of the store’s brand. Such quality
assurance will lead to greater trust among the store’s customers, resulting in greater store-loyalty.
This enables the store to charge a premium on an otherwise generic product, thus making private
labelling an attractive proposition to the large retailers. However, the current practice is in contrast
to this phenomenon, where mainly destination goods good are packed under retail labels, mostly at
cheaper prices than other retail outlets. If this becomes the trend, then retail labels can be expected
to offer value for money to customers mainly on price-plank and price-competition to national
brands. Price wars often breakout when most brand leaders in a particular category do not provide
private label products, and when competition comes mostly from smaller companies with lower cost
structures and overheads.If such be the case, then Indian companies of national brands will have a
lesson to learn from the disposition of the American consumer goods manufacturers, captured
comprehensively in the following statement: Private labels are anathema to many consumer goods
manufacturers. They are viewed as “category killers” – cheap, me-too products that suck all the
profits out of a market by making consumers more price-sensitive. And they are also a painfully
visible symbol of retailers’ growing control over the distribution chain. By diminishing the power of
traditional brands, private labels remove a key source of manufacturers’ influence over consumers,
and in turn, their leverage over merchants. They threaten to turn manufacturers into invisible
vendors who must contend themselves with supplying cut-rate commodities to all-powerful
retailers. A similar assessment of Indian manufacturers’ disposition towards store brands is not
readily available. However, the margins on retail brands are nearly two-and-half times higher than
on maufacturer brands. Though private labels in the retail sector of India account for less that 1% of
the overall sectoral sales, private labelling is a phenomenon that will grow in near future, owing to
the benefits it provides the stores. It is predicted by industry sources that retail sector will grow by
30% per year in a few years.

Background to Retail Brands


It is normally seen that marketing managers struggle between cost-saving standardization for a mass
market and high-cost customization for a specific niche in order to improve consumer-acceptance.
Given the technological developments in recent times, standardized products no more enjoy unique
selling propositions as imitations cannot be prevented from entry. Organizations continuously strive
to find a method of creating unique selling proposition (USP) to retain their existing customers and
acquire new customers. Such an outlook, in recent times, has called for a better understanding of
distribution channels in meeting specific customer-needs. The current thinking emphasizes mass
customization, a seeming synthesis of the two extremes of mass production and customisation. This
has been enabled by innovation in the area of distribution management that provides scope for
modification of production process to suit customers’ specific needs. This phenomenon is becoming

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increasingly relevant in the changing scenario of distribution, where the urban markets witness
frequent birth of private labels introduced by large retail stores, posing challenge to the brand-
strength of national players. Private label products encompass all merchandise sold under a
retailer’s brand. That brand be the retailer’s own name or a name created exclusively by that
retailer. In some cases, a retailer may belong to a wholesale group that owns the brands that are
available only to the members of the group (PLMA). A popular private label changes the status of
the retailer from a customer to a competitor for a national brand marketer.

Economics of Retail Brands


Retail brands are the only set of brands for which the store is entirely responsible. Thus, the store
has to bear all the costs (development, sourcing, marketing effort, time, risk and promotion) and it
reaps all the rewards of the brand’s success. It is intuitively evident that a store will enter into that
product category that has (a) high profit margin (b) low entry barrier to labelling and (c) low
switching cost to the consumers, which may be either monetary of affective. Commodities offer the
best scope to stores for private labelling since competition against the store label will be minimal
from the unorganised market. Further, commodities are products over which, through allocation of
shelf or floor space, retail control can be quickly established. This is because the suppliers of
commodities do not “purchase” shelf-space and therefore there will be little restriction or objection
to the store’s stacking and shelf-display of its own brands. These commodities are called
“Destination” categories, normally stacked at the far end of a store, inviting the consumers to take a
long walk through a maze of other products so that they may pick up some of them on the way. For
retail chains such as Food World, these categories represent high tactical usage to bring in more
customers and the price-related promotion of these categories falls under aggressive classification.
In the case of manufactured products being introduced under private labels, the characteristics that
enable retail brand introduction are: (a) inexpensive, easy, low risk purchase for customer (b) easy
to make from commodity ingredients (c) perishable, therefore local supplies are favoured (d)
category sales are growing fast, enabling the private brand’s garnering reasonably high volumes and
(e) low number of national players dominating the category so the retailer feels the need to reduce
dependency on them. However, Raju et al (1995) proposes, in a counterintuitive manner, to suggest
that retailer’s profits will increase more likely in product categories consisting of a large number of
national brands because the profitability of a store’s brand depends more on the directness of high
competition between the retail brand and the leading national brand, as against a high competition
among national brands which is detrimental to the retail brand. Though this aspect is not clearly
explained by the author, it seems to be his assumption that high competition among national brands
implies high brand loyalty among consumers for the national brands and therefore the affective
switching costs will be high. Also, where large number of national brands were available,
introduction of a retail brand increased the category profits, thus falsifying the much-held belief that
a crowded category has no place for retail brands. An aspect that is left wanting in their analysis is
the independence of competition among national brands and competition between retail brand and
national brand. Evidently, this poses four possibilities of one being low or high and the other being
low or high, as shown in the figure below . The figure has been constructed with the underlying
assumption that (a) it is technically feasible for the store to introduce its own brand (b) the
competitive scenario does not change the position from one quadrant to another and (c) the
switching costs for the consumers are not high, per sé .

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High III IV
Competition
Among
National Brands

Low I II

Low High

Competition between
Retail Brand & National Brands

 Quadrant I: Low-Low: This quadrant represents a situation in store where both types of
competition are low. A category that manifests low competition in both dimensions may be,
per sé, unattractive for private label. Such a phenomenon may be caused by (a) high degree
of commoditisation (b) low importance of the product category for the customers (c) high
input-output ratio in manufacturing. The retail store may never enter such a category with its
own label.

 Quadrant II: High-Low: This quadrant represents high competition between the store’s
brand and the major national brand and low competition among the national brands. This
occurs when the consumers’ affective attachment to national brands is high and achieving
brand loyalty is a short-term process. This implies that the retail brand is in direct
competition with the national brand and therefore the chances of consumers’ positioning it
along with the national brand are also high. The retail brand will not suffer from me-too
syndrome. The store can promote it extra vigorously and the brand is likely to be among the
top two brands in shelf-movement. The store is likely to witness a counter move by the
national brand through extra point of sales promotion. Thus, the total profit through the
product category will be high for the retail outlet. So, the store is better off launching its
brand.

 Quadrant III: Low-High: This quadrant represents high competition among national brands
but low competition between the store brand and national brands. This happens when the
national brands are highly advertised and the customers’ awareness of those brands is high,
both cognitive and affective, while facing the store brand on their visit to the store. Such a
situation is not favourable to the store brand since the switching costs for customers is high
and hence the store will find its brand positioned among fringe brands. Therefore, if the
store assesses its position in this quadrant, it is better off not launching its brand.

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 Quadrant IV: High-High: This quadrant depicts an all-out competition among the national
brands and if the store introduces its private label, it will come under direct fire as much as it
will be caught in the cross-fires of the national brands. Therefore, it is expected that a store
that views itself in this quadrant is better off not introducing its private label.

Essentially, a retail store introduces its own private label (a) to increase customer loyalty (b) to
improve their positioning and image (c) to improve margins in the category (d) to lower prices to
provide value for money to its customers and (e) to improve its bargaining power vis-à-vis national
brand manufacturers who use the store for distribution. The list should also include (f) to enable the
store to differentiate customers through price-quality association by premium pricing the store
brand.

By introducing a private label, the store creates a situation of conflict with the national brand;
this also makes the store’s position better on the bargaining table. Thus, it shifts the power in the
channel downstream. This may compel the national brand manufacturer to offer greater commission
or discount to promote his brand in the store. Another, but important benefit of introducing private
label for the retail store is the differentiation it provides to the store itself, and thus store loyalty.
Therefore, the benefits of a retail brand cannot be confined to merely the profits the category yields
but the additional footfalls it brings in. These economic benefits are not amenable to simple
numerical calculations. More importantly, such benefits cannot be confined to any specific period
and therefore calculation of economics of a private brand is more complex than what a static
economic analysis can do. In sum, the benefits to a retailer from the introduction of store brands are
(i) higher unit margin on national brands (ii) expansion of the category sales and (iii) higher
category margin from sales volume.

The Impact of Retail Brands on the Elements of Marketing Strategy


Now-a-days, marketing strategy is no more restricted to boardrooms and strategy tables. The real
battle is taken to the war-field - the retail space - where the thick of action is witnessed. Companies
no more compete solely with other companies for mind-space and shelf-space, but with their own
distribution partners. Distribution management is no more confined to managing distributors,
ensuring supplies to retailers and sporadic managing of product movement from retail shelves
through promotions. Thus, managing large retail chains and mega malls has become a reality, which
calls for different types of business-deals, calibre, aptitude and attitude among the boundary
personnel. Pricing strategy will not be simply based on competitors’ moves; it will consider how the
retail outlets act as well as will react to the company’s strategy. This may have a bearing on the
segment-targeting strategy of national brands, due to the competition arising out of retailers’ private
labels. Introduction of a private label reduces advertising space at the points of sales, as the retail
outlets prefer promoting their own brands instead of national brands. Alternatively, advertising
through points of sales may become more expensive, with the retail outlets charging premium on
shelf space and advertising space. These may cause a fundamental change in the approach of the
national brands in their overall strategy of segmentation, targeting and positioning. Companies may
revert to mass-media advertising by giving up the costlier point-of-sale advertising. In the following
paragraphs, the impact of private labels on the elements of marketing strategy is assessed.
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2(a) Product: Introduction of private labels at retail stores implies that the consumers have greater
options among products they buy. When the store competes vis-à-vis national brands on product
range, the short term inability of the national brands to respond to the challenge is a matter to be
contended with, since (i) a large enterprise requires longer time to respond with changes in
product-strategy and (ii) the minimum quantity of production that enables the national brands to
avail the economies of scale may not be available when it reacts to a single store. Alternatively,
if a chain store introduces a premium or economy brand in a category, then the national brand
gets the benefit of market testing from the experience of the retail brand and can thus decide
whether or not it, too, should enter that segment. Thus, retail brands offer an opportunity for
national brands to know about consumer-response to different variants of a product category.
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1(b) Price: In case the store competes with the national brand on price range, it can effectively do
so, by locally promoting the price-advantage to the price-sensitive consumers and by
highlighting the higher quality of the premium-range products to quality-conscious consumers
through its counter-salesmen. Under such conditions, the national brand has two options: (i) it
can fight the store brands on price or (ii) it may increase its prices and highlight its higher
quality through national campaigns. Fighting is an option the national brand can exercise when
the customers’ loyalty to the national brand is greater than the customers’ store-loyalty. The
decision to fight price-reduction in kind has both advantages and disadvantages. The advantage
is that the retail brand will find it difficult to gain acceptance among consumers, if an
established national brand is available at a similar price. The national brand may succeed in
nipping a budding retail brand. For a national brand, response to a reduction of price need not be
in kind. It can respond with special consumer-offer or discount which prevents long term
commitment as well as avoids reduction of price across all markets or stores. The response may
be confined only to the specific store. Further, price-reduction by the national brand can cause a
setback to it in the form of price-quality association. Therefore, the best response is to counter
the threat with promotional offers. One common tactic is to change customers’ choices and
limiting price reductions to areas where the national brand is vulnerable, thus localizing a price
war. However, fighting on price can cause vertical conflict in the distribution channel between
the company and the store, a proposition that is unhealthy to the national brand’s success in the
long run. In all, the best response to a store’s introduction of a low price brand is to resist the
temptation to respond with a similar move and focus on other aspects of marketing mix.

1(c) Place: Private labelling symbolizes the shift of intra-channel power downstream. As the
national brands condition the perceptions and preferences of consumers by the quality of their
brands and the content of their communication, retailers who own private labels are in a position
to dictate terms to their manufacturers about the standards to be adopted in quality and even in
production process. Dunne and Narasimhan (1999) provide the example of Coke and Pepsi in
Canada when they refused to supply private labels to grocers in Canada. The grocers located a
small company, Cott, who gained 20% market share in the process, bringing down the bigger
brands’ margins considerably. Where the specific quality of the product is not contractible by a
private label owner, the retailer may contract the method of production or insist on obtaining
certain certifications such as ISO. This may result in shift of certain investment costs upstream,
an eventuality that the manufacturers of national brands and private brands should be aware of.
In essence, the major impact of private labels may well be the increase in transaction costs for
the manufacturers. Every channel arrangement is characterized by a common goal on the one

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hand and a channel conflict on the other. The common goal is to achieve transfer of utility from
manufacturer to consumer whereas the conflict is about the sharing of costs and benefits of this
transfer. Private labelling heightens such conflicts by adding a dimension of contrary marketing
interests; that is, the national brand competes with the private label of the retail store for shelf
space and consumer-attention. Which way the needle will tilt in this power struggle will depend
on the relative degrees of brand loyalty and store loyalty. When the national brand enjoys
greater brand loyalty than store loyalty, the retailer is compelled to store the brand. Besides, the
national brand manufacturer may be in a position to penalize an opposing retailer by supplying
less quantity of such high-loyal brands or withdrawal of supplies altogether, an eventuality that
may affect the image of the retailer among the public. Manufacturers of near-monopoly brands
enjoy this position, vis-à-vis retailers. In a situation where the brand loyalty enjoyed by the
national brand is less than the store loyalty, the retailer is in a position to dictate terms about the
terms of supplies, delivery and payment in addition to further schemes and discounts.
Depending upon the quantum of business the retail stores provides to the manufacturer, the
manufacturer acquiesces or withdraws his dealings. Manufacturers of large national brands may
be tempted by the thought that private labels can be choked if the national companies refuse to
manufacture such brands. This thinking can be myopic and harm the national brands if the
stores are able to locate alternate sources of supply.

1(d) Promotion: As is evident from the previous paragraphs, private labels take the brand-battle to
the point of sales. The national brands compete with the private labels for store’s shelf-space
and consumers’ attention-space. With the store brands understandably getting the best shelf
space in terms of visibility at eye level, strategic points such as entry point and shelf display,
national brands need to compete for the same facilities at higher cost than earlier. Thus, private
labelling increases transaction costs for the national brands through higher promotion costs.
However, given an understanding that it may be difficult to beat the retail brand in its own store
through promotion, national brands may resort to increased mass media advertising to create
consumer pull. This will prove meaningful only if the national brand faces competition from
private labels all over the country. Though regional mass media advertising can be increased,
the cost may still prove to be super-optimal.

The Role of Private Labels in Building Retailer’s Brand Equity


Although researchers have discussed optimal private label introduction, quality, pricing, and
positioning strategies from the perspective of private label sales or category profit maximization,
there is little work, either normative or descriptive, that links these strategic decisions to building
the retailer’s brand equity. The following paragraphs discuss some issues that are particularly
important from the perspective of retail branding.

 Category determinants of private label success - What are the category and market factors
that determine how effective private labels will be in building the retail brand? Should
retailers in different formats emphasize private labels in different categories? Inman,
Shankar, and Ferraro (2004) show that consumers associate different product categories with
different retail formats. Bell, Ho, and Tang (1998) also argue that consumers build both
category-independent and category-specific store loyalty. Would it be more effective for
retailers to develop private labels in categories that consumers already associate them with
or in categories that are not traditionally associated with them?

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 Private label tiers and retailer brand positioning - There are at least four tiers of private
label products, ranging from low quality, no-name generics to cheap, medium quality own
labels to somewhat less expensive, comparable quality private labels, to premium quality,
high value added private labels that are not priced lower than national brands (Laaksonen
and Reynolds 1994).

However, more retailers are attempting to create a line of private labels that spans
these tiers. For instance, the supermarket retailer Kroger offers a line of three private labels
– the premium quality “Private Selection”, the Kroger Brand that is guaranteed to be better
than or equal to national brands, and the most economical FMV brand (For Maximum
Value). Clearly, this private label portfolio strategy allows the retailer to cover a range of
price-quality tiers but, how effective is it in building the retail brand? Is the retailer’s ability
to position his or her retail brand improved or restricted by the presence of a private label,
and the tier(s) in which the private label is positioned? What types of retailers are most
likely to benefit from private labels in terms of their retail brand equity?

 Private label branding strategy - Many retailers give their own name to their private label,
whereas others use different names for their private label products. For instance, CVS puts
the “CVS” name on all its private label products while Kmart does not. Aldi, a German hard
discounter who is becoming a major force in European retailing, also does not put its own
name on any of the products it sells even though only private labels are sold in its stores.

Little research has examined the effectiveness of retailer’s private label branding
strategy. The one exception we are aware of is Dhar and Hoch (1998) who included the
private label branding decision as one of the variables in their analysis of private label
market share and found that putting the retailer’s own name on the private label is positively
associated with private label share. What are the factors that determine whether one strategy
would be more or less effective than the other? On one hand, having the same name and
perhaps even the same package design for products in a wide array of categories across the
store, certainly strengthens awareness and recall of the retail brand, and may facilitate the
consumer’s decision making. On the other hand, will consumers find it credible that the
retailer can provide a good value, strong product in so many different product categories?
Would it be desirable for a retailer like Aldi to have its big box, discount image be
transferred to the products it sells?

Consumer perceptions of a private label product branded under the store name are
more likely to color their impressions of the store as whole – and vice versa – than if a
different name were used to brand the product. Yet, the different inherent qualities of a retail
store and its products suggest that the flow of meaning and equity may not always be strong.
In other words, consumers may be able to mentally compartmentalize product offerings as
distinct from retailing activities such that, even if they deemed a particular store brand
product as unacceptable, they may be less inclined to downgrade their evaluations of the
retailer as a whole. If the retailer chooses not to use the store name for private label
products, the feedback effects, both positive and negative, would presumably be less strong.

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 Extending private labels - One of the major benefits of brand equity is the option it provides
for extending the brand name to other market segments within the category or to other
product categories. Although some retailers with premium private labels sell those private
labels through other retail outlets (e.g., Starbucks), it is not yet a common phenomenon. In
terms of building brand equity, the key point of difference to consumers for private labels
has generally been "good value," a desirable and transferable association across many
product categories. As a result, private labels can be extremely "broad," and their name can
be applied across many different products. Research has shown that because of their
intangible nature, more abstract associations may be seen as more relevant across a wide set
of categories. But all brands have boundaries. If a retailer extends its private label
assortment too far beyond the categories that consumers associate with its channel type, will
the benefits be so small as to outweigh the costs of that assortment breadth? Or will such an
action be particularly effective in differentiating the retailer’s image from competitors in its
own channel? Is a strategy of multiple private label brand names more effective from the
point of view of extension than having a single private label under the store name?

 Manufacturer response - Manufacturers have responded to the rise of retail brands in a


number of different ways: decreasing costs, cutting prices, increasing R & D expenditures,
increasing promotions, introducing discount "fighter" brands, and supplying private label
makers. Hoch (1996) and Dunne and Narasimhan (1999) discuss how manufacturers should
think about private labels and what issues they should consider while supplying their
products to the retail brands. Ailawadi, Gedenk, and Neslin (2001) show that although there
is a segment of value conscious consumers who buy private labels and manufacturer brands
when the latter are promoted, there are also two separate and sizeable segments that buy one
but not the other. Offering deeper promotions to combat private labels may therefore not be
the ideal response for manufacturers. However, more empirical analysis is needed to
examine the effectiveness of different types of manufacturer response. Some manufacturers
have their own outlets (e.g., Niketown, Polo) which compete with their retailers. What are
the brand equity and consumer loyalty implications of manufacturer-controlled stores?

Future Research Prospects


Based on the foregoing analysis, the following aspects can be researched taking the retail sector in
India separately:
 Currently, private labelling is a legacy in clothing (West Side) and in FMCG (Nilgiris, Food
World, Naaz). Products that require high level of consumer confidence – such as baby food
and health products – still do not the enter the private label bandwagon. What are the
endogenous and environmental factors that facilitate private labelling? How do different
product categories fare in such an analysis?
 What are the different strategies adopted by retail stores to promote their private brands?
What explains the commonalities and what explains the variations?
 How are the national (or even regional) brands disposed toward the phenomenon of private
labelling? Is there a difference in the promotional practices of the national brands between
the private labelled stores and others?

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 Current literature, mainly based on the Western nations’ experiences, deal with national
brand versus retail brand as one-on-one issue. However, in reality, a national brand
manufacturers / marketers sell many product categories through retail stores. In the context
of multiple brand sales by a national brand manufacturer, what is the effect of the product-
range sales on the power position in the channel? This aspect can be effectively studied
through case study research method.
 Does private label result in better store loyalty? Or, does perceived store loyalty cause
retailers to introduce store brands? Alternatively, what is the cause-effect direction between
store-loyalty and private labelling?
 Are there differences in the way in which channel conflict due to retail brands is perceived
by the stores and the national brand manufacturers? Intuitively, it ought to be so. Is there
significant difference? Why?
 Has there been an impact on the prices of national brands sold in the specific store after the
store has launched its own brands in a specific category?
 In what categories, retail brands are imitations of national brands? How are they positioned
against the original? (Premium, economy or fringe)
 How are retail brands positioned in consumers’ perceptual space vis-à-vis national brands?
 What research methods stores that own private brands use to collect consumers’ perception
about their brands? Is systematic research pursued? This can be studied through case method
research.

Conclusion
It is commonly said that branding and brand management principles can and should be applied to
retail brands. Even though there has not been much academic research on retail branding per se, a
lot of work has been done on retailer actions and consumer perceptions of retailer image that has
direct relevance to branding.

Consumer perceptions of various dimensions of retailer image - access, in-store atmosphere,


price and promotion, cross-category assortment, and within-category assortment - can help develop
strong and unique retail brand associations in the minds of consumers. They also influence the
utilitarian and hedonic benefits that consumers feel they gain from retailer patronage and ultimately
the price premium consumers will pay, the extra effort they will be willing to expend in order to
shop the retailer, and the share of trips, share of requirement, and loyalty that the retailer enjoys. By
influencing consumer preferences and shopping behavior in these ways, retailers’ image becomes
an important base for their retail brand equity. The relative importance of different image
dimensions and of utilitarian versus hedonic utility vary for different retail formats, different
consumer segments, and even for different purchase occasions for the same consumer, thus
providing ample opportunity for retail brands to differentiate themselves from one another.
However, due to lack of explicit focus, a number of important retail branding questions and issues
are yet to be resolved.

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References

 Ailawadi, Kusum L., Norm Borin, and Paul Farris (1995), “Market Power and Performance:
A Cross-Industry Analysis of Manufacturers and Retailers", Journal of Retailing, Vol. 71
(3), 211-248.
 Akhter, Humayun, Richard Reardon, and Craig Andrews (1987), “Influence of Brand
Evaluation: Consumers’ Behavior and Marketing Strategies,” The Journal of
ConsumerMarketing, Vol. 4, No. 3 (Summer), 67-76.
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