Retail Management

Ameya Bhandarkar 17-M-407

Vaibhav Dhamanskar 17-M-419

Shivram Loke 17-M-437

Rishika Nagar 17-M-442

Bhumil Parikh 17-M-446

Khushboo Patil 17-M-448

Leon Rebello 17-M-456

● Private Labels are Retailers own, control, and exclusively sell store
brands

● Private Label are a ‘Good Alternative’ to Other Brands, Offering the

Same Quality & Value

● Private labels are regarded as good Value for Money, and Quality on
Par with the Big Brands.
Origin of Private labels
● The origin of private label can be traced back to the ‘60s and ‘70s where the
offering was cheaper, generic products

● In 1970’s they were in the form of black and white labelled products

● The major improvement in packaging was the first step in the success of
private label

● Traditionally, private label products have focused on the low- end price point.
Now, some retailers will offer private label products across multiple price
points including a premium line

● The popularity of private label is creating an additional challenge to name

brand producers who need to recover expensive advertising and marketing
WHY DO PRIVATE LABELS
EXIST?

• Unsatisfied needs of consumers

• Need of cheaper and special
products in the market
• Financial crisis and lower
standard of living
• Higher profit margins
NATIONAL
BRAND –
● À product designed, produced,
marketed by a vendor and sold by
many retailers
National Brand Vs. Private
Brand
● Manufacturer (National) Brands -Designed, produced, and marketed by a
vendor and sold by many retailers

● Private-Label (Store) Brands - Developed by retailer and only sold in

retailer’s outlets

● NATIONAL BRANDS–everywhere!
● PRIVATE LABELS – only in retailer outlets!
Indian Scenario
● Retailers are closely connected to consumers and understand their
psychology

● Higher penetration of supermarkets/hypermarkets in urban areas has

resulted in growth in private labels

● Shoppers of private label apparels proudly consider themselves as

smart shoppers

● Growth of private labels is directly linked to the growth of modern

retail channels

●Indian retailers have a strong competitive leverage to create products

Global statistics on private labels
Few companies that have used Private-label
Production Effectively…

It succeeded in capturing private-label businesses from its

key competitor, forcing it to close plants and weakening its
national brand

It first captured private-label trade contracts from

competitors and then proved that trade accounts could
make more money just stocking GE light bulbs than by
stocking them with private-label bulbs.
 What drives Private lables???
• The product is an inexpensive, easy, low risk
purchase for the consumer
• It is perishable, thereby favoring local
suppliers
• National brand new product introductions are
frequent or easy to copy
• Consumers can easily make side-by side
comparison of national brands and private
labels
• Private label goods have been available to
consumers fo r many years
• Variability in quality is low
Private labels constitute around 10-12% (Rs 13
billion)of the organized retail product market in
India and their share is likely to grow even in the
currenteconomic environment, says a report
by global consultancy firm KPMG.
Their penetration is on the rise especially in the
apparel, consumer durables, home care and
FMCG segments.

In India, Shoppers Stop and Kishore Biyani’s

Future Group have pioneered the launch of
private labels. Shoppers Stop launched its first
private label ‘STOP’ in 1994 and has since then
has added around 10 exclusive brands. It forms
about 17 per cent of Shoppers Stop’s total
range.
 Classifications
Individual/Quasi Brands

invented controlled labels

with no store association,
work most successfully in
a limited assortment
03
environment to create the
Umbrella Brands illusion of selection

Group brands, where all

private labels carry a Store Brands
common non-store name, Where all private labels
are most commonly used carry the name of the store,
by retailers with more 01 02 have been very successful at
than one store fascia. driving high levels of private
label penetration in
supermarkets. Store brands
offer a choice to the end
consumer, for the retailer,
they are tool for increasing
business and winning
customer loyalty
 ● Unique Merchandise
● loyal customers
● Increased Margins
Significance ● Changing Consumer
habits
of ● Identification of Need
Gap
● Difficult for customers
to compare price with
competitors
The Evolution of Own
Brands (Private Labels)
Type & Strategy
 OBJECTIVES  Increase margins
GENERIC  Provide Choice in pricings

BRAND PRODUCT • Basic and Functional Products

TECHNOLOGY • Simple Production process

and basic technology lagging
behind market leader

QUALITY/IMAGE • Lower and inferior image

APPROXIMATE PRICING • 20% or more below the brand

leader

CONSUMERS MOTIVATION TO • Price

BUY

SUPPLIERS • National , not specialized

 OBJECTIVES • Increase Margins

QUASI •
•
Provide better value product
Reduce manufacturer’s power by
setting entry price

Brand PRODUCT • One-off staple lines with a large

volume

TECHNOLOGY • Technology still lagging behind

market leaders

QUALITY/IMAGE • Medium quality but still perceived

as lower than leading
manufacturer’s brands
• Secondary brand

APPROXIMATE PRICING • 10 – 20 % below

CONSUMERS MOTIVATION TO BUY • Price

SUPPLIERS • National, partly specializing for own

label manufacturing
 OBJECTIVES • Enhance Category margins

OWN •
•
Expand product assortment
Build retailer’s image among
customers

BRAND PRODUCT • Big category products

TECHNOLOGY • Close to the brand leader

QUALITY/IMAGE • Comparable to market leaders

APPROXIMATE PRICING • 5 – 10 % below

CONSUMERS MOTIVATION TO BUY • Both quality and price, i.e. value for
money

SUPPLIERS • National, Mostly specializing for

own label manufacturing
 OBJECTIVES • Increase and retain the client base
• Enhance category margins
EXTENDE •
•
Improve image further
Differentiation

D BRAND PRODUCT • Image forming product groups

• Large number of products with
small volume (niche)

TECHNOLOGY • Innovative technology

QUALITY/IMAGE • Same of better than brand leader

• Innovative and different products
from brand leaders

APPROXIMATE PRICING • Equal or higher than known brand

CONSUMERS MOTIVATION TO BUY • Better and unique products

SUPPLIERS • International, Manufacturing

mostly own brands
Factors in Successful
Private Label
Manufacturing

● The Right Product

● A Competitive Price
● A Strong Marketing
Programme
 Offer Price PLB at GOOD
PRICE

Vicious Cycle
of PLB
Price Maker New
Customers &
Retailers

More PLB
PRIVATE
LABELS & E-
COMMERCE
● Flipkart & WS Retail
● Myntra & Private labels
● Amazon Basics & Cloud Tail
● Tata Cliq
Benefits to Consumers
● Good Alternative to name brands

● Quality as good as name brands

● Good value for money

● Good for people on tight budgets who can’t afford the best

● The cost savings for the typical consumer is large

Benefits to Retailers
● Significantly bigger margin on those sales

● Significant source of additional profitability

● Gives the retailer the flexibility to more easily align a specific customer need
with a specific product.

● The packaging and labels can be custom tailored to meet customer needs •
Allows more control over pricing strategies.

● Gives freedom for retailers to create their own marketing plans and to control
their own inventory in stock.

● Promote stronger customer loyalty toward retailer store.

 DISADVANTAGES
 Manufacturer dependency

 Difficulty building loyalty

 Individuality of Private Labels

 Changing Consumer Behaviour

 Price and Quality Conscious Indian Consumer

Thank You