Future of private label brands
-
Upload
sameer-mathur -
Category
Documents
-
view
36 -
download
5
Transcript of Future of private label brands
FUTURE OF PRIVATE LABEL BRANDS
Private label brands are produced by one company for offer under another company’s
brand
Brands vs Private labels
Brands High Innovation rate
High product differentiation
Longer purchase cycle
Heavy promotional activity
Private labels Low innovation rate
Minimal product differentiation
High price sensitivity
High purchase frequency
India is one of the most successful private-label markets in the south-east Asian region.
Private label grew 27% between2012 and September 2014.
DRIVERS FOR PRIVATE LABEL BRANDS GROWTH
• New generation of shoppers is less brand-loyal and more open to trying new products.
• Higher margins, cheaper price and better bargaining power for the retailers.
• “Cash-strapped consumers' perception of the products as a 'cheaper option' changes,"
• Diverse spread of spending power and generic competition at the lower end of themarket.
Goods like fruits, vegetables can draw premium price from consumers at top of pyramid – Thus a option of private
branding
At bottom of pyramid, consumer would be willing to accept the low cost product at minimal quality – Potential of developing private label suited to this segment
Degree of Private label pene-tration in major Indian players
Trent Reliance retail Pantaloon NilgirisPiramid Food World
PRIVATE LABEL GROWTH DRIVERS IN DEVELOPED MARKETS
• CONSOLIDATION
• EXPANSION OF THE “HARD DISCOUNT” FORMAT
• CONTINUED ECONOMIC SOFTNESS
• INNOVATION
• NEW CHANNELS
WINNING STRATEGIES FOR PRIVATEL LABEL PLAYERS IN INDIA
• USE PRIVATE LABEL AS A POINT OF DIFFERENTIATION.
• INCREASE IN - STORE VISIBILITY OF PRIVATELABEL PRODUCTS.
• HIGHLIGHT THE VALUE FOR-MONEY PROVIDED
• UNDERSTAND LOCAL NEEDS AND PREFERENCES.
• INVEST THE TIME AND RESOURCES TO EDUCATE CONSUMERS AND BUILD TRUST IN PRIVATE LABEL
Conclusion
• Private retailers will occupy 50 per cent of the market the world over. At 50 per cent, they begin to saturate.
• If they try to occupy more than this, then consumers feel that there aren‘t enough choices.
• In countries such as Switzerland and the UK, private labels have reached this limit and these markets have saturated.
References
• T.Subha, R. Kirthika, P. S. Narayanasamy. Private Label Brands in Indian Retail Industry
• Nielsen, The State of Private Label around the world
Created by:Mohd Wasil
IIT Delhi
During Internship bySameer Mathur, IIM Lucknow