Text of Analysis brands versus private labels- fighting to win
1. Threat of private labels to national brands
2. vsVS What are private labels?
3. Why do retailers prefer private-labels?
4. 1. Higher profit margin Reduce costs of delivery Eliminates the middle man Increases supply chain efciencies
5. 2. Makes the retailer different
6. 3. Set your own pricing
7. 4. Saveguard against economic downturns
8. Trent Reliance Retail Pantaloons Nilgiris Piramyd Food world % of Private Label sales 0 22.5 45 67.5 90 Major private label retailers in India
9. The growing threat? The reasons.
10. 1. Improved product quality in private labels
11. 2. Development of premium private labels
12. 3. The European success
13. 4. Entry in newer categories
14. Then,is this the end of national brands?
15. People love brands!
16. Brands have a head start!
17. Stronger economy=Stronger brand!
18. Brands are crowd pullers for retailers!
19. Should brands then manufacture for private- labels?
20. The pros Use that excess manufacturing capacity!
21. The pros Better market control
22. The pros Competitive advantage!
23. The cons Strained manufacturer-retailer relations
24. The cons Increased manufacturing and distribution complexities
25. The cons Can hurt your own brand!
26. The best advice? If you dont, dont start!
27. If you already do,well.
28. Evaluate private-label business: Do a private-label audit Evaluate business on full costs rather than incremental costs Examine the effect on your brand Close that excess capacity
29. How to defend against private-labels?
30. Make your brand strong: Invest in brand equity!
31. Innovate: With caution
32. Using ghting brands
33. Build relationships Know your customer Teach your retailer
34. Manage each category: Know your product
35. Exploit sales-promotion tactic: Capture that retail space!
36. Lastly.. Do not underestimate the private-label threat!
37. Reference HBR:Brands Versus Private Labels: Fighting to Win Version inJan-Feb 1996 Marketing Management: A South Asian Perspective; Philip Kotler,Kevin Keller,Abraham Koshy, Mithileshwar Jha Under the guidance of : Prof Sameer Mathur,IIM Lucknow