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“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”
RETAILING : PRIVATE LABELS & THE NEW RETAIL ENVIRONMENT
PRESENTED BY:
Nishant Agarwal (2013174)Nishant Renjith (2013175)Nishidh Lad (2013176)Nitesh Beriwal (2013177)Nitesh Singh Patel (2013178)SECTION-D
What is Retailing?
Sales of goods and services to the ultimate consumer for the personal, family or household use.
Any organization selling to final consumers- whether it is manufacturer, wholesaler or retailer.
In the channel of distribution, retailing is where customer meets the product.
Exchange
Types of Retailers
1. Store Retailers
2. Non store Retailers
3. Corporate retail organization
Store Retailers
1. Speciality Store : Narrow Product line.
Store Retailers
2. Department Stores: Several product lines
Store Retailers
3. Supermarkets:
Large
Low cost,
Low margin,
High Volume,
Self Service store,
Meets all household and food products
Store Retailers
4. Convenience store/ Drug stores: Small store in the residential area open 24/7
Store Retailers
5. Discount store:
Low price
Low margin
High volume store
Standard
Specialized Merchandize
E.g. Walmart
Store Retailers
6. Extreme value or hard discount store:
Store Retailers
7. Off Price Retailers : Leftover goods, overruns, irregular merchandise sold at less than retail.
Store Retailers
8.Superstore: Huge selling space, routinely purchased food and household items, plus services
Consumer Preference
1. Self service
2. Self selection
3. Limited service
4. Full service
NONSTORE RETAILING
1. Direct Selling:
Multilevel selling
Network selling
NONSTORE RETAILING
2. Direct Marketing:
Telemarketing
Television direct response marketing
Electronic shopping
NONSTORE RETAILING
3. Automatic Vending:
CORPORATE RETAILING AND FRANCHISING
1. Consumer Cooperative:
Owned by customers
Members contribute money to open their own store
Vote on its policies
Elect a group
Manage it
Receive dividends
CORPORATE RETAILING AND FRANCHISING
2. Franchise Organization :
NEW RETAIL ENVIRONMENT
What Has Triggered the CHANGE….
•Fast changing Macro and Micro Environment
•Growing consumer expectations.
•Exhaustive Competitive pressure.
•Growth of Urbanization.
•High disposable income.
NEW RETAIL FORMS & COMBINATIONS
•Bookstores featuring Coffee Shops.
•Gas stations including food stores.
•Shopping malls and stations having peddlers’ carts in their aisles.
Store Based & Non Store Based Retailing.•Increased offerings through mails, cell phones and internet.
•Non store based retailers enjoy convenience leverage.
•Store based retailers coming online to compete.
•More and more experiential touch being given to the physical stores.
GROWTH OF GIANT RETAILERS..
•Inherit superior information systems, logistical systems and buying power.
•Crowding out small manufacturers.
•Suggest even companies for improvement and innovations.
•Includes huge market share.
Growing Investment In Technology..
•Improved ways of forecasting, inventory control and order processing.
•In store programming on LED’s, electronic shelf labeling and smart shopping carts getting common.
•Digital advertising and different payment methods creating further space.
•Global Retailers snatching grounds.
•Growth of Shopper Marketing.Influencing customers at the point of purchase.
Marketing Decisions
Target Market ChannelsProduct AssortmentPricesServicesStore AtmosphereStore Activities and ExperiencesCommunicationsLocation
Target Market
Channels
The collection of goods or services that a business provides to consumers. The main characteristics of a company's product assortment are:
(1) its length or number of products,
(2) its breadth or number of product lines,
(3) its depth or number of product varieties
within a product line and
(4) how products relate to each other in a
retail environment.
Product Assortment
Price
Fine Specialty Stores: High-Markup, Lower-volume group
Mass Merchandisers and Discount Stores: Low-markup, Higher-volume group
ServicesPrepurchase
Services• Advertising• Fitting rooms• Fashion shows
Postpurchase Services
• Shipping & Delivery
• Alterations• InstallationsAncillary
Services
• Parking• Repairs• Rest rooms
Store Atmosphere
Store Activities &Experience
Communication
Location Central Business Districts
Regional Shopping Centers
Community Shopping centers
Shopping strips
A Location with a larger Store
Stand-alone stores
PRIVATE LABELS
I DON’T WANT TO TALK IN TERMS OF MARKET SHARE.
I DON’T WANT TO SHARE MY MARKET WITH ANYONE.
-LARRY LIGHT, CEO
WAL-MART
Definition Private labels are retailer brands.
Brands owned & sold by retailer & distributed by retailer.
The Beginning
A&P’s 8 O'clock Coffee in 1900s
Background of PLB Earlier referred as Cheaper & Low quality alternatives for national
brands.
Just a profit making concept which needed no marketing effort
Tescos Value Range in 1995 was the first value pay brand
Other retailers like Sainsbury etc. quickly followed the suit
In India in 2000s this concept came up & Future Brand came up with “SACH” toothbrush & toothpaste range.
Why Did It All Begin?
Shift of power from National brand marketers
to National Retailers
High Quality & Low Price
Historical perspective of key retailers of a
strong house brand.
How does PLB work?
Winning strategy for improving store image and profitability.
Offers value for money
Increases the price competitiveness
16-23% less price for the consumers as compared to national brands
Differentiating factor as exclusively available at the particular store only
Consumers get an assurance that they can directly interact with the owner of the brand
Would You Prefer A PLB Over A National Brand?
Yes44%
May Be44%
No13%
Yes May Be No
If Yes, Then Why?
Quality42%
Trust on that retail store24%
Cheaper Price25%
No, I wouldn't prefer9%
Quality Trust on that retail store Cheaper Price No, I wouldn't prefer
If No, Then Why?
Don’t want to change brand preference
30%
No trust on quality18%
I can give it a try52%
Don’t want to change brand preference No trust on qualityI can give it a try
How Was Your PLB Buying Experience?
Average22%
Awesome6%
Good63%
Not Tried9%
Average Awesome Good Not Tried
Would You Like To Repeat Your PLB Experience
Yes89%
No11%
Yes No
Food Dominates India’s Private Label Market
According to Nielsen’s Survey “Food” captures 76% of the India’s Private label Market
PRIVATE LABEL GROWTH vs
MODERN TREND GROWTH
ADVANTAGES
1. DIFFERENTIATION
HIGHER MARGINS
FREEDOM TO CREATE OWN MARKETING PLAN
Independence to retailer to use its own innovative marketing strategies
For National Brands, Poor marketing strategy by the manufacturer not only results in the failure of the product, but also erodes the profit margin of the retailer
FREEDOM WITH PRICING STRATEGY
Similar to the Marketing Strategy, Private Labels also give the retailers to a chance to adopt their own pricing strategy
Shields retailers from the losses due to longer shelf life of poorly priced products
Retailers can directly pass on the price benefits to the customer
Strong Customer Positioning
Develops Customer Loyalty
Uniqueness of Private Labels, helps to build brand loyalty
Customer Loyalty has significant advantage over its competitors
Private Labels (Examples)
JOHN MILLER – AN ILLUSTRATION OF SUCCESS
Facts about John Miller
Came into existence in 1995 as an extension of Pantaloons
Ranges between Rs. 800-1500
Targeted at Premium segment customer
Over the years it has grown from a private label to a private brand.
KEY TO SUCCESS OF JOHN MILLER
One of the very first private labels in the apparel industry in India
High quality at low price
Reasonable Price Range
Attractive option for value buyers
Contd.
DISADVANTAGES
Highly Competitive Market
High risk with reputation of the brand.
Risk of getting into a price war
Dependent on the supplier
Excess focus on private labels inside the stores
CONCLUSION
Win – Win situation for both, customer and retailer
Lower prices and Higher margins
Quality is comparable to that of National Brands
Value for money products
Extra care and detail
Contd.
Huge growth potential
Deeper Market penetration required
Innovative Marketing and promotions are the need of the hour