private label strategies and responses
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Private Label Strategiesand Responses
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PRESENTED BY:
Mudassar Mahmood Khan; ID No: 41018003
Muhammad Golam Kibria; ID No: 41018060
Md. Wahid Ebnay Nazrul; ID No: 41120021
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PRIVATE LABELS:
Private label products or services are typically
those manufactured or provided by one company
for offer under another company's brand. Private
label goods and services are available in a wide
range of industries from food to cosmetics to webhosting. They are often positioned as lower cost
alternatives to regional, national or international
brands, although recently some private label brands
have been positioned as "premium" brands tocompete with existing "name" brands.
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ADVANTAGESOFPRIVATE LABELS:
Control over pricing of the product/service,
Put forth own ideas on marketing plans,
Create personalized image which in turn leads to
higher customer loyalty, Higher control on production, marketing, distribution
and profits,
Give their own inputs, additional materials, logos,
tag lines, etc. Customer's changing preference - drive towards
private label products.
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WHY PRIVATE LABELS:
Branding isnt everything; its the only thing.
The decision to brand or not to brand drives the
question, What business are you in?
The decision to pursue a private label strategy
places a company in a production driven mode.
Both branded and private label strategies have
risks and rewards.
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WHY PRIVATE LABELS: (CONTD.)
The Private Label Marketing Association says that
one in five items sold in supermarkets is private
label.
Further, 75 percent of consumers think store brands
are real brands and 83 percent have purchased
store brands.
If retailers can be successful marketers of brands,
surely producers can be.
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PRIVATE LABEL STRATEGIES:
Strategy is everything.
Positioning and planning are the two overarching
principles to marketing success.
Positioning statements define a brand and the
company.
Positioning happens with or without a companys
efforts.
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PRIVATE LABEL STRATEGIES: (CONTD.)
In these tough times, consumers are demanding
greater valuewhich often translates into lower
retail margins or loss of sales.
Private label is not for everyone.
Retailers are attempting to take matters into their
own hands, continuing to build private labels thatcompete with well-known brands.
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PRIVATE LABEL STRATEGIES: (CONTD.)
Leverage customer insight to drive innovation and
differentiation.
Conduct sourcing to boost innovation and grossmargins.
Structure a development process that is fast and
that meets ever-changing consumer needs.
Using Customer Insights to drive more profitable
Private Label development.
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PRIVATE LABEL STRATEGIES: (CONTD.)
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RESPONSESBYMAJORBRANDSTOPRIVATE
LABELSTRATEGIES:
Strategies taken by major brands:
Attempt to decrease cost and reduce price.
Competitive advantages over private labels because of
other favorable brand perceptions.
Cutting prices on older brands to make them moreappealing.
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RESPONSEFROM PROCTER &
GAMBLE(P&G):
Value pricing program to combat competitive inroads
from private labels and other brands.
Cut prices on a number of old standbys (e.g. Joy
dishwashing detergent, Era laundry detergent, Luvs
disposable diapers and Camay beauty soap) by 12 to 33
percent.
P & G eliminated jumbo packs, streamlined package
designs, simplified printings, and trimmed promotions,
increasing retail margins from 3.3 percent to 8.6 percent
as a result.
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RESPONSEBY HEINZE:
Emphasizing both innovations and relevance throughout
their marketing program.
Use of Hipper advertising to announce the innovations.
Keeping the price gap with private labels at under 20
percent.
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OTHERTACTICSADOPTEDBYMAJORBRANDS:
Increase R&D expenditures to improve products and
identify new product innovations.
Increase advertising and promotion budgets.
Eliminate stagnant brands and extensions and
concentrate efforts on smaller number of brands.
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OTHER TACTICSADOPTEDBYMAJORBRANDS:
(CONTD.)
Introduce discount fighter brands.
Supply private label makers.
Track store brands growth and compete market-by-
market.
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