Private Label – a phenomenon that benefit everyone involved – and the manufacturers and retail outlets. Howard Schultz is often quoted as being for or against this. Moreover, under certain conditions, participate in this project may be interested in producers of food ingredients, the only customers which is still the only industrial enterprise. FMCG manufacturers benefit from participation in the private label projects, primarily in a stable capacity utilization, and the second – to press its competitors on the shelf, since the goods under own brand name are given priority in the computation. And of course, a provider of private label shall be exempt from additional fees and discounts, which are unavoidable in the standard co-operation with the network. What is retail Private Label? There are both commercial and qualitative benefits.
First of all, the presence of private label brands in the portfolio increases the income category. This is a very hot topic in light of the severity of price competition between retailers. In terms of qualitative benefits, Private Label can reduce the dependence on key producers, with whom relations are seen to manage the categories underdeveloped in terms of partnership. This is a unique instrument of pressure on leader category. It can be used, you can not, but this tool is. The third goal – positioning.
Private Label allows the retailer to have a "good first-price" in the category and thus achieve the necessary form required image of the network to the buyer. Exaggeration, it is enough to have a range of pasta under the brand network and 9.90 in the minds of (some of) buyers in the network can make the best possible purchase. The fourth goal – loyalty. Private Label – this is surefire way to increase the loyalty of buyers to the brand network. Example: Sales of instant coffee under private label OKEY hypermarket chain is several times greater than sales of coffee, "Nescafe." Except in the coffee OKEY hypermarket You can not buy anywhere else. Does it increase customer loyalty to the brand "okay"? Sure, yes, and this clearly demonstrates the reduced statistics. Should this product contain at the network name? Not required. And fifth, the cumulative effect – the growth of brand value retailer. If the share of private label is 10% of turnover, the share of income in the network will be at least 20%. We can say that 20% of their income due to the retailer receives the most itself. This certificate is a great financial stability. What decisions should be taken to benefit from the project Private Label? 1. Identify the purpose of the Cup: Maximizing returns or price leadership, or both simultaneously to determine the criteria of profitability for the private label 2. Adopt a strategy of naming: use the brand the network or not, and if so, how and in what cases 3. Accept the concept of design: use of common elements and, if so, which, or to create a unique design for each item 4. Develop the concept of merchandising for private label 5. Prescribe procedures and regulations create a private label goods.