Impact Of Private Label

Gone are those days when a product got sold just because it carried a brand tag on it

. But with the retailers coming up with the idea of private label in the

market, the dependence of consumers on the branded products has decreased. Stepping into a private store was once considered as a degraded act but with the changing times the thinking of the consumers has changed exceptionally.

Once looked upon as the low cost imitation of the branded products are now seen as the cheaper alternative by the consumers. Maybe the private stores got the deserved admiration after a long time of their advent, but these stores have left such an impact in the market that is worth appreciation.

Proliferation of Private label traders

Products and services offered by the private label traders are of higher quality.

Even though the quality of the products is higher, the prices are comparatively much lower and genuine. But, if we look at the branded products that are high on quality but demand a much higher price, obviously a consumer would go for the products that offer high quality on lower price.

There is a scope for bargaining with the private label traders.

The popularity of the private store brands has towered to such an extent that manufacturer of branded products have to compete against their own customers for market share.

Impact of private label

Brand image

As the market for private label traders has expanded, the dependability of consumers on the private label goods has expanded as well. The products offered by the retailers are of higher quality and this generates a sense of loyalty among the consumers towards a particular private store.

Profit generation with customers satisfaction

The goods offered by these private label traders are much cheaper than the branded goods due to in-effective advertising and marketing. Even if the consumers bargaining, the retailers can easily make a profit of 10% on sale of the goods. So with generation of profits, these retailers can satisfy their customers and develop loyal customers.

Retailers as vigorous marketers

There has been a considerable shift in the distribution of power between the retailers and manufacturers. Now the retailers dont have to depend upon the manufacturers for product offerings, but the manufacturers have to depend upon the retailers for increasing their sales volume.

If the private label trade augments, private trade companies like Wal-Mart, Kroger, Cott Corporation, Target and Costco would be extremely benefited.

And if there is a decrease in the private label trade, companies like Coco Cola, PepsiCo, Procter and gamble along with the other manufacturer of branded products would be majorly benefited.

by: Maurice Van Vliet

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