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Private labels

Marketing management

Martins Lustiks

on 25 February 2013

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Transcript of Private labels

Why private labels? Summary According to businessdictionray.com “Brand owned not by a manufacturer or producer but by a retailer or supplier who gets its goods made by a contract manufacturer under its own label. Also called private brand.”

In other words – store brands. What is a Private Label? Food
Contract manufacturing Private Label Product Types. Large manufacturers – use expertise and capacity
Small, quality manufacturers who specialize in particular product line
Retailers and wholesalers that own their manufacturing
Regional brand manufacturers that
produce private labels for
specific markets Manufacturers of private labels Utilize excess plant capacity
Offer good growth potential
International markets
Lower R&D and marketing costs
Better shelf space for brand product Private label manufacturing opportunities Less visibility
Less control of planing
Artificial spikes of demand
Business volatility
Lower profit
Cannibalization of national brand Control over:

Personalized image:
Customer loyalty
Differentiation from competitors
A unique product Advantages for retailers Products:
Perception improvements
Higher margins
Time & money saved Advantages for retailers Examples of private labels Small choice
Can not see manufacturer, only country of origin
Mostly promoted private brands Disadvantages for consumers Main benefits for customers LV Canada USA Sales:
Independent Lower price Quality Recognizable, strong brand Wider product range - Price and quality combination that did not previously exist - Innovative ways to attract customers Benefits of competition
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