Private Label Products: Trend For top level?

Lately, private label products have made a tremendous impact on the U.S. market, affecting everyone, from producers to retailers to consumers. Private label goods are products whose name or brand solely belongs to a specific retailer (e.g. Wal-Mart and Marks & Spencer). Let’s claim that you’re in a grocery store. In the beginning you see all those gourmet sandwiches with brands that have been familiar to you. You then visit Marks & Spencer and lo and behold, now they’re selling exactly the same kind of sandwiches too!

Private label products have cultivated significantly in Europe, especially in the Western half, and now it’s making its mark in the United States. Private labels can be split into sub groups:¬†private label skin care¬†store brands are products where in actuality the retailer’s name is a strong factor in its packaging and marketing aspects; store sub-brands are products whose link with the retailer is minimal; umbrella branding is a technique in which a retailer uses just one private label for different product categories and finally you will find individual brands in which private label is accorded to at least one product type.

The advantages are of course numerous, to all key persons involved. For the retailer, one of the most obvious pros will be the escalation in sales. And since it’s their very own private label, the retailer then has got the freedom to create a unique marketing strategy, have significantly more control over its stock inventory and possibly use it also to get an even more positive image to the public. And with a confident image, this will of course lead to stronger customer loyalty. Naturally, having a private label for one’s products will mean investing a bundle therefore the retailer must be sure that it has got the capital necessary for this type of venture. Secondly, many people still view private label products as something synonymous to lessen quality products so this really is another issue that the retailer must try to combat while they launch their new line.

For producers and suppliers, the features of producing private label products for a retail company is less visible but nevertheless present, nonetheless. For starters, they get rid of all the entry barriers a manufacturer usually faces as they fight entering a market because they’re supplying directly to the retailer itself. Secondly, for cash-strapped suppliers, manufacturing private label products will let them enter the bigger and higher end markets. The downside of these of course is when the product does not perform as expected. Low profit could then affect the connection between the supplier and retailer.

For the customer, the advantages and disadvantages are almost equal. Most private label goods are cheaper than branded products. This might, of course, translate to lessen expenses for consumers, something which everyone would undoubtedly welcome. But if the quality of the product is sub-standard, as some private label goods are, maybe you’re not getting the best of the deal as you’ve originally thought.

By the end, everything comes down seriously to quality. Since price-wise, private label products have the top of hand, the only ace branded products have in their sleeves would have been a more superior quality. But when a private label product is backed by a reliable retailing company, the product quality is generally add up to the ones that are branded. All one has to do would be to CHOOSE WISELY.

Leave a Reply

Your email address will not be published. Required fields are marked *