There is little doubt that private brands are at the heat of marketing and business
strategy. Strong brands can make companies win in today’s highly competitive
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Retailers have extended the concept of private label to identify a brand with a store, a concept known as the store brand. This can be a far more profitable business than selling nationally advertised brands. A Food Marketing Institute study in the U.S. found that retailers earn a 35 percent gross margin on store-branded products compared to 25.9 percent on comparable nationally advertised brands.
Another use of private labeled products that has seen good growth is by small companies, raw foodies, sustainable buyer’s clubs, online shopping carts, personal brands too!
Private label brands are those offered by retailers. There are various advantages for the retailers to go for private label brands.
The advantages include:
Control over pricing of the product/services
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.
These points provide an edge over the other brands. Private label brands are available in a broad range of varieties from food to cosmetics. These brands help create a personalized and unique brand for retailers. Retailers with pretty good private label brands will be able to create better sales opportunities for themselves. They can build value and recognition from the customers. Private brand products allow retailers to differentiate their products from competitors’ products, and provide consumers with an alternative to other brands.