HBR Article

2. PGP30148
Nadeem
PGP30292
Tushita
PGP30151
Nandita
PGP30135
Garima
Under the guidance of:
Brand Management
August, 2015
Section B, Group 7

3. Brands Versus Private Labels:
Fighting to Win

4. PRIVATE LABEL BRANDS ARE THOSE
MANUFACTURED OR PROVIDED BY
ONE COMPANY FOR OFFER UNDER
ANOTHER COMPANY'S BRAND

5. REASONS FOR
PRIVATE LABELS

6. GENERATES
ADDITIONAL
MARGIN
DIFFERENTIATE
STORE’S
OFFERINGS
FILLING GAPS
IN PRODUCT
RANGE

7. QUALITY
CONSCIOUS
CONSUMERS
LOWER COST
ALTERNATIVE
AVAILABILITY

8. CONSUMER
INSIGHTS
INCREASE IN
INFLUENCE FOR
PRODUCT
CATEGORY
USE EXCESS
PRODUCTION
CAPACITY

12. Private
label
audit
Impact of
private
labels on
national
brands
Profitability
- full cost
and
marginal
cost basis

13. WINNING
STRATEGIES
Invest
in
brand
equity
Manage
each
category
Exploit
sales
promotion
tactics
Manage
the
price
spread
Build trade
relationships
Innovate
wisely
Use
fighting
brands
sparingly
Category
profit as
performance
measure
Take
private
labels
seriously

14. Brands Versus Private Labels:
Fighting to Win
GLOBAL CONTEXT

15. Europe
The
Private
Label
Leader

19. Asia
Growth -> Why so slow?
• Asian shoppers – brand
loyal
• Retailers have not
invested in marketing;
virtually copy-and-
pasted the European
model

21. Brands Versus Private Labels:
Fighting to Win
INDIAN CONTEXT
FOOD APPAREL E-COMMERCE

22. India
• Least developed
private label market
in South-east Asia
• Modern trade
penetration – 5%
• 50% for most
Southeast Asian
markets

23. Private brands in
food retail

24. Major Brands
ABG
Feasters
Kitchen’s
Promise
Best of India
Reliance
Reliance
Select,
Reliance value,
Healthy Life,
Good life and
Dairy Pure
Future’s Group
Tasty Treat,
Fresh & Pure,
Clean Mate,
Ektaa, Premium
Harvest, Sach
V-Mart
V-Fresh
V-Needs
Spencer’s
Smart
Choice

26. What could make
private labels in
India click?

27. •Private label caters to a segment that
wants to participate in the modern
trade experience but is not as brand
savvy
•Growing levels of disposable income
•Rise of modern trade
•For decades, we have been purchasing
open stuff from local grocery stores

28. INR 600INR 350
WHAT’S WRONG HERE?

29. Basic
Positioning
Competitive Frame of Reference
Super Market Packaged
food brands
POPs
Expected product with basic
product features
PODs
Lower price

30. Salience
Judgements
Performance
Resonance
Imagery
Feelings
Rational Route

31. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pantaloon Westside Shoppers
Stop
LifeStyle Reliance
Trendz
Vishal
Store Composition across retail
outlets
Private Labels National Brands

32. Started in
1991
Owned by K
Raheja Group
74
Stores
Pioneered
launch of
private labels in
India
First Private Label-
STOP in 1994
Private Labels
contribute 20%
of sales

33. PRIVATE LABELS

35. No explicit mention of
Private Label Brands

36. List of National
Brands

37. Factors influencing the consumer
purchase decision

38. Apparel Category Brands Private Labels
Family &
friends
Endorsements
Sales
Personnel
Opinion
Past
Experience
with Brand
Advertising
In Store
Promotion
Sales or
Display

39. Apparel Category Brands Private Labels
Brand
Loyalty
Durability
Comfort
Brand
Image
Fabric
Quality
Price

40. Apparel Category Brands Private Labels
Packaging
Store
Display
Credibility
Variety
Seeking
Behaviour
Price &
Quality

41. Brand
Equity
Brand Awareness
Parent Brand : Good;
Private Label itself : Low
Brand Recall
Low. On the spot purchase

42. MEN’S FORMAL WEAR
Private Label Shirts Trousers
STOP ₹999-1799 ₹1299-1699
Acropolis ₹799-899 -
Austin Reed ₹1299-2099 ₹1700-1900
National
Brand
Shirts Trousers
Wills Lifestyle ₹1499-2300 ₹1699-1799
Arrow ₹1599-2599 ₹1399-2199
Van Heusen ₹1499-2000 ₹1599-2000

43. WOMEN’S WESTERN
WEAR
Private Label Tops Dresses
STOP ₹299-1099 ₹999
Incense ₹899-1199 ₹1299-1499
Latin Quarters ₹999-1690 ₹1800-2490
National Brand Tops Dresses
Wills Lifestyle ₹600-1500 ₹900-2500
UCB ₹500-4000 ₹2000-8000
Levis ₹400-2000 ₹800-3500

44. PRICE
Reduce Prices
PRODUCT
Fabric Quality
Increase Variety
PLACE
Increase Number
of Stores
PROMOTION
Focus on In-
House Promotion
Product Display
Strategies for Growth of Private Labels

46. Online Private Labels look beyond
price…

47. Differentiation
Celebrity
Endorsers
Higher
Margins
Myntra
Myntra

48. PRIVATE LABELS
BOOSTING SALES OF
ONLINE RETAILERS

49. 40%
margins on
private
labels
35% sales
from private
labels
20% sales
(₹1500 cr)
from
private
labels
25-30% of
digital
accessories
sales

50. Summary
HBR Article Overview
Global Context
Indian examples of Private
labels in food, apparel &
ecommerce
Application of Brand Positioning
& Brand Resonance Models

51. CREDITS
GMID Database
http://www.indiaretailing.com/7/23/25/9469/The-Growth-of-Private-Labels-in-
India
http://indianonlineseller.com/2014/04/private-labels-boost-sales-of-online-
retailers-like-myntra-fabfurnish-by-40/
http://www.business-standard.com/article/management/fight-or-play-in-private-
label-114042700607_1.html
http://www.fashionunited.in/news/apparel/shoppers-stop-bets-big-on-private-
labels-080820124017
http://www.thehindubusinessline.com/industry-and-economy/wooing-buyers-
with-private-labels/article5278637.ece
http://www.nitinbhatia.in/marketing-case-study/private-labels-long-way-to-go/
http://www.nielsen.com/us/en/insights/reports/2014/the-state-of-private-label-
around-the-world.html
http://www.reliancefreshdirect.com
http://www.irdindia.in/journal_ijrdmr/pdf/special_iss_1/10.pdf
Video:- https://www.youtube.com/watch?v=hWRJ_OuNj6A