Presentation on Private Label Brands & New Retail Environment by Nitesh Singh Patel, IMT nagpur

1. RETAILING : PRIVATE LABELS & THE
NEW RETAIL ENVIRONMENT
PRESENTED BY:
Nishant Agarwal (2013174)
Nishant Renjith (2013175)
Nishidh Lad (2013176)
Nitesh Beriwal (2013177)
Nitesh Singh Patel (2013178)
SECTION-D

2. “There is only one boss. The customer. And he can fire
everybody in the company from the chairman on down,
simply by spending his money somewhere else.”

3. RETAILING :
PRIVATE
LABELS & THE
NEW RETAIL
ENVIRONMENT

4. What is Retailing?
 Sales of goods and services to the ultimate consumer for the
personal, family or household use.
 Any organization selling to final consumers- whether it is
manufacturer, wholesaler or retailer.
 In the channel of distribution, retailing is where customer meets the
product.
 Exchange

5. Types of Retailers
1. Store Retailers
2. Non store Retailers

6. Store Retailers
1. Speciality Store : Narrow Product line.

7. Store Retailers
2. Department Stores: Several product lines

8. Store Retailers
3. Supermarkets:
 Large low cost,
 Low margin,
 High Volume,
 Self Service store
 Meets all household and food products

9. Store Retailers
4. Convenience store/ Drug stores: Small store in the
residential area open 24/7

10. Store Retailers
5. Discount store:
 Low price
 Low margin
 High volume store
E.g. Walmart

11. Store Retailers
6. Extreme value or hard discount store:

12. Store Retailers
7. Off Price Retailers : Leftover goods, overruns, irregular merchandise
sold at less than retail.

13. Store Retailers
8.Superstore: Huge selling space, routinely purchased food and
household items, plus services

14. Store Retailers
9. Catalogue showroom:
 High markup
 Fast moving
 Brand names

15. Consumer Preference
1. Self service
2. Self selection
3. Limited service
4. Full service

16. NONSTORE RETAILING
1. Direct Selling:
 Multilevel selling
 Network selling

17. NONSTORE RETAILING
2. Direct Marketing:
 Telemarketing
 Television direct response marketing
 Electronic shopping

18. NONSTORE RETAILING
3. Automatic Vending:

19. CORPORATE RETAILING AND
FRANCHISING
1. Consumer Cooperative:
 Owned by customers
 Members contribute money to open their own store
 Vote on its policies
 Elect a group
 Manage it
 Receive dividends

20. CORPORATE RETAILING AND
FRANCHISING
2. Franchise Organization :

21. CORPORATE RETAILING AND
FRANCHISING
3. Merchandising Conglomerate: Diversified retailing lines and formed
under central leadership, with some integration of distribution and
management.

22. NEW RETAIL
ENVIRONMENT

23. What Has Triggered the
CHANGE….
•Fast changing Macro and Micro
Environment
•Growing consumer expectations.
•Exhaustive Competitive pressure.
•Growth of Urbanization.
•High disposable income.

24. NEW RETAIL FORMS &
COMBINATIONS
•Bookstores featuring Coffee
Shops.
•Gas stations including food
stores.
•Shopping malls and stations
having peddlers’ carts in their
aisles.

25. Store Based & Non Store
Based Retailing.
•Increased offerings through mails,
cell phones and internet.
•Non store based retailers enjoy
convenience leverage.
•Store based retailers coming online
to compete.
•More and more experiential touch
being given to the physical stores.

26. GROWTH OF GIANT RETAILERS..
•Inherit superior information systems, logistical systems
and buying power.
•Crowding out small manufacturers.
•Suggest even companies for improvement and
innovations.
•Includes huge market share.

27. Growing Investment In
Technology..
•Improved ways of forecasting, inventory control
and order processing.
•In store programming on LED’s, electronic shelf
labeling and smart shopping carts getting
common.
•Digital advertising and different payment methods
creating further space.

28. •Global Retailers snatching grounds.
•Growth of Shopper Marketing.
Influencing customers at the
point of purchase.

29. Marketing Decisions
Target Market
Channels
Product Assortment
Prices
Services
Store Atmosphere
Store Activities and Experiences
Communications
Location

30. Target Market

31. Channels

32. The collection of goods or services that
a business provides to consumers. The
main characteristics of a company's product
assortment are:
(1) its length or number of products,
(2) its breadth or number of product lines,
(3) its depth or number of product varieties
within a product line and
(4) how products relate to each other in a
retail environment.
Product Assortment

33. Price
Fine Specialty Stores:
High-Markup, Lower-
volume group
Mass Merchandisers and
Discount Stores: Low-markup,
Higher-volume group

34. Services
Prepurchase
Services
•Advertising
•Fitting rooms
•Fashion shows
Postpurchase
Services
•Shipping & Delivery
•Alterations
•InstallationsAncillary
Services
•Parking
•Repairs
•Rest rooms

35. Store Atmosphere

36. Communication

37. Location
 Central Business Districts
 Regional Shopping Centers
 Community Shopping centers
 Shopping strips
 A Location with a larger Store
 Stand-alone stores

38. PRIVATE LABELS
I DON’T WANT TO TALK IN TERMS OF MARKET SHARE.
I DON’T WANT TO SHARE MY MARKET WITH ANYONE.
-LARRY LIGHT, CEO
WALLMART

39. Definition
 Private labels are retailer brands.
 Brands owned & sold by retailer & distributed by retailer.

40. The Beginning
A&P’s 8 O'clock
Coffee in 1900s

41. Background of PLB
 Earlier referred as Cheaper & Low quality alternatives for national
brands.
 Just a profit making concept which needed no marketing effort
 Tescos Value Range in 1995 was the first value pay brand
 Other retailers like Sainsbury etc. quickly followed the suit
 In India in 2000s this concept came up & Future Brand came up with
“SACH” toothbrush & toothpaste range.

42. Why Did It All Begin?
 Shift of power from National brand marketers
to National Retailers
 High Quality & Low Price
 Historical perspective of key retailers of a
strong house brand.

43. How does PLB work?
 Winning strategy for improving store image and profitability.
 Offers value for money
 Increases the price competitiveness
 16-23% less price for the consumers as compared to national brands
 Differentiating factor as exclusively available at the particular store
only
 Consumers get an assurance that they can directly interact with the
owner of the brand

44. Would You Prefer A PLB Over A
National Brand?
Yes
43%
May Be
44%
No
13%
Yes May Be No

45. If Yes, Then Why?
Quality
42%
Trust on that retail store
24%
Cheaper Price
25%
No, I wouldn't prefer
9%
Quality Trust on that retail store Cheaper Price No, I wouldn't prefer

46. If No, Then Why?
Don’t want to change
brand preference
30%
No trust on quality
18%
I can give it a try
52%
Don’t want to change brand preference No trust on quality I can give it a try

47. How Was Your PLB Buying
Experience?
Average
22%
Awesome
6%
Good
63%
Not Tried
9%
Average Awesome Good Not Tried

48. Would You Like To Repeat Your PLB
Experience
Yes
89%
No
11%
Yes No

49. Food Dominates India’s Private
Label Market
 According to Nielsen’s Survey “Food”
captures 76% of the India’s Private label
Market

50. PRIVATE LABEL GROWTH
vs
MODERN TREND GROWTH

51. ADVANTAGES

52. 1. DIFFERENTIATION

53. HIGHER MARGINS

54. FREEDOM TO CREATE OWN
MARKETING PLAN Independence to retailer to use its own innovative marketing strategies
 For National Brands, Poor marketing strategy by the manufacturer not only
results in the failure of the product, but also erodes the profit margin of the
retailer

55. FREEDOM WITH PRICING STRATEGY
 Similar to the Marketing Strategy, Private Labels also give the
retailers to a chance to adopt their own pricing strategy
 Shields retailers from the losses due to longer shelf life of poorly
priced products
 Retailers can directly pass on the price benefits to the customer

56. Strong Customer Positioning
 Develops Customer Loyalty
 Uniqueness of Private Labels, helps to build brand loyalty
 Customer Loyalty has significant advantage over its competitors

57. Private Labels (Examples)

58. JOHN MILLER – AN ILLUSTRATION OF
SUCCESS
Facts about John Miller
 Came into existence in 1995 as an extension of Pantaloons
 Ranges between Rs. 800-1500
 Targeted at Premium segment customer
 Over the years it has grown from a private label to a private brand.

59. KEY TO SUCCESS OF JOHN MILLER
 One of the very first private labels in the apparel industry in India
 High quality at low price
 Reasonable Price Range
 Attractive option for value buyers

60. Contd.

61. DISADVANTAGES
 Highly Competitive Market
 High risk with reputation of the brand.
 Risk of getting into a price war
 Dependent on the supplier
 Excess focus on private labels inside the stores

62. CONCLUSION
 Win – Win situation for both, customer and retailer
 Lower prices and Higher margins
 Quality is comparable to that of National Brands
 Value for money products
 Extra care and detail

63. Contd.
 Huge growth potential
 Deeper Market penetration required
 Innovative Marketing and promotions are the need of the hour