Lately, private label products have made a significant impact on the U.S. market, affecting just about everyone, from producers to retailers to consumers. Private label goods are products whose name or brand solely belongs to a certain retailer (e.g. Wal-Mart and Marks & Spencer). Let’s say that you’re in a grocery store. In the beginning you see dozens of gourmet sandwiches with brands that have long been familiar to you. You then head to Marks & Spencer and lo and behold, now they’re selling 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 clothing store brands are products where in fact the retailer’s name is a strong element in its packaging and marketing aspects; store sub-brands are products whose link with the retailer is minimal; umbrella branding is a strategy the place where a retailer uses only 1 private label for different product categories and finally there are individual brands in which one private label is accorded to one product type.
The advantages are needless to say numerous, to all or any key persons involved. For the retailer, one of the most obvious pros is the upsurge in sales. And since it’s their very own private label, the retailer then has the freedom to produce its own marketing strategy, do have more control over its stock inventory and possibly use it also to achieve an even more positive image to the public. And with a confident image, this would needless to say result in stronger customer loyalty. Naturally, having a personal label for one’s products will mean investing a lot of money so the retailer must be sure that it has the capital necessary for this kind of venture. Secondly, many people still view private label products as something synonymous to lower quality products so this is another issue that the retailer must try to combat as they launch their new line.
For producers and suppliers, the features of producing private label products for a retail company is less visible but still present, nonetheless. For just one, they remove a lot of the entry barriers a producer usually faces as they fight entering a market because they’re supplying right to the retailer itself. Secondly, for cash-strapped suppliers, manufacturing private label products will let them enter the larger and high end markets. The downside of all these needless to say is when the product does not perform as expected. Low profit could then affect the connection involving the supplier and retailer.
For the buyer, the advantages and disadvantages are almost equal. Most private label goods are cheaper than branded products. This may, needless to say, translate to lower expenses for consumers, a thing that everyone would no doubt welcome. However if the quality of the product is sub-standard, as some private label goods are, maybe you’re not getting the most effective of the deal as you’ve originally thought.
By the end, everything comes right down to quality. Since price-wise, private label products have the upper hand, the sole ace branded products have within their sleeves will be a more superior quality. But when a personal label product is backed by a reliable retailing company, the quality is normally add up to those that are branded. All one has to accomplish would be to CHOOSE WISELY.