A study was conducted to know the level of awareness and extent of preference for private labels in smaller cities. The consumer perceptions are studies on three different dimensions; Manufacturer's brands vs. private labels, different product categories (generic, processed food and cleaning products) and different levels of retail categories (Local vs. National). These findings may usher in new hope for the regional small retailers.
The entry of big industrial groups into the retail scenario has
created new challenges for manufacturers’ goods.
Conventionally, private labels are viewed as a weapon to
fight strong manufacturers’ brands. A big powerful retailer with a
strong brand name has direct contact with consumers and, thus,
trust, goodwill and friendly relationships are built by them over a
period of time. Launching of retail brands is an opportunity to
leverage the above-mentioned intangible assets. It is common
knowledge that certain big retailers like Pantaloons, FoodWorld,
Shoppers’ Stop, Globus, Giant and Big Bazaar have created a
revolution in retailing by launching private labels.
Regional players find it suitable to launch private labels in
low-product involvement goods such as butter, flour, and sugar,
dal, rice and other generic products. Most often, such products are
staple ingredients of larger recipes and individual performance
becomes unidentifiable in the resultant mix. However, as the private
label market matures, it also takes on more diverse products like
processed food and cleaning products. Because private label
products are less expensive, one might be tempted to think of them
as a low quality alternative.
In the present study, not much difference was observed in the
perceptions of the consumers between the three different product
types detailed above. This could be explained by the fact that all
the three product types elaborated above are low involvement
products. Therefore, the importance attached to brand name and
other related factors is offset by the price advantage that private
labels possess particularly in the case of low involvement products.
The results of the study would have been different if a high
involvement product and low involvement product were chosen
and the preferences of the consumers with respect to the same
studied. |
