Basics of a "Store Brand"

 

Store brands are a line of products strategically branded by a retailer within a single brand identity. They bear a similarity to the concept of house brands, private label brands (PLBs) in the United States, own brands in the UK, and home brands in Australia and generic brands. They are distinct in that a store brand is managed solely by the retailer for sale in only a specific chain of store. The retailer will design the manufacturing, packaging and marketing of the goods in order to build on the relationship between the products and the store's customer base. Store-brand goods are generally cheaper than national-brand goods, because the retailer can optimize the production to suit consumer demand and reduce advertising costs. Goods sold under a store brand are subject to the same regulatory oversight as goods sold under a national brand. Consumer demand for store brands might be related to individual characteristics such as demographics and socioeconomic variables.
 

How Store Brands Relate to Customers

A store brand is a way of relating to different customers. Different types of store brands can relate to a customer through the choice of branding and building a relationship with the consumer. Store brands can relate to a consumer through various characteristics such as different demographics.

Store Brand versus National Brand

The store brand is the only brand in which the retailer has the full responsibility of control such as development, sourcing, warehousing, merchandising and marketing. Whereas retailers make different decisions about national brands and leave it up to the manufacturer. With a store brand it is more important for the retailer as it plays a more definite role in the achievement or failure of its own label. This information is based on data from 34 food categories at 106 major supermarket chains, which operate in the largest 50 retail markets in the U.S. (Dhar, S. K., & Hoch, S. J. 1997) Although national brands have long dominated the retail scene, retailers generally use their national brands to draw customers to their stores. Recently department stores, supermarkets, service stations, clothiers and chemists have started to increase more store brands. Studies show that consumers are buying more and more store brands and don’t plan on returning to national brands anytime soon. (Kotler et al. 2013) Store brands are generally cheaper than national brands, which, with consumers becoming more price-conscious and less brand conscious, has increased store brand sales. (Kotler st al. 2013) Some marketers have predicted that store brands will eventually knock out all the strongest national brands.( Kotler et al. 2013) Store brands have a tendency to generate higher margins than national brands. Store brands have previously been known as low-price and low quality brands, but now they are currently positioned as value brands and brands with the aim to have the quality equivalent to manufacturer brands, but with lower prices.

Quality

The quality of a store brand product is not necessarily inferior to that of national brand products, it simply has lower research, development and advertising costs than what national brands incur.

The cost for a store brand product is estimated to be 25% less than national brands (Business insider, 2014). Studies indicate that testing was done on store brands and national brand products and it was found that 33 of the 57 store brand food items tasted as well or better than the national brand products. (Weisbaum, H. 2013) Todd Marks, a senior editor at consumer reports stated that products may be equal in quality but have different flavour profile based on ingredients or recipes.

Some examples of differences of taste in store brand products compared to national brand products include when Walmart’s Great Value vanilla ice cream was rated almost equal to the Breyers variant, when all seven store-brand cashews rated better than Emerald cashews, and when the national brand and Trader Joe's mixed vegetables were rated crisper and fresher than Birds Eye, among many examples. Results like this have the potential to spur a big change in the grocery shopping habits of customers and what they purchase.

Advantages of Private Branding

• Private labels offer retailers control over products factors such as size, package design, production and distribution.
• Gain market share over national brands.
• Logos and taglines can be customised to the customers shopping experience.
• Store labels can shape shoppers in store experience.
• Retailers have more control on decisions of store brand products.
• Category gaps that haven’t been filled by national brands can be done.
• National brands have competition and need to be innovative.
• Store brands have increased revenue on local and a regional level, which is contributing to an overall positive economic outlook.
• Product images are increased due to more competition.
• Specialised marketing plans towards a store brand.
• Store brands quality is now increasing due to higher demand.
• The better the store brand usage, the better the direct effect of store brand value for money on store brand loyalty.

                              https://en.wikipedia.org/wiki/Store_brand