Introduction to the study

Introduction:

“The Twentieth Century was the century of manufacturer brands. Consumers moved from no-name products […] to branded products from global manufacturers led by Coca-Cola, Disney […] Private Label are growing rapidly in the first decade of the twenty first century.” (Kumar & Steenkamp (2007) pp 1-5)

In the United Kingdom in the food market a product sold on two is a private label brand or own retailer’s brand. Europe has the biggest market for private label in terms of volume, in front of the United States (PLMA, 2010). The private label brand, for a company is a way to optimize margins by proposing a unique product to the consumer, because none of the competitor can proposes an identical product, given that the retailer is the only one to produce it.

Indeed, a private label product costs less to produce and to promote. Furthermore, competitors cannot compete directly with the private label product brand, because the stores selling the brand are the only ones to propose them and the retailers can easily win the “war” relating to mind space and shelf space (Corstjens and Corstjens, 1998). The private label is a good method for developing customer loyalty and, indeed, if it demonstrates quality the customer will trust both the private label product and the brand.

The private label is thus, for the big brands, a means of development, if it is used in an appropriate way.

Large national brands have means always more important to emphasize, they are much more visible in the media than private labels, having already acquired fame and a means, of much more importantly of communication, but, private label brands are a way for retailers to increase their bargaining powers with manufacturers and national brands (Tarzijan, 2004).

It is thus advisable to investigate the effectiveness of this private label revival for the brands before they develop even more, and also to understand the consumer habits that