Question

Private label brands now account for 1/4 products sold in US Supermarkets, drug chains, and mass merchandisers. What accounts for the popularity and growth of these products? please write minimum 250 word and also mention the references.

Answer 1

PRIVATE LABEL BRANDS are products which are manufactured and sold under a specific retailer's brand i.e it is manufactured by a company to offer uner another company's brand name. These are also called generics which are the more affordable versions of the expensive big brand products. There is a revolutionary trend in the private label industry wherein the demand has increased manifold for the generic private products.

Reasons for their popularity are:-

(1) Value for money: Consumers no longer are being fooled by the price leverage that big established brands take for their established products. Consumer now understand generic, organic and local. They want cheaper products with similar fundtions or effects. E.g consumer prefer generic medicines over expensive established drug maker's drugs.

(2) Commands loyalty: One the consumer have tasted the private labels and become used to it time and again they will visit the same retail outlet for that particular private brand. E.g organic food like rice, dal, atta, flour available under private lable are more appreciated by consumer today.

(3) Health: Private brands have gained market by establishing themselves as healthier version, organic versions to attract the educated fitness freak consumers of today.

(4) Custom made with personal touch: Since the private brands are not magnanimous, their target population is smaller thus they provide customised versions of products as per detail furnished. Their competitve advantage is the personal touch thy add which thus attached vakue to the product in the minds of the consumer.

(5) Private labelling gives control over pricing, marketing, sales and distribution.