Private Labels Cover Image

Сопствени марки (брендови)
Private Labels

Author(s): Filip Ivanovski
Subject(s): Economy
Published by: Економски институт - Скопје
Keywords: Private labels; factors for labels success; price-quality factors

Summary/Abstract: In their effort to increase profit and attract more customers than competitors, retailers started introduction of private label products in 1970's. Starting as a cheap no-name products that were perceived as a poor quality item, private labels has become a strong factor for differentiation between the supermarket chains and gaining competitive advantage. Although initially the reasons for PL's introduction by retailer was higher margin than national brands, differentiation and increasing customers' loyalty has become more and more important reason in the past years. There are many factors that affect the overall success of the PL's. Socio-economic situation in the country, retailer pricing policy, quality of the PL's, promotions intensity, positioning in the supermarket, image of the retailer ... these are the pieces that make the picture of success or failure for each PL's product. This research shows that price/quality ratio is the most important success factor for PL's, but still has to be accompanied with initial promotions and good positioning on shelves. Initially PL's were perceived as low price and low quality products. But, few supermarket chains have developed premium private labels and are perceived as high quality products. Availability of new technologies has made a quality of PL's almost the same like national brands. Even more, in many cases national brands producers are producers of PL's as well. Still, findings show that consumers perceive PL's as products with lower quality than national brands. PL's buyers in Macedonia are still not group on any social or educational background. The study confirms the up-wards trend in sales of PL's within national retailers. The percentage of PL's sales in comparison with total sales of supermarkets varies from 3% to 18%, depending on the retailer and it' strategy. Comparing with other EU countries where it goes up to 40% of total sales, national retailers seem to have a great potential to develop their private label products in the upcoming years...

  • Issue Year: 10/2008
  • Issue No: 2
  • Page Range: 115-140
  • Page Count: 26
  • Language: Macedonian