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Private Lable: A Growing Market

Private labels, also known as store brands, are growing rapidly in India. Retailers are introducing more private label products to increase sales volumes, negotiate better prices from suppliers, and earn higher margins of 25-35% compared to 10-12% for national brands. Popular retailers with private labels include Future Group, Reliance Retail, Star Bazaar and Food Bazaar. Common product categories include staples, home care, personal care and food items. Placement, pricing 2-4% below national brands, and loyalty programs help boost private label sales.

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Rohen Raveshia
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187 views

Private Lable: A Growing Market

Private labels, also known as store brands, are growing rapidly in India. Retailers are introducing more private label products to increase sales volumes, negotiate better prices from suppliers, and earn higher margins of 25-35% compared to 10-12% for national brands. Popular retailers with private labels include Future Group, Reliance Retail, Star Bazaar and Food Bazaar. Common product categories include staples, home care, personal care and food items. Placement, pricing 2-4% below national brands, and loyalty programs help boost private label sales.

Uploaded by

Rohen Raveshia
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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PRIVATE LABLE:

A GROWING MARKET
Presented By:
Danish Lakdawala 16
Ijaz Shaikh 36
Mohsin Khan 62
Rohan Raveshia 84
Sheetal Patni 96
History
 What Are private labels

 How it is developed or made

 Store brand revolution began in Europe and Canada

 Boots Started its private labels in 1970s


Reasons why Private Label did not
do well earlier
1. National brands were heavily advertised in TV and
Media and had a strong consumer franchise
2. Hard for the retailers earlier to gain the economies of
scale in design and production necessary to compete
against the Manufacturer Brands
3. Retailer were not sophisticated enough to compete
against the Manufacturer Brands
4. Private Label had the reputations of being inferior to
Manufacturer Brands
But…
1. Size of retail firm has increased through
consolidation

2. Private label has assumed a new level of significance

3. Private label now account for more than 25% of


business in US and 45% in Europe
Benefits of Private Labels
Drawbacks
1. Considerable investments required

2. Complications involved

3. Better training for sales associate

4. Cannot return the merchandise


Types of Private labels
1. Copycat Branding

2. Premium Branding

3. Bargain Branding

4. Parallel Branding
PRIVATE LABELS SERVE MANY
PURPOSES
1. Exclusivity and Differentiation to retailers.
2. Plugging a need gap -- for instance, Big Bazaar's label
DreamLine is aimed at providing shoppers the entire gamut of
home improvement solutions under one brand.
3. Retailers are also spurred to launch private labels given the
low penetration of most categories in India.
4. Then there is the aspect of supply chain efficiencies.

5. Private labels also help in cutting down on intermediaries

6. Dropping cost

7. Better margins for retailers

8. More customer discounts


PRIVATE LABELS CAN HELP DRIVE
PRICES DOWN
1. Private labels are generally
introduced to get higher gross
margin
Croma
 Croma is owned and run by Infiniti Retail Limited, a
100% subsidiary of Tata Sons. Woolworths Ltd, the
Australian retail giant, provides technical support and
strategic sourcing facilities from its global network.
Store Manager’s take…

 Mr. Das, store manager of Croma (Bandra) said “The


idea of having a private label was to increase volume at
our stores which would further help us to negotiate in
the Chinese market and not margins alone; though
higher margins is the dominant factor.”
Croma Pendrive

 Pendrive was available


at Rs. 525 a month ago
 Current price Rs. 490
 Placement of the

product
 Sales rep’s comments
 Personal experience
Croma photo frame
 17cms Rs 3490/-
 Philips at Rs. 4490/-
 Stacking – above Philips

 Camera case
 Croma Camera case- Rs. 899/-
 Caselogic – Rs. 945/-
 Croma’s camera is placed in

the centre
 1 Terabyte Hard Drive
 Croma’s Lomega HDD

500GB at Rs. 3799/-


compared to Seagate@
Rs. 4399/-
 Placing
 Stacking
 Placement – centre of 21’ tvs
 Price Comparison:-
 Philips – Rs. 2990
 Croma – Rs. 2484

 Different models of DVD players


placed in a different section (rows)
 DVD players section – placed next to
Sony DVD player
 Placed next to high end tvs – 5.1
Croma DVD players with Sony
closeby
 Placement
 Price:-
 Croma’s 21’’ tv @ Rs.

6895
 LG 21’’ @ Rs. 8975
 DSE foot massager spa
– Rs. 1790/-
 Croma’s foot massager

– Rs. 2490/-
 Placement
 Price Differentiation
Croma W/M
 Priced at Rs. 6490/-
with a Toaster free
 Compared to other

brands – Whirlpool
at Rs. 7790 /-
Croma Home package
Which includes a mixture grinder, juicer,
toaster
@ Rs 9999/-
Some more…
 Chroma Air conditioner
Rs. 16,490
the LOOT
Bus Stop
The LOOT Store
 When do you think it’s the
right time to go for it???
 Do they face any

competition???
 Pricing strategy???
Questions

 Designs and patterns???

 Why do they get into it???


Private labels Strategy
 Placement of the merchandise?
 Sales figures???
Some Private Brands in Food Retail
 Bharti Retail Easyday/ Wal-Mart  Future Group
◦ Great Value (Grocery) ◦ Tasty Treat(Processed Food)
◦ George (apparel) ◦ Sach (Toothpaste)
◦ Home Trends (Home Furnishing) ◦ Ektaa (Community Food)
◦ Mainstays (Plastic Containers) ◦ Premium Harvest (Staples)
◦ Kid Connection (toys, clothing) ◦ Fresh n Pure (Dairy Products)
◦ Cleanmate (Homecare)
◦ Caremate (Personal Hygine)
 Tesco/Trent Star Bazaar
◦ Tesco Value
◦ Daisy  Aditya Birla Retail
◦ All About Men ◦ More(Staples)
◦ Blue Earth(Apparels)
◦ True(Footwear)
 Reliance Retail
◦ Kitchen’s promise(Ready-to-eat)
◦ Reliance Select
◦ Enriche (Soaps and conditioners)
◦ Reliance Value
◦ Fresh-Odent (toothbrush)
◦ Dairy Pure (dairy Products)
STAR BAZAAR-The Beginning
 The hypermarket format retail chain of Trent Ltd
 Trent was founded in 1998 by Ms. Simone Tata, mother of its present Managing

Director Noel Tata


 Low-priced, discount-based hypermarket, which is usually spread over 75,000

square feet
 The first store opened in Ahmedabad in 2004
 Stocks a whole range of products from food and grocery, to apparel, home and

personal grooming products.


 Four stores in three cities (Ahmedabad, Bangalore and Mumbai)
Private Labels-The Moolah
 In food and groceries margins of 25-35 percent
 National and regional brands give margins of 10 to
12 per cent
 For Star Bazaar- Private labels contribute 2-4%
revenue
PRIVATE LABEL-Toiletries
 Market Leader- Harpic
 SKU-500ml
 -Harpic- `54
 -Star Bazaar - `45
 Bulk deal of star bazaar
phenyl and toilet cleaner-
`49
PRIVATE LABEL-Home Care
 Market Leader-VIM Bar

VIM:

-SKU 762 gm (Pack Of 3) `33

-SKU 254 gm `15


 Star Bazaar:

-SKU 795 gm (Pack Of 3) `31

-SKU 380gm `14


PRIVATE LABEL-Home Care
 Market Leader: Vim
 Vim Drop:

-SKU 225 ml- `36

-SKU 500ml- `69


 Star Bazaar wash Active gel:

-SKU225 ml `25

-SKU 500 ml `59 plus a

star bazaar scrub free


Private Labels Food category
 Pickles
 Corn Flakes
 Big placards, saying these
are 21 to 37 per cent
cheaper than national
brands
STAR BAZAAR SAVINGS CARD
 A ‘Loyalty Campaign’ to ensure repeat purchase by
the customer
 1 point on purchase of Rs400
 4 points on purchase of private labels
 Encouragement to buy private labels
 Food Bazaar is a chain of food retail stores founded
by Kishore Biyani, regulated by Future Group of
Companies
 It is said that the chain was inspired by Saravana
Stores
 Its first outlet opened in Kolkata in late 2001
 Currently it has approximately 140 store across India
Tasty Treat Bhujia
Current Trends in Private Labels
 Industry Estimates- 80% of customers are repeats and its natural for them
to develop a faith in retailer’s own brands
 Spencer’s has private labels in about 60% of close to 650 categories it sells
 Spencer’s private label sales are growing 40% annually
 Kabir Lumba (MD Lifestyle International) says- Private Labels contribute a
quarter of its sales
 HUL, P&G, Reckitt, Kellogg’s Raise Margins up to 25%
 Future Group’s Tasty Treat now ranks 7th among all SKU’s across
categories ahead of Lays and Haldiram

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