Literature Review

LITERATURE REVIEW : PRIVATE LABEL BRANDS

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Literature Review : Private Label Brands

LITERATURE REVIEW : PRIVATE LABEL BRANDS

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Literature Review : Private Label Brands

Introduction

Consumers of the 21st century are increasingly brand sensitive . This means that most consumers will deliberately change their choices of products based on their packaging , which revealed that the products are produced by those who they perceived as trustworthy or untrustworthy manufacturers . Thus , branding strategy has an increased level of importance within the concept of marketing

In the development of the

branding strategy , it was discovered that not only manufactures who designed and developed brands , retailers have also came to realize that they have a legitimate opportunity to increase profits by developing their own brands . These brands are known as `private label brands , which will be the focus of this literature review . In this literature review I will discuss previous researches that have been performed regarding private label brands and what are their implications on managerial strategies and on future researches regarding the concept Definition of Private Label Brands

Private Brands can be easily defined as brands owned , controlled and sold exclusively by distributors and not manufacturers . This definition sets the private label brands different from manufacturers brand or national brands . Several however , believed that the definition of private label branding has evolved significantly over time . The word `private label ' can sustain the birth , history and existence of store and generic brands , but it does not sufficiently capture the extent to which the private label has progressed . This argument stems from the fact that today 's private labels are no longer the low-quality , lower priced , secondary products as they might have been in the early years of their development . Today 's retail marketers are managing their proprietary brands with as much as care and innovation as manufacturer or national brands (Ailawadi , 2004

Private Label Brands Growth and Development

III .1 . US Private Label Brands : the Biggest in the World

Over the last 10 years , private labels have actually been growing twice the rate of famous household brands . In the development of the branding world , consumers are now beginning to think that private label brands are also as necessary as the manufacturer brands in the market . For most American consumers , store brands are increasingly considered the same as any other brand . They believed private label products are as good , if not better than manufacturer brands products . Recent surveys indicated that store brands have now account for one of every 5 items sold in United States supermarkets and drug chains . This goes for every type of product include the full lines of fresh , frozen and refrigerated food snacks , ethnic specialties , pet foods , canned and dry foods , over-the counter drugs , health and beauty care , household and laundry products paints , hardware , etc (Frozen , 1999

Today , private label sales are already 40 of Wal-Mart sales 126 billion ) and 50 of Tesco 's 36 billion . They are developing themselves in various categories and they are starting to compete with...