Private label

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For the license, see Private label rights.
Swedish grocery store where private label products (under the brands Hemköp and Eldorado, Axfood) are placed along with other brands such as Knorr (Unilever) and Blå band (Campbell Soup).

Private label products or services are typically those manufactured or provided by one company for offer under another company's brand. Private label goods and services are available in a wide range of industries from food to cosmetics to web hosting. They are often positioned as lower cost alternatives to regional, national or international brands, although recently some private label brands have been positioned as "premium" brands to compete with existing "name" brands.

Contents

[edit] Types of private labels

  • Private label rights articles - A kind of content often used in online and affiliate marketing that allows buyers certain rights to change the copy in any way they choose and claim the article as their own.
  • Store brands - The retailer's name is very evident on the packaging.
  • Store sub-brands - Products where the retailer's name is low-key on the packaging.
  • Umbrella branding - A generic brand, independent from the name of the retailer.
  • Individual brands - A name used in one category, this is only used to promote a "real" discount product line.
  • Exclusive brands - Again a name used in one category, but to promote "added value" products within the category
  • Distributor brands - Smallwholesale grocers and foodservice purveyors often have private labels, for example the Parade brand of Federated Foodservice and the wide array of private brands of the large food service supplier Sysco. These brands are typically seen in non-chain independent restaurants and stores that cannot afford their own private labeling.
  • Copycat private labels - brands owned by a retailer which use similar trade dress, i.e. packaging as a leading national brand.
  • Credit cards - The retailer's name/logo and branding makes up the 'look' of the plastic card (as opposed to it being a [MasterCard] credit card, though co-brand cards also exist[1]). Credit service on private-label cards is often provided by a third-party issuer as retailers continue to outsource their in-house programs. [2]

There has been a significant increase in private label brands in the recent years worldwide. In Europe, private label goods now account for about 45% of products sold in supermarkets, compared to 25% in the USA. Wal-Mart, for instance, has a 40% private label representation in their stores.[3] Pacific rim countries, such as Australia, Singapore, and Japan, also have significant presence of private labels on store shelves.

Historically, private labels were seen as low-priced, low-quality products. In recent years, however, the consumer perception about the quality of Private label products has improved while companies have started using private labels to market higher quality items in a bid to improve their brand image.[4] [5] Reports also indicate that consumers will increasingly buy more Private label products.

Some grocery chains now sell primarily private label products. Examples include Trader Joe's and the European grocery chains Aldi and Leader Price.

[edit] Private Label Manufacturers

Private Label Manufacturer's Association (PLMA)[6] categories PL manufacturers in 4 main categories [7]: 1. Large national brand manufacturers that utilize their expertise and excess plant capacity to supply store brands. 2. Small, quality manufacturers who specialize in particular product lines and concentrate on producing store brands almost exclusively. Often these companies are owned by corporations that also produce national brands. 3. Major retailers and wholesalers that own their own manufacturing facilities and provide store brand products for themselves. 4. Regional brand manufacturers that produce private label products for specific markets.

[edit] 2007 Pet food recalls

Main article: 2007 pet food recalls

In 2007, there was a recall in the United States of more than 60 million cans of pet food sold under more than 100 brand names made by Menu Foods. The mass recall lifted the curtain on a common practice in consumer products that competing brands are often made by the same manufacturer. However, ingredients, designs and quality may differ substantially among the labels made under the same umbrella. [8]

[edit] Industry Publications

PL Buyer (Private Label Buyer) magazine is read by retail executives over North American private label programs. It is published 12 times per year by BNP Media.

Private Label Europe magazine covers private label in the European grocery sector. It is published six times per year by Madison Publications.

[edit] See also

[edit] References

  1. ^ Co-branded credit cards: a new advertising medium? BizReport.com
  2. ^ The U.S. Market for Private Label Credit Cards, 5th edition report excerpt
  3. ^ http://www.economist.com/businessfinance/displayStory.cfm?story_id=14259150&source=hptextfeature/ Consumer goods in the recession: The game has changed
  4. ^ America's Going Private Label|PLMA| http://plma.com/showinfo/showinfo2009.html
  5. ^ Store Brands Achieving New Heights of Consumer Popularity and Growth|Growth and Success|PLMA| http://plma.com/storeBrands/sbt09.html
  6. ^ PLMA Website www.plma.com
  7. ^ http://plma.com/storeBrands/sbt09.html
  8. ^ 101 Brand Names, 1 Manufacturer, Wall Street Journal, Vol CCXLIX, No. 108, May 9, 2007, p. B1
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