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  • Topic: Private label, Brand, Brand management
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  • Published : May 19, 2013
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issue 7

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Complimentary article reprint

Battle for Brands in a World Private l aBels
the
of
BY PAT CONROY AND ANUPAM NARULA > ILLUSTRATION BY JOHN UELAND

This publication contains general information only, and none of Deloitte Touche Tohmatsu, its member firms, or its and their affiliates are, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your finances or your business. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. None of Deloitte Touche Tohmatsu, its member firms, or its and their respective affiliates shall be responsible for any loss whatsoever sustained by any person who relies on this publication. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms. Copyright © 2010 Deloitte Development LLC. All rights reserved.

Battle for Brands in a world Private l aBels
The
of
by Pat Conroy and anuPam narula > IllustratIon by John ueland

Deloitte Review

d e l o i t t e r e v i e w. c o m

19

Janet

glanCes at the

Items In her shoPPIng Cart and then at her groCery lIst, realIzIng that thIs Is goIng to be an exPensIve trIP. she wonders how muCh she Could save by rePlaCIng more of her famIly’s Preferred natIonal brands wIth the store brands. after all, nobody notICed when she swItChed the Canned vegetables, Pasta, and ICe Cream. her daughters’ breakfastIng obJeCtIons to store brand Cereals subsIded by the thIrd mornIng. sImIlarly, her husband raIsed hIs eyebrows when she brought home store brand d e l o i T T e r e v i e w. c o m

Deloitte Review

20

t h e B at t l e f o r B r a n d s i n a w o r l d o f P r i vat e l a B e l s

ketchup, sliced cheese and soft drinks, only to raise them even further when she described the price difference. Nonetheless, the family held the line in the soft drink aisle. “I know times are tough,” said her husband, “but surely there’s another way to save.” Now, Janet only purchases national brand soft drinks during sales or in bulk. In the next aisle, Janet’s neighbor David shuffles by. “What do you think of those store brand paper towels?” she asks. “It’s all from the same tree and costs less. My family can’t tell the difference.” “Probably true,” says Janet as she adds store brand paper towels to her cart. “I am open to saving a few bucks – it adds up quickly. The feeling that I am paying for advertising when I buy a national brand is tough to stomach in this economy.” “My kids actually prefer the store brand frozen pizza. It’s funny because my mother always avoided store brands; if she could see us using these paper towels now …” David shook his head and they both laughed.1 The BaTTle for Brand loyalTy

C

onsumers like Janet and David are emblematic of store brands (or private label goods) gaining market share at the expense of national brands. Between

2006 and 2009, market share rose across 74 percent of products in the personal care, household goods and food and beverage categories in the United States, according to Information Resources, Inc.2 In 2009, store brands represented nearly 18 percent of consumer packaged goods spending and over 23 percent of CPG products sold.3 Many consumers increasingly sense a diminishing discrepancy between the quality of national brands and their private label counterparts as retailers sharpen their focus on store brands and garner loyalty, and consumer product companies cede connections to...
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