Evolution of Consumer Perceptions Towards Private Labels
The Evolution of Consumer Perception Towards Private Labels
Introduction
In the 70s private label brands, then called "generics", were introduced by many retail chains and outlets (Paché, 2007). These products, usually packaged in plain homogeneous design with a white background and bold black letters stating the contents, and of a generally low quality, were issued as a response to the economic downturn in America and Britain, the first real recession since WWII. The end of the post war boom, signified by the high inflation and low growth of stagflation, forced consumers to become more price conscious and outlets to cater to this newly created market segment. Since then their position with the market has significantly evolved and, in the process, splintered in a number of different directions. Today, strengthened once again by a global recession, private labels have firmly cemented their place beside national brands and are now capable of competing with them on an almost equal footing.
The Private Label Manufacturer Association (PLMA) defines private labels as products that “encompass all merchandise sold under a retailer’s brand. That brand can be the retailer’s own name created exclusively by that retailer. In some cases, a retailer may belong to a wholesale group that owns the brands that are available only to the members of the group.” They are also called own brands, name brands or store brands, though these names do not have scope as wide as private label.
Over time private labels have shed the stigma acquired when they were specifically marketed as inferior goods. Consumer perception of these products has undergone a substantial shift. Now the majority of consumers do not think there is any real distinction between such products and the national brands in terms of the quality. The aim of this project is to examine this phenomenon, looking at the theories that underlie the change in consumer perception, the transformation of the marketing
Introduction
In the 70s private label brands, then called "generics", were introduced by many retail chains and outlets (Paché, 2007). These products, usually packaged in plain homogeneous design with a white background and bold black letters stating the contents, and of a generally low quality, were issued as a response to the economic downturn in America and Britain, the first real recession since WWII. The end of the post war boom, signified by the high inflation and low growth of stagflation, forced consumers to become more price conscious and outlets to cater to this newly created market segment. Since then their position with the market has significantly evolved and, in the process, splintered in a number of different directions. Today, strengthened once again by a global recession, private labels have firmly cemented their place beside national brands and are now capable of competing with them on an almost equal footing.
The Private Label Manufacturer Association (PLMA) defines private labels as products that “encompass all merchandise sold under a retailer’s brand. That brand can be the retailer’s own name created exclusively by that retailer. In some cases, a retailer may belong to a wholesale group that owns the brands that are available only to the members of the group.” They are also called own brands, name brands or store brands, though these names do not have scope as wide as private label.
Over time private labels have shed the stigma acquired when they were specifically marketed as inferior goods. Consumer perception of these products has undergone a substantial shift. Now the majority of consumers do not think there is any real distinction between such products and the national brands in terms of the quality. The aim of this project is to examine this phenomenon, looking at the theories that underlie the change in consumer perception, the transformation of the marketing