Innovation in Private Labels- The Case Study of Marks and Spencer and the challenge when applying to private labels’ market in Vietnam.

Topics: Private label, Brand, Innovation Pages: 26 (6524 words) Published: October 11, 2013
Essay
Innovation in Private Labels- A case study of Marks
and Spencer- British retailer and the challenge
when applying to private labels’ market in Vietnam.

Name: NGUYEN ANH PHUONG

List of Abbreviation:
List of Figures
List of Tables:
I.

Introduction:………………………………………………………………..4

II.

Literature review …………………………………………………………..5

1. Overview of private labels………………………………………………….5 A. Definition of Private Labels…………………………………………………………………................5 B. Global Private label trends……………………………………………………………………………..6 C. Private labels vs National brand……………………………………………………………………..8 D. Incentives for Retailers to Create a Strong Private Label Program:……………..........9

E. Buying behaviors of private labels……………………………………………………………........9 2. Concept of Innovation:……………………………………………………14 A. Definition of Innovation………………………………………………………………………………….14 B. Business concept innovation…………………………………………………………………………..16 C. Types of innovation……………………………………………………………………………………….17

III.

Innovation in Private labels:……………………………………………..18 1. The motivation of doing innovation in private labels:……………...18 A. From the consumers’ point of view:……………………………………………....18 Page 2

B. From the retailers’ point of views…………………………………………………19

2. How private labels innovate:………………………………………….20 3. The impact of innovation’s private labels in general………………..25 IV.

Case study of Marks and Spencer in innovation of their private labels:26

1. Background of Marks and Spencer:……………………………………………………...26 2. Innovation in food private labels:………………………………………………………...27

V.

The challenge when applying innovation model in private label in Vietnam:………………………………………………………………….30

1. Private label industry in Vietnam………………………………………………………..30 2. The challenge of innovation ‘s private labels in Vietnam……………………………….30

VI.

Conclusion and recommendation:………………………………………32 Referecences:………………………………………………………………32

Page 3

List of Abbreviation:
GM: Genetic Modified…………………………………………………………………………26

List of Figures:
Figure 1: Private label introduction, as a percentage of all introductions, by region……………7 Figure 2: The private label reality is significant and mostly growing, but not everywhere……..8 Figure 3: Buying behaviors of private labels……………………………………………………12 Figure 4: The majority of consumers purchased more private label brands during economic downturn………………………………………………………………………………………….13 Figure 5: when the economy improves, virtually all consumers will continue to purchase private label brands……………………………………………………………………………………….13 Figure 6: The level of private labels……………………………………………………………..21

List of tables:
Table 1: Four dimensions of the business system……………………………………………….16

I.

Introduction:

Private labels now play an important role in retail market, which are considered as the new trend of providing new products under retailers’ names. However, existing private labels still face some prejudice in the customer point of views and difficulties in expand more sale volume and confirm their stands in the market.

Innovation in private labels is the key factor to help private labels overcome the weaknesses. With the concept of innovation and their applying to private labels products, this essay will give the overall look of how private labels in the world innovation and their impact. Moreover, the case study of Marks and Spencer will be given to clarify clearly of the issue. Besides, this essay will mention the challenges when applying innovation in private labels in Vietnam to compare with those in the world market to find out the similarity and the weaknesses of Vietnamese private labels.

Page 4

II.

Literature review
1. Overview of private labels:
A. Definition of private labels:
Private labels may also be referred to as home brands, own brands, own labels, store brands,

retailer brands or generics. Private labels which were first introduced in United States around 1900 (Hoch & Banerji, 1993) and...

References: Drucker, PF (1985). Innovation and Entrepreneurship. New York: Harper and Row.
Scotchmer, S (2006). Innovation and Incentives. Cambridge, MA: MIT Press.
Sohlenius, G (2008). The Nature of the Industrial Innovation Process. UK: Coxmoor Publishing
Company.
Utterback, J (1996). Mastering the Dynamics of Innovation. Cambridge, MA: Harvard Business
School Press.
Gassmann, O. and Enkel, E. 2006, Towards a Theory of Open Innovation: Three Core
Process Archetypes, pp
Rosenberg, N (2004). Innovation and Economic Growth. OECD, 2004.
Welfens, PJJ, JT Addison, DB Audretsch, T Gries and H Grupp (2008). Globalization, Economic
Growth, Innovation Dynamics
Barsky, M, M. Bergen, S. Dutta, and D. Levy (2001) What can the Price Gap between Branded
and Private Label Products Tell Us about Markups? NBER Working Paper No
O’Bornick. M.. 2003. The future of private label food and Drink. Growth Strategies for retailers
and manufacturers”
Page 32
Traill, W.B., Meulemberg, M.,(2002), “Innovation in the Food Industry”, Agribusiness, Vol
Gassmann, O. and Wecht, C.H. 2005, Early Customer Integration into the Innovation ProcessTowards a Conceptual Managerial Model, Proceedings of the 12th International Product
Development Management Conference; Copenhagen, available at http://www.bgwsg.
com/doc/chw2.pdf, (18/04/2008).
Mills. D.E.. 1995.Why retailers sell private labels. Journal of Economics & Management
Strategy
O’Bornick. M.. 2003. The future of private label food and Drink. Growth Strategies for retailers
and manufacturers”
Quelch. J.A.. and D. Harding. 1996. Brands versus private labels: Fighting to win. Harvard
Business Review
CONFIDENTIAL & ©RetailNet Group, www.retailnetgroup.com Page, 2010, Marks &
Spencer’s Private Label Shows its Colors
Ha Huy Dung, 2012,” The private label trend in Vietnam and its challenge”, MA
Page 33
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