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RETAILERS’ OWN BRANDS

RETAILERS’ OWN BRANDS. DEVELOPMENTS. DEVELOPMENTS IN OWN BRANDS The growth in market shares Retailers’ brand developments STRATEGIES OF OWN BRANDING Retailers’ objectives The supply of own brands Differentiating own brands CONSUMER RESPONSE TO OWN BRANDS Own brand purchasers

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RETAILERS’ OWN BRANDS

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  1. RETAILERS’ OWN BRANDS DEVELOPMENTS • DEVELOPMENTS IN OWN BRANDS • The growth in market shares • Retailers’ brand developments • STRATEGIES OF OWN BRANDING • Retailers’ objectives • The supply of own brands • Differentiating own brands • CONSUMER RESPONSE TO OWN BRANDS • Own brand purchasers • Perceptions of quality and price

  2. Products sold under a retail organisation’s house brand name, which are sold exclusively through that retail organisation’s outlets (J. Walter Thompson, 1970) • A brand name owned by the retailer or a wholesaler for a line or variety of items under exclusive or controlled distribution (Koskinen, 1999)

  3. ‘Species’ of Retailer Brands NSERT

  4. Own Brand Shares in Europe

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  6. Drivers of Retail Brand Growth

  7. Trends in Retailers’ Own Brand Shares

  8. European Retailers’ Own Brand Shares

  9. STRATEGIES OF OWN BRANDING • Retailers’ Objectives • Supply of Own Brands • Differentiating Own Brands

  10. Most Important Reasons to Carry Own-Brands

  11. The Economics of Own Brands

  12. The Economics of Own Brands

  13. Own Brand Suppliers • Mixed Brand Policy • e.g. Northern Foods supply many retailer brands (notably Marks & Spencer and Tesco), as well as promoting the Fox’s and Bowyers brands • The Final Frontier?? • “If you don’t see Kellogg’s on the box, then it isn’t Kellogg’s inside the box” • (but, Kellogg’s supplied Aldi own brands in 1999)

  14. Own Brand Price Differentials

  15. ‘Lookalike’ or ‘Copycat’ Brands

  16. the clothing sector, fashion and design can be major sources of differentiation: • “An equation of style, quality and price … with a brand image that is acceptable and safe” (Next brand proposition)

  17. CONSUMER RESPONSE TO OWN BRANDS • Who Buys Retailer Brands? • Perceptions of Quality and Price

  18. Regular Purchasers of Retail Brands

  19. Varying Need States and Product/Brand Choice

  20. Brand Importance and Buying Patterns

  21. Price/Quality Images of Retail Brands

  22. Belief That Highest Prices = Highest Quality

  23. OVERVIEW Own • Own brands come in many different variants • They account for over 30% of retail trade in the UK and are generally on the increase elsewhere • For some companies, 50-60% own brands seem optimal, while others sell 95-100% own brand • Own brands can help profit margins, increase turnover, reinforce store image and increase loyalty

  24. As product specifications become more exacting, more stable supply chain arrangements needed • Price differentials vary enormously but generally own brands are 20-40% cheaper than leading manufacturer brands • Own brands bought by most market segments, often as part of a repertoire of brands • Own brands now more trusted, bringing some convergence with manufacturer brand positioning

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