Consumer perception of private lebels

Abstract

This report is an attempt to study the consumer perception of private labels in India. Private labels are defined as retailer’s own brands. Private labels can be categorized as store brands, umbrella brands, individual brands and exclusive brands. Private labels are profitable for retailers while delivering low prices for the consumers. They fill the gap between the high priced national brands and un-branded, uncertain-quality generics These private labels are hugely successful in US and Europe with eminent retail chains like Walmart, Zara, Ikea, Tesco, Carrefour, Target, Aldi generating as high as 50% revenues from the sales of their own store brands. In India, the retail revolution itself is a recent phenomenon. The malls, superstore structure came into existence in late 90s with the retail chains like Shopper’s Stop, Pantaloons, Nilgiri’s etc. With a span of 7-8 years, we have hugely successful retailer brands like Pantaloon’s and Westside, which stock up as much as 80% in private labels. Multi branded malls like Shopper’s stop and food bazaar are also stocking up private labels to boost their sales and profit. Our experimental study revealed many facts about Indian consumers’ perception of private labels and what are the implications of these for the retailers and manufacturer brands. Awareness levels for store brands are not high for Indian customers, and they try to extrapolate the perception of Store’ quality onto the store brands. Thus, retailers have to create awareness of their own brands and at the same time maintain the ‘image’ of their store well as this will be reflected for all its store brands. Also, the segmentation of customers is solely on the basis of price and quality perception, and not based on lifestyle values. Retailers should take a cue from this and judiciously price their products, offering maximum utility to the consumers. The future trend is towards the growth of private labels. But how they will grow and how manufacturers will tackle their growing cult is yet to be seen.