An own brand is a product that has been manufactured by one producer but is sold under a different brand. Earlier such goods were not very popular on the market, but the situation has changed.
More than a few years ago, consumers were not wanted to choose products under their own brand, because they believed that such goods have worse quality, compared to products under the brand of large and well-known manufacturers. The biggest advantage of own brands was the price. Consumers wanted to save by choosing a product under own brand.
Power of operation under own brand
– Advantage over competitors. This point mainly applies to retail chains that offer products with their own brand. When products appeared under the private label for retail chains, it was an advantage in itself. They could control the quality of the products and sell them at a lower price.
– The possibility of offering a new product on the market without investment outlays.
– Quick launch of a new product.
– Less investment to promote the brand.
– The possibility of obtaining more income by earning a higher margin.
– For the retail chains, products with their own brand help build the image of a trusted company in the mind of the consumer.
– For producers, producing products under a different brand is an opportunity to establish long-term cooperation. For small and medium producers, products under the own brand are an opportunity to find a market for goods.
Weaknesses of operation under own brand
– Consumer behaviour is currently changing. For them, aspects such as price, appearance, and volume play an important role. For consumers, an important combination of product quality and price. Therefore, it is worth taking care of the appearance of the product under your own brand. Retail chains usually build the identity of their products under their own brand based on material, emotional and universal values.
– The label of the product must necessarily include information on the manufacturer.
– Sometimes private labels mislead consumers. Because the seller wants to carry lower investment costs by launching a product under his own brand. That is why he uses the popularity of already known brands, trying to make its product look like them.