Tapping the potential space-positioning of private labels

Abstract

Purpose The purpose of this study is to analyze the current scenario of private labels from consumers and retailers’ point of view and provide inputs to the retailers that will help them to increase their profitability. Profitability for retailers is a resultant of efficient inventory management in a limited space. This paper studies consumer’s purchase behavior and facilitates retailers in their decision-making of the dilemma between the appropriate mix of national brands (NBs) and private labels to increase their profitability. Retailers will be able to do cross-merchandising of the categories of the goods having strong associations and will increase the shelf space of the products, which are preferred by customers. Design/methodology/approach Market basket analysis was done for 1,223 transactions including two or more product categories in each transaction. In total, 564 products were studied and these products were further divided into 23 categories. Lift analysis was done 4 times to find an association between the products of all the categories. Findings The results find a strong association between some categories and advocate the placement of these combinations together – one being a NB and another private label. Research limitations/implications Analysis of only a limited set of brands and their product categories for a value retailer cross-merchandising. Originality/value The analysis of sales transactions will help retailers in determining the associations between product categories. This association will be helpful in placing their private labels vis-à-vis NBs to do cross-merchandising and allocating judicial space to the product assortment to increase their profitability.

Private Label Brands Awareness: Advances and Prospects

“…In support of the own name branding strategy, Heider's balance theory assumes that consumers are likely to associate themselves with brands that are produced by firms with a reputable image. Within this context, consumers are more likely to relate and opt for private label brands with their store or chain's own name, if it has a reputable image [31]. With the former, the opposite is true if the store or chain name is not reputable.…”

Reflective-Formative Hierarchical Component Model for Characteristic-Adoption Model

“…The PL idea originated from retailers' aggressive response to expensive national brands (Fitzell, 1982). PLs usually charge less than national brands to directly compete with them under the same roof (Sharma et al, 2020). However, because of fierce competition from national brands in the early 1920s, many dealers started to place a higher priority on price than PL quality (Fitzell, 1982).…”

Role of Brand Trust in Private Label Adoption Model- an Affective and Trust-based Innovation Characteristic

“…Private Labels (hereafter, PLs) are brand names created, fully owned, and controlled by retailers to market products that are sold exclusively at their retail stores (PLMA, 2022). PLs, are frequently priced lower than National Brands (hereafter, NBs) in a retailer's chain of stores to compete with them under the same roof directly (Sharma et al, 2020). Today, the quality of Private label (PL) products is thought to have greatly improved, with the PL constituents reportedly being on par with or even better than NBs (Olsen et al, 2011).…”