Essay about Hansson Private Label, Inc Case Analysis

During the second half of our trading period we focussed massively on the private label market and found our niche there. We had realized that the minimum cost of the product wins the market share so we started experimenting with S/Q Ratings and percentage of superior materials to come up with the best product with the least cost price. Adding minimum profit margin to the cost price we were able to seize a massive chunk of the private label market. Attached are a few snapshot highlighting our success in that market.

1. How would you describe HPL and its position within the private label personal care industry?

Personal Care Industry in India has experienced a steady growth in the past few years. It has followed an entirely different trajectory of growth as compared to the rest of the segments in the FMCG market. There are multiple reasons behind the growth of personal care segment in India which have been elaborated in the case study. The overall Indian personal care market has the potential to grow at 15%-16% p.a. from the current estimation of USD 10 Billion (61,000crore). The personal care market comprises of distinct segments such as skin care, hair care, oral care, cosmetics, fragrances and other toiletries. Since

This product has strong antiperspirant and anti-staining prosperities, resulting in a universal appeal for the whole market. There is prospective for between 7.5% and 20% market share inside five years. Expected revenues inside five years are between $7.5M and $13M at a margin of around 50%. Development costs are low at less then $500k. However, at the higher end of the market share in 3 to 4 years, new plant will be required to meet scale at the cost of $6M. To meet potential low price scenarios, the current plan will be to expensive and automation will be required at the cost of $12M. Initial market testing is positive but not great.

Private labels are products marketed by retailers and other members of the distribution chain. Private labels are often referred to as store brands when they actually adopt the names of the store itself in some way and should not be confused with generics. These type of brands typically cost less to make and sell in comparison to national or manufacturer brands. “Thus, the appeal to consumers of buying private labels and store brands often is the cost savings involved; the appeal to retailers of selling private labels and store brands is that their gross margin is often 25 percent to 30 percent – nearly twice that if national brands”. (Keller, 2013, pg.182) This provides a distinct competitive advantage for private labels.

The industry and the sector can be classified as being in a mature state. Despite this, many companies in the sector are able to achieve higher profit margins due to strong brand name recognition, innovative products and good marketing techniques. A trend observed in this industry was to focus on primary strengths rather than on diversification strategies, which was the case in 1990s. This allowed many companies to sell off their non-profitable businesses and for others acquiring of cash cows. Procter and Gamble followed the suite when it acquired Clairol.

What is the Fresh & Easy value proposition? Is it likely to be appealing in California,

CPI has revenue of $200 million and a regional US presence. This is significantly different from our competitors. Procter and Gamble has sales of $85.14 billion, Colgate-Palmolive sales of $16.73 billion, JNJ $65 billion and Unilever $61.12 billion. Additionally, these are global companies, especially P&G and Unilever. All three have much wider product lines and greater diversification than does

Regaining lost market share is the job at hand for the market leader in the soaps and detergents category which is fast expanding with new and old players in the segment adopting an aggressive stance. In fact, soaps and detergents have always contributed a big chunk (41 per cent) of HUL's turnover. But the profit margins in this category have been under pressure and a tough competitive environment has

In 1990, Procter & Gamble ( P & G) faced some difficulties in selling their products globally. This is due the inability to produce new products and response to the consumer’s changing needs. The company’s products in market sold less than expected sales and getting reduced for several years. Most of the products are unnoticed by customers. The company practice dictated a multibrand strategy. P & G offer a new brand for every product in each category. This method looks like working well in laundry detergents and other categories but not at all. Moreover, new designation of product would bring higher operating costs and need more investment in order to develop new products. So, the company just retain the old product because of uncertainty about users and premium priced line of product. For example, Pampers just retain in the market with old designation for over two decades. Unfortunately, P & G calculation totally out of box which bring adverse effect to

First, identification of the strategies used by P&G is relevant to the discussion of its maintenance of its position or its loss of luster. The essence of a differentiation strategy encompasses developing the unique nature of the product or business to attract and retain its customers (Rothaermel, 2015). Procter & Gamble, via information contained in its marketing releases, pursues quality and value in its consumer goods offerings(Proctor & Gamble, 2017). According to P&G, it is directing significant resources towards research and development. Additionally, P&G prioritizes an emphasis on uniqueness of its products. This focus drives pricing and promotion. Among P&G’s product lines, it uses different strategies. P&G uses a primary strategy of market penetration. The firm executes this strategy with the goal of increasing its market share. Through marketing campaigns aimed at increasing consumer awareness of its products, P&G makes comprehensive and beneficial (incentive-laden) agreements with retailers to place its products in prominent locations

The reason for retailers to launch their private labels is obvious isn’t it? They can set their own prices, while having a control over the entire process from the manufacturing to distribution. Their margins on these private labels are therefore significantly higher. Future Group’s Food Bazaar would hence boost its private label, ‘Tasty Treat’ over its competing brands. But is there more to

The organization must continue advancing to defeat such issues in view of changing economic situations. Procter and Gamble's qualities empower the business to keep up its market position regardless of elevated amounts of rivalry with other buyer products firms, for example, Unilever or

Many retailers are giving more and more offerings in their different product categories, Bigbazaar, Easyday, Spencers etc are among them. For example private label share in Spencers is 60% of its 650 product categories, and the sales of private labels are growing almost at the rate of 40% annually. In Lifestyle International private labels contribution is approximately 25% of its sales etc. (Reyes,

(2010), private label brands have established their market in the United Stated and Europe in the past few decades. The consumers tend to perceive private label brands as a substitute or choices to the national brands [Lupton 2010].