Private Label

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.

A brand is a name, term, design, symbol, or any other feature that identifies one seller 's good or service

Stores are also competing in other forms in order to secure loyal customers. Some of the forms are product range and quality by which stores are offering privately-labeled products that are primarily used in the commodity lines at lower prices.(Australian Government, Department of Agriculture) This has caused a significant shift in the industry, thus allowing players like ALDI who started with a private labeled product early on to gain and improve its market share. Another major form is convenience where several non-price factors such as opening hours, strategic locations, parking area, distribution options (delivery or in-store pickup) and online shopping comes into play. (Australian Government, Department of Agriculture)

Many food companies frown upon the idea of having to put labels on their foods because consumers will not want their product if their are too many GMOs in the product. If food companies were forced to put GMO labels on their products they may feel inclined to put less GMO in their products to cause consumer happiness. With labels on the food products consumers will feel more confident with their purchase to consume that food. Which would cause sales to fly through the roof for many food companies, especially organic food companies. GMO labeling influences consumer behavior, “...the majority of supermarket employees believed that the presence of non-GMO labeling influenced consumer behavior in some way, with 52.9% reporting that it impacted all consumers, 17.6% asserting that it mattered to those who were knowledgeable and interested in food without genetic modification, and only 5.9% feeling that their clientele would not be interested because of its demographics.” (Wunderlich). According to a survey done by Wunderlich, Gatto and Mangano where they investigate the current Genetically Modified Organism (GMO) and organic labeling policies and to determine the impact on consumer choice. They found: “There is a need for clearer labeling policies regarding GMO foods. If GMO foods were labeled more clearly, consumers would be able to make more educated purchasing decisions and

This left a segment open for new entrants to come with no competition from incumbents.  Private labels also did not do product proliferation and were focused on limited popular brands at low costs. This helped them save costs in R&D of new products and also save costs by not experimenting new products. They did not compete with the Big 3 on all possible niches. Also, from the table below, we see that the total costs of the private label are 40% less than the Big 3 brands, which helped them to target the price sensitive customers. They are several strategies that the private labels applied which resulted in reduced cost structure. First of all, they did not use coupons, which had accounted for 23% of the total costs for Big 3 brands. The private label also offered higher margins to retailers (15%) in comparison to Big 3(12%) in order to get premium shelf space and signage. The private labels reduced packaging costs by supplying cereals in clear plastic bags. They also used less labor intensive manufacturing process and fewer expensive fruits and nuts.

Over the past two weeks I have researched various scholarly journal entries and various articles. I was able to find ways for SHLD to increase their bargaining power. This includes introducing additional private labeled products. SHLD already provides private label products, but allowing additional private labeled products can yield higher profit margins. Furthermore, I researched both the importance of an accurate mission statement and the benefits of surveying clientele. After researching how effective a mission statement can be towards an organization, I began to focus on how to modify SHLD’s mission statement. The modification will keep SHLD on a path to success

III. Develop a Private Label Product –Fountain of Youth Spas want SNC to develop their own private label product. In doing this, SNC can expand their nutraceutical products line and increase their sales and consumer base. Sales for 2016 through 218 will increase by approximately 5%, 4%, and 3%. Additionally, it will increase EBIT margin by 2% while increasing SNC’s DSO’s and DSI. This will allow SNC to increase their EBIT while slightly raising their accounts receivable figures. “Selling the private label product to Fountain of Youth Spas increased SNC's EBIT margin, only modestly resulting in increased accounts receivable and inventory balances” (University of Phoenix, 2013, Synopsis).

By not needing to maintain a high profit margin on the fooditems, this has allowed the supercenters to keep their food prices down in comparison with mosttraditional supermarkets.The recession, which started in 2008, has helped drive the need for private-label products,or as they are more commonly called, store brand products. These private-label productsgenerally cost the consumers about twenty-five percent less than the major national brands thatare offered. Throughout the supermarkets and other types of food retailers, the private-labelsales grew by more than 9% from 2008 to 2009, and these types of private-label sales accountedfor about 35% of Kroger’s overall sales. Most stores do not operate their own processing plantsfor these private-label items; Kroger does however operate their own plants for the private-labelproducts.

Aaker (1996) states brand is a product, an organization, and a symbol. This is where individuals differentiate themselves and stand out by having a unique value. A personal brand is the actual perception of others. When a person creates a personal brand, then they will stand out easily.

Brand competitors and the diversity of choice that is available to consumers, puts brands under pressure to offer high quality products and service, excellent value and a wide availability (Clifton et al., 2009). Brands must differentiate themselves from the competition and create an unforgettable impression.

Private label revolution: McCormick has been working with Wal-Mart for several years. Currently, Wal-Mart accounts for 11% of McCormick’s yearly sales. While selling McCormick’s label products, Wal-Mart always wants to try selling its own label with McCormick’s solution. If Wal-Mart successfully attract its customers’ preference over its strong brand image and launches its own private label products, McCormick will be losing sales, potentially at $680 million per year level.

The industry within which Hansson Private Label exists is a very competitive and volatile one. It is dominated by two types of firms, namely, Branded and Private Labels. Tucker Hansson operates as a private label firm. Private Label firms are an emerging market which is competitive based on its ability to have a lower price than its rivals. This market has experienced growth primarily because of this affordability. However this growth would be regarded as organic.

Most companies do not aspire to label their products because they fear losing clientele (Donsky). However, the companies should understand that it is not their call to dictate if they want to label their foods or not because their customers have a right to know what their foods contain. Companies should not fear losing clientele because if they really cared about their consumers, they would label their products that use genetic engineering, and depending on their client’s responses, they can either alter their products to use less genetic modification or use none at all. It has also been found that labeling foods will be costly (Steinhauer and Strom), but the cost of people's health is more important than wasting more money for labeling. If companies really cared about their consumers then they would be more careful of their wishes towards genetic engineering. If companies were to label their products, like Campbell, then more and more companies will also label and eventually labeling will become common. When Campbell decided to label their products they thought of the people because “92 percent of consumers” want their food labeled, and they believe that people have a “right to know what's in their foods” (Kratochwill). Campbell, however, did not remove the genetically modified ingredients from their products (Kratochwill) but has still kept most of their customers even after they decided to label their

The Big 3 had high advertising to sales ratios of 10-14%, also deterring entry, because average first year advertising cost for a new brand was over $20 million. We can conclude that total costs related to producing private label products are lower than new branded products. Private label products can offer greater margins to grocers and still sell at lower prices. They have a considerable competitive cost advantage over the new branded products.

If you have a unique product concept, odds are you will experience considerable difficulties thinking that its accessible for the private mark. Hence, organizations commonly utilize Private name supplements no Minimum for essential vitamins and supplements. When beginning another vitamin organization or supplement business, individual marked items are an extraordinary approach to manufacture a multi-item mark. Essentially all shopper items can be fabricated under this sort of course of action, from single mark supplements, private name beauty care products to own name sustenances; the rundown is unending. The principle thought behind private assembling is to give an ease different option to standard items. The reason may likewise be to profit to buyers a current item in an alternate shape. A good example of the latter is a private label vitamin supplement in liquid form as an alternative to solid vitamin pills.