Private Labels have transformed from value purchases into powerful brands. This paper develops a framework based on the four strategic dimensions of brand breadth, positioning, segmentation, and relationship with the store brand that retailers can uniquely draw upon to organise their brand portfolios. It examines the case of German retailer Rewe that successfully organises its private label portfolio along these dimensions. This paper argues that maintaining multi-tiered and multi-segmented private label portfolios can be important tools for retailers enabling them to cover broader markets, fulfil current consumer needs, build brand equity, and strengthen customer loyalty.
DOCUMENT
Brand portfolio strategies are an essential prerequisite for securing long-term success for multi-brand companies. Only by focusing on the entire portfolio can it be ensured that all brands “act in concert” to achieve superordinate objectives. Thereby, an increasing vertical competition caused by private labels calls for a new approach, by which brand manufacturers integrate private labels into their portfolio management. This paper presents a planning model that is embedded in the company’s strategic management and demonstrates how brand-related objectives/strategies can be linked with superordinated objectives/strategies. By including vertical marketing goals into portfolio strategy, brand manufacturers may gain from extending the planning scope to private label brands.
LINK
The aim of this paper is to investigate which portfolio extension option: either a cheaper subbrand or a private label endorsed by the national brand is better from the consumer perspective. Two hypothetical product concepts from a leading beer brand were tested among Dutch consumers. The findings show that consumers are equally likely to try the options and form a positive or negative opinion about the manufacturer after the extension. However, when looking at the ability for a brand to cover a price conscious segment and thereforeincrease penetration, the cheaper national sub-brand performs better. Given that the manufacturer will be not restricted in distribution of such a brand, our findings are in favour of a cheaper sub-brand rather than an endorsed private label.
DOCUMENT