Private Label Strategy

ELEVEN

Fight Selectively to Marshal Resources Against Private Labels

Germany 1999–2005 share: private labels, up 50 percent; brand leaders, down 8 percent; second brands, down 15 percent; other brands, down 30 percent

WITH THEIR ACTIVE private label programs, retailers today are explicit about which manufacturer brands they see as adding value. Manufacturers with new innovative products are important to retailers because they ensure that retailers’ shelves are stocked with the most attractive and high-margin products. For the rest, they have their own private labels. Therefore, retailers wish to deal only with those manufacturer brands that have a capability for successful product innovation and are able to command a price premium in the category. ...