Manufacturing is a core part of
business and quality starts from this function. Product quality is a key
competitive advantage for the most companies. For this purpose, organization
are using many standards to insure quality on every step. Not every company is
able to manufacture its product by itself. For compensating this subject,
companies use different methods i.e. outsourcing manufacture department, joint
venture for production or Private Branding. Private Branding,
also discussed to as Private Labeling, is the process in which company labels
products under a company own brand name that doesn’t actually manufacture the
products. Many industries are now using this technique. Large retail stores as well as small businesses now use private branding to increase value for their customers and promote sales and growth. For small retailers and business owners it is fine to know the benefits of using Private Labeling technique.
Retail Joints are Enjoying this Strategy
Many giants retail stores finance in private label products so they can enjoy their own brands without taking risk of actually manufacturing products with quality and standards. You can check by your own the websites of multinational retail stores, Walmart and Metro Cash & Carry. Number of products are available under their own brand names. Metro is offering office solutions under its own brand name SIGMA. Under the brand name “Hi-Line” Metro Cash & Carry offers all guest solution for hotels, restaurants and hostels. Verity of packed food is available under the brand name of “Fine Food”. One advantage of private branding is, you can brand your products with your selected features and characteristics. By private branding, you can control price and quality over your competitors. Metro Cash & Carry is enjoying same advantage.Different Studies about Private Branding
- Above 60 percent of consumers accept that private brands offer better value than national & recognized brands.
- Above 46 percent agree that they often cannot recognize the difference between private and national or established brands.
- More than 48 percent agree that they mostly prefer private brands over national brands.
- More than 39 percent agree that private brands offer more unique qualities and items which makes private brands more motivating than national brands.
NIKE the Perfect Example!
Nike is a good example of private branding. They outsourced their production department and they get manufactured their products from the host country market. Private branding helps Nike to keep focus on marketing and distribution system. Other common examples are seen in the clothing industry. Local brands like Fore-Cast, Explore, G-Star Raw and many other are using the same technique. Private Branding helps company to relax from production side and keep interest in marketing and distribution side.
Difficult to stand up your Brand? Read Article: Credible Branding: The Base of a Business’s Success!
Manufacturing is quite
difficult task to perform in smooth ways. For producing quality products, you
need quality raw materials, machinery and experts to manufacture goods but
private branding supports you to ignore all above situations and focus on just
selling the products. Different companies are operating in the market who
perform manufacturing tasks on behalf of others. Private Branding, mostly uses
for generic brands. Low budget consumers prefer generic brands because of limited
budget. Retailers with their private own brands can fit products to their local
customer’s needs and will even have an opinion from customer’s side. Got any questions? Or maybe, have something to add? Please leave a comment below and tell us what you're thinking. Cheers :)