Private label
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Private label products or services are typically those manufactured or provided by one company for offer under another company's brand. Private label goods and services are available in all industries from food to cosmetics to web hosting and are often positioned as lower cost alternatives to regional, national or international brands. Since the branding of private label consumer goods is often provided by the retailer, store brands are sometimes called private label brands.
There are different kinds of private labels which can be categorized the following way:
- Store brands - The retailers name is very evident on the packaging
- Store Sub-brands - Products where the retailers name is low-key on the packaging.
- Umbrella branding - A generic brand independent from the name of the retailers name. Umbrella brands are used in different product categories.
- Individual brands - Name used in one category, this is only used to promote a ‘real’ discount product line.
- Exclusive brands - Again a name used in one category, but to promote ‘added value’ products within the category.
There has been a significant increase of private label brands in the recent years. In Europe, private labels now account for about 45% of products sold in supermarkets, compared to 25% in the USA. Walmart for instance has a 40% private label representation in their stores.
Generally, private labels has been seen as low-priced, low-quality products. However, in the UK, Sainsbury’s wines and Marks & Spencer sandwiches prove the contrary, and many believe high-quality private labels will increase their presence.