A: Why do you think retailers carry brandname items alongside their own inhouse

Question

A: Why do you think retailers carry brandname items alongside their own inhouse brands? From your own experience, are the national brands always worth the additional cost? Why or why not? B: Many retailers are tapping into what is called “Millennial pragmatism,” which addresses how consumers in this demographic group demand to know more about what a brand stands for beyond its bottom line. How are retailers appealing to Millennials with products, imagery, and appeals of a privatelabel brand without the higher price tag? (Contemporary Business Chapter 13.1)

Explanation / Answer

A

Retailers are now seen to have come up with their own brands in the segments where well known brands are already have great market. This is because the retailer are now using backward integration. They have good reach to the consumers and they charge to national brands for the same reach. Thus it adds to the product cost to consumers. Retailers then starts its own brand for the same products but saves the margins and thus is able to provide the product at very minimal cost which attracts most of the consumers all the time.

B

Now Millennial are the groups born between 1980 to 2000s and pragmatism is that one will take choice without any ideology to be followed and only based on practicality. Now these pragmatism is the key for retailers as many of the customer with such attitude only look for the price but consider it as same quality of national brand. They are more price concious then brand and this is how the retailer are showcasing their products without higher price tag. The consumers have been customer of the particular retailer and believes in it and if offered products are cheaper they will not even think twice before its over.

Retailer have their own shelf space for which they charge other brands but for self branding it does not need any charge and thus saves huge cost and can push the product according to demographic locations and tracked behaviour of the customer for the purchase. This way based on analysis and need they are able to deliver the product to customer without higher prices.

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