One controversial move by some marketers of major brands is to supply private la

Question

One controversial move by some marketers of major brands is to supply private label makers. For example, Ralston-Purina, Borden, ConAgra, and Heinz have all admitted to supplying products—sometimes lower in quality—to be used for private labels. Other marketers, however, criticize this “if you can’t beat them, join them” strategy, maintaining that these actions, if revealed, may create confusion or even reinforce a perception by consumers that all brands in a category are essentially the same.

Write a one-pager explaining your analysis of the Private Label dilemma. Incorporate specific marketing terminologies from the text in your responses and include at least 2 cited references.

Explanation / Answer

Private label dilemma is one of the most prominent factors that are influencing the current marketing industry. As availability of opportunities for a smaller brands are increasing the overall level of influential capabilities are also increasing for these specific brands. Add an availability at a positive scale these brands are highly influential in terms of providing similar quality or they ride along with the bigger brands to create a strong brand identity by supporting them.

This is specific private labels create market opportunities by using two strategies.

As an opportunity
As a threat

As an opportunity

Private labels directly assign themselves as a brand which directly goes along with the well setup brands and provide their services with combination presenting with the specific bigger brands. This type of approach does not only increase their adaptability but also increases the chances of business operations in the respective environment. This type of approach provide adequate support to their business operations as it does not hinder the basic business of bigger brands and these bigger brands are also happy to share their products as it is a Win-Win situation for both of the sides.

As a threat

This is specific brand create a negative impact on the overall sales generated by pre existing brand by aligning themselves with similar marketing structure but with a totally different marketing approach. As this brand directly hinder the operational capabilities of well setup brands, this is a threat at small markets as well as become August by using their private label for influencing the customer and providing similar services at a cheaper price.

This is specific type of price differentiation is one of the main reasons why people are shifting to private labels rather then choosing brands for the specific products. According to the market research, people prefer private brands as they carry the same quality and cost less in the specific operative region hens availability of diesel specific brand are continuously growing and posing a very strong thread on availability of opportunities for bigger brands to influence the customer in connectivity.

Reference - http://www.centricbrandadvisors.com/brand-vs-private-label-an-fmcg-dilemma/

https://www.allebach.com/alleblog/13-branding/98-private-label-dilemma-or-opportunity

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