Question

Diffrence between national and private brand

Answer 1

my thoughts on the differences between Private Label and National Brands. This prompted the thought of how are we defining the two.
National Brands, by definition, have national distribution systems, national advertising campaigns and are typically manufacturered by branded companies. This is a non confrontational explaination we can all get our heads around. Many Private Label brands also have national distribution systems and advertising as well. Take SafeWay’s Select Brand and Costco’s Kirkland Signature as examples.
Many of these store brands are equal to and in some instances better than their competitive national brands in quality and consumer preference. Although many branded manufacturers would not like to admit this, the lines between Private Label and National Brands in many categories is starting to blur based on quality and consumer acceptance.
A recent Planet Retail article did an excellent job summarizing share and penetration data on this topic. The US is underdeveloped in private label penetration and share development in it’s largest retailers. At Kroger, private label recently became 35% of total sales which is on par with private label development in the top 5 retailers in Spain, Germany and the Netherlands. This trend is expected to rise as shoppers continue to look for the best value e.g. quality and price during these tough economic times and retailers want to earn increased margins.
I believe private label and national brands can co-exist. Those manufacturers with a deep understanding of the shopper regarding how and why shoppers shop the brands that they do will have competitive advantage. Bringing these shopper insights into your commerical strategies with customers will set brands up for success in 2011 and beyond. When developing these insights, we recommend manufacturers look holistically at the category and not take private label lightly as an after thought.