Brand is what makes a consumer identify and differentiate a certain product or services in the market. Hence, branding helps a business stand out in the market. Therefore, it’s essential for business owners to strive to create a brand that has value to the consumers. This value should be able to address consumer’s needs and prospects in life. The consumers have pride of being associated with product and services the company offers due to the brand the company has created. The result of this will be reflected on the company’s sales and revenues generated.
David Harding., & John Quelch. (2014). Brands Versus Private Labels: Fighting to Win.
According to this article consumers, look for assurance of quality in a product or services since they don’t have the expertise and the time to expect the goods and services that are in the market (David et al., 2014) Therefore, having a trusted brand simplifies the selection process. Thus, the consumer the value, assurance and the comfort of the consumers has been the focus the nationals firms and they make sure the consumer get them. According to the author the national company have spend decades to create quality products and have invested heavily on the advertising since their inception. The nationals’ brands have created a strong supply network hence the consumers have seen the brand as a reliable source for the goods and services they need. Additionally, the retailers promote the national brand unknowingly by stocking their stores with national brand since they don’t wish to lose customers who are loyal to national brands (David et al., 2014). Thus, by stocking their stores with national brands all the time, consumers develop trust on the national good since they know they can always find them on the shelves.
Nenycz‐Thiel, M., & Romaniuk, J. (2014). The real difference between consumers' perceptions of private labels and national brands. Journal of Consumer Behaviour.
The private entities have made a significant impact on the market in the recent decades. However, the national brands still hold the large percentage of the market share. According to this article, the national brands over the years have done aggressive promotions of their products in the market than the private entities. Thus, these promotions have psychological effects on the consumers’ memory (Nenycz‐Thiel et al., 2014) The consumers have a high knowledge off the national products than the knowledge they have on the private goods. It is this knowledge and created 'memory' over the years that has made consumers buy the product from national companies than the private companies. Therefore, the consumers buy the product from the national brand mainly because they have information about the product and what they stand to benefit from the product. The private products are mainly considered as ‘new product’ in the market the consumers have little knowledge about them. Hence, it’s a risk to consume these products and the consumers are not ready to take that risk.
Erdem, T., & Chang, S. R. (2012). A cross-category and cross-country analysis of umbrella branding for national and store brands. Journal of the Academy of Marketing Science, 40(1), 86-101.
According to this article, the consumers are always a concern with quality of the product they are using. This is because they do not want to put their lives on risk. The consumers are also sensitive about the price of the product they are using (Erdem et al., 2012). Therefore, information touching on the quality, the price and where they can get the product is very essential. Therefore, the consumers who are interested in the product conduct research on the product so that they can assess its quality. Unfortunately, research that has been done on the product from the private companies is little. Hence, the consumer cannot get valuable information to assess the quality of the products from private companies. In addition, there is no information on where they can get the products and at what price. On the other, hand. There are a wide information and research on the product from the national products (Erdem et al., 2012). Thus, the consumers choose to buy the national product since they can assess the quality of the product.
Volpe, R. (2011). The Relationship Between National Brand and Private Label Food Products Prices, Promotions, Recessions, and Recoveries
According to this article, the market has experienced the growth of the private firms in the country. The private firms have concentrated their strategy and efforts of penetrating the market on price strategy. However, they have ignored to inform the consumers the quality and what they stand to gain by using their product. As such, the market has experienced a decrease of the price on most of the commodities in the recent past (Volpe, 2011). On the other hand, the national brands have been concentrating their effort and resources on the creating a reputation for their product through various promotion and adverts. This has created awareness of the quality of the product and what the consumers chance to gain by consuming the products from the national companies. Therefore, when the consumers go the retail shops and supermarket, and they find that there is a huge price gap between the national product and private product, (i.e., the private products are cheaper than the national product). They perceived the private products are of low quality thus is why they are cheap (Volpe, 2011). Nevertheless, if the prices are the same, the consumers choose the national product based on the information and familiarities they have on the two products.
Pepe, M. S., Abratt, R., & Dion, P. (2011). The impact of private label brands on customer loyalty and product category profitability. Journal of product & Brand management, 20(1), 27-36.
Products from the private firms for a long time have been found from the selected stores in the country. This creates a short supply in the market. On the other hand, the products from the national companies can be found anywhere in the country. As such, the consumers don’t have to struggle in finding the product from the national companies. Thus, this reliability and availability of products from the national companies creates a consumer’s loyalty (Pepe et al., 2011). Additionally, the private stores concentrate on the price wars rather than the quality of the product they push to the market. Although, the private entities have embarked on a mission to improve the quality and win over consumer's loyalty, their effect is yet to be felt in the market. The private firms’ initial strategy was base on the price and maximization of profits, this created a short relationship with the consumers. The consumers bought the products when price favored them. When the price change they shift to other products that had better prices. On the other hand, the prices of national firms’ product have remained relatively over the years the same. This creates loyal consumers and long term relationship (Pepe et al., 2011).
References
David Harding., & John Quelch. (2014). Brands Versus Private Labels: Fighting to Win. Retrieved from http://hbr.org/1996/01/brands-versus-private-labels-fighting-to-win
Erdem, T., & Chang, S. R. (2012). A cross-category and cross-country analysis of umbrella branding for national and store brands. Journal of the Academy of Marketing Science, 40(1), 86-101.
Nenycz‐Thiel, M., & Romaniuk, J. (2014). The real difference between consumers' perceptions of private labels and national brands. Journal of Consumer Behaviour.
Pepe, M. S., Abratt, R., & Dion, P. (2011). The impact of private label brands on customer loyalty and product category profitability. Journal of product & Brand management, 20(1), 27-36.
Volpe, R. (2011). The Relationship Between National Brand and Private Label Food Products Prices, Promotions, Recessions, and Recoveries. Retrieved from http://www.ers.usda.gov/media/187072/err129_1_.pdf
