Introduction
The four categories of private brands include premium, generic, copycat, and exclusive brands. Premium brands are characterized by added value on products and increased sales at the expense of image. Moreover, the quality of a premium brand product is also considered to be an order of magnitude higher than that of other brands. One example of such a category is The Body Shop, whose products are known for their high quality, uniqueness, and above-average prices.
Premium products are most often located in a favorable place on the shelves (Shroff et al., 2021). Thus, The Body Shop products are often located in the most prominent places in the store. Under the category of generic private brands, products such as soaps, shampoos, or various bakery products without a specific brand name fall. The specifics of this category are the lowest prices for goods, and the objectives are to maximize the expansion of the customer base. Also, such products most often enjoy a discount policy that ranges from 20 to 50 percent.
Copycat brands also provide lower prices for their products compared to premium ones. However, the goal of such a brand is to provide competition to other manufacturers and increase the share of retail trade. Copycat brands appear most often among large categories with influential leaders. An example of such a brand is Walgreens, whose prices are not as high as those of the brand leader, but also not as low as those of generic brands. Being a copycat brand, Walgreens ensures that the pricing is affordable for the majority of customers. Exclusive brands provide consumers with the best value and ensure customer loyalty to the store. Moreover, exclusive brands have the best value for money and the uniqueness of their products. As an exclusive brand, IKEA dominates the furniture market, providing products at extremely affordable prices, while maintaining high quality.
Core differences between goods and services
There are four fundamental differences between goods and services, which are that the service is intangible, inseparable, variable, and perishable. Intangible implies the fact that the service cannot be felt in any tactile way. In other words, the consumer cannot touch or taste a service such as a car wash. Also, by attending sessions with a psychotherapist, the consumer receives a service that he cannot tactically feel (Catana, 2019). Thus, the service is something intangible that the consumer feels after seeing the result. For instance, in the case of car washing, the consumer receives clean transport. The fact that the service is inseparable implies that it is provided to the client at the same time that he receives it. For example, the theater provides its services at the same time as the audience is watching a play, opera, or ballet.
The next factor is variability when the consumer has the opportunity to use a particular service based on personal needs. For example, music concerts provide services for fans of a wide variety of genres. Services always vary according to the preferences of customers and consumers, which makes them flexible to different requests. Finally, each service is perishable, since its receipt cannot be postponed to the future. Thus, the rental of a vehicle is concluded on specific dates, on which the consumer must use the service. Moreover, a trip to the cinema can also not be postponed for later, since the services are booked for a certain period when the consumer should receive them.
Distribution intensities
An effective distribution system plays a key role in the work of companies, as it provides a place in the market and profit. Thus, there are three main strategies: intensive, exclusive, and selective (Kabus et al., 2017). Intensive distribution is based on the supply of goods in all possible locations. The best example is the distribution of newspapers, which can be found in every store. With this strategy, the suppliers of newspapers and magazines ensure maximum attention to their products. By placing the product in all possible locations in the most prominent places, consumers are most likely to purchase it.
Another effective distribution system, which allows the companies to gain profit, is an exclusive strategy. The exclusive distribution consists of the provision of goods through a single trade intermediary. Examples of this strategy are various celebrity brands that are sold exclusively in one outlet. This strategy gives the product uniqueness and exclusivity, prompting consumers to specifically search for it. Thus, if a particular line of cosmetics can be found exclusively in one outlet, it will attract more attention. At the same time, consumers will be more likely to believe that this line is unique and has a high level of quality.
Finally, selective distribution is based on allocation through several specific intermediaries. For instance, a consumer has an opportunity to buy a Samsung TV only in certain outlets, such as Walmart and etcetera. This strategy allows Samsung to regulate which outlet distributes its products. With this, the company manages the attention and trust of consumers. Thus, the products are placed only in those outlets that inspire confidence among consumers, which subsequently ensures the purchasing power of consumers.
References
Catana, S. A. (2019). A New Approach To Retail Marketing–Ways Of Services Marketing. SEA–Practical Application of Science, 7(19), 75-77.
Kabus, J., & Nowakowska-Grunt, J. (2017). Managing the company’s distribution system. World Scientific News, 78, 277-283.
Shroff, A., Shah, B. J., & Gajjar, H. (2021). Shelf space allocation game with private brands: a profit-sharing perspective. Journal of Revenue and Pricing Management, 20(2), 116-133.