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Private Labels Competing Against the FMCG Case Study

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Updated: Jun 11th, 2019

Private labels are those goods that are by produced by the retailers such as supermarkets. There are several reasons why this marketing strategy has become very popular. First of all, at the time of economic recession, the purchasing power of many clients has declined. This is why they search for less expensive goods (Lincoln 25).

Therefore, the marketing of private labels can increase the profitability of many retailers that try to become less dependent on manufacturers. Furthermore, consumers notice that in many cases, private labels are not inferior to branded goods in terms of quality. This is one of the main aspects that can be identified. To a great extent, one can speak about a significant shift in public attitude toward such these products.

They are no longer associated with poor quality (Lincoln 25). This is why this marketing strategy has been successfully implemented by many firms. Additionally, it is vital to remember that modern businesses can operate on the Internet. Information technologies enable buyers to compare different products in terms of price and quality. In many cases, these people prefer to purchase private labels.

These are the main reasons that can explain the popularity of these products among retailers as well as consumers in Europe or the United States. At present, one cannot say whether the situation will change in the future, especially at the time when the purchasing power of people increases.

Nevertheless, it is quite possible that these labels will not lose their competitive position. Much will depend on the marketing strategies adopted by various producers. This is one of the main arguments that can be put forward.

The manufacturers of branded fast moving consumer goods (FMCGs) adopt various strategies in order to regain their competitive edge at the time when the economy recovers. First of all, they can launch their own stores (Kotler 128). In this way, they can increase the loyalty of consumers.

Furthermore, such an approach can distinguish a certain product among many private labels. This is one of the actions that can be taken. Nevertheless, such a policy has significant limitations because it is applicable only to companies that produce various brands. This is one of the main issues that should be considered by the managers of these companies.

Furthermore, these businesses can carry out marketing campaigns that stress the quality of branded goods. This strategy is also helpful for attracting clients. However, the main issue is that many consumers have changed their attitudes toward private labels and FMCG.

Many clients are no longer convinced that branded FMCGs are superior to private labels (Lincoln 25). Therefore, the producers of FMCGs should introduce innovative products that can be distinguished in terms of functionality, design, reliability, or other criteria. So, they will need to create additional value for customers. This is one of the ways in which they can strengthen their position in the market.

Finally, these companies may decide to cooperate with retailers. It should be kept in mind that some producers provide goods to retailers and later these products are sold as private labels (Lincoln 25). Such a strategy can help these businesses improve their sustainability. These are some of the policies that FMCG managers can adopt in order to improve their long-term performance.

Works Cited

Kotler, Phillip. A Framework for Marketing Management, New York: Prentice Hall, 2011. Print.

Lincoln, Keith. Private Label: Turning the Retail Brand Threat into Your Biggest Opportunity, New York: Kogan Page Publishers, 2009. Print.

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IvyPanda. "Private Labels Competing Against the FMCG." June 11, 2019. https://ivypanda.com/essays/private-labels-competing-against-the-fmcg/.

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IvyPanda. 2019. "Private Labels Competing Against the FMCG." June 11, 2019. https://ivypanda.com/essays/private-labels-competing-against-the-fmcg/.

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