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Daniel LohmanCategory Strategic AdvisorDan Lohman is a CPG and Natural and Organic Industry Strategic Advisor. He provides innovative ideas, actionable insights and strategic solutions to the challenges that brands and retailers face. Dan assists retailers and brands in expanding their distribution, growing sales and getting their products on more store shelves and into the hands of more shoppers. His extensive knowledge reaches beyond traditional category management and has earned him recognition throughout the industry as an influencer, expert, speaker, trainer and thought leader. In addition to sharing his 25 years of experience, Dan talks with well-known thought leaders, CEOs, and founders of successful industry companies who candidly share insider secrets
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Over 50% of most private brand portfolios are copy cat private labels
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Private Label Portfolio Development MatrixPrivate labels were once targeted at low-budget shoppers interested in “price first” versions of a product. This is the starting point for the creation of private labels for many retail companies - usually introducing goods perceived as lower quality. Historically, these products were regarded as “generic” and were not associated with the name of the store. In response to increasing competition from discounters, many supermarket chains, such as Aldi and Lidl, have introduced goods to show they have a basket that can compete with discounters. The second step for retailers moving into private label, as a rule, has been to copy the sales leaders in the category - developing so-called “copy cat” products in order to create pressure on national brands. Many retailers stop at this stage, since increasing the share of such private brands can begin to result in the loss in sales and, importantly, a decline in gross margin.
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The Strategic Matrix of Private Label Brand Development framework is a very useful tool as you develop or re-evaluate a portfolio of private brands. With this tool, a retailer can analyze a company’s existing set of private label brands, determine what’s missing in the private label brand portfolio, and strategize what is the optimal balance between private label and manufacturer brands to achieve the goal of increasing customer loyalty and stimulating growth in sales and gross margin.
Practical experience has shown that excessive development of “me too” copy cat products does not enable retailers to successfully compete against manufacturer brands in the long-term; nor does it develop true customer loyalty since it does not create sustainable reasons for repeat store visits. Many retailers are beginning to invest in privately-owned, value-added trademarks associated with the name of the retail chain in order to promote their private label brand products as high value - quality, innovative or having unique characteristics. |
* PL Strategy: How to meet Store Brand Challenge, Nirmalya Kumar and Jan-Benedict Steenkamp
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Is Private Label Good For Natural?Is it more important to have a high penny profit on select items or is it more important to have a long-term business building strategy that brings loyal customers into your store, and keeps them coming back? ...
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Strategies To Maximize TPM ROITrade marketing is typically the single largest line item on a company’s income sheet, but how do you know if your trade marketing is effective?
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Know what retailers REALLY wantEvery brand wants to get their product on store shelves BUT the strategies most brands use today take the retailer relationship for granted..
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