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National Branding Essay

931 words - 4 pages

National Branding vs. Private Label Branding
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National brands typically have a better value for the consumers compared to a private label brand, because national brands generally sell far more than private label brands. In all probabilities, consumers believe that the national brands are typically of higher quality. Whether this belief is factual or not is irrelevant to the outcome in the market, as long as consumers believe it. There is very small difference in quality between some national brands and private brands, yet consumers pay more for the national brands. Usually, it is hard to know, without the aid of chemical analysis or other forms of tests, whether private brands match ...view middle of the document...

Store-brand customers are typically well-informed people, who pay attention to the labels. The Gallup Poll also showed that many consumers make an effort to study the labels and prices. The Poll indicated that 40% of shoppers are selective: this means that they compare products on different dimensions considering the quality, price and special offers; hence they do not automatically choose the national brand. Most national-brand products are known to be of a superior quality; therefore, they are usually sold for significantly higher prices than private labels. In June 1984, the Private Label Manufacturing Association conducted independent research where they compiled a "Market Basket List" for 17 staple items. Private labels’ total cost was found to be lower compared to national brands. It was found that private label shoppers generally pay less as compared to national brand shoppers. Private-label strength is highly susceptible to economic conditions and will vary depending on this factor. This means that private label market shares go up when the economy is weak and they go down when the economy is strong (Mennen 23).
The main reason for the existence of brand names is because consumers usually need to be sure of quality when they lack the time, opportunity, or ability to examine other options.
Brand names simplify the selection process, since consumers become confused when offered too many options. A survey by DDB Needham conducted in 1994 indicates that 60% of consumers prefer factors pertaining to national brands, for example, security, value and comfort, as opposed to private label brands. National brand-name goods have a better competitive advantage over private labels, due to their solid reputation. They have a running start. The strongest national brands have been in existence for decades and have consistent quality. National brands have value for...

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