Private label merchandises have become a planetary tendency and have shown increasing involvement from the industry position, but besides from the faculty members as good. These merchandises have gained a ample portion of the international food market market and farther growing is expected for the hereafter ( Ailawadi et al, 2008 ) .
Aim and aims
This research undertaking aims in placing the factors that influence the determinations of the Greek nutrient industries to vie or non in the private label market. The analysis of the basic aim reveals a secondary point, whose involvement worth farther research. Over the last decennaries, in many industries the focal point on national trade names is misplaced and private labels are going a dominant figure ( Aaker,1991 ) . Throughout the last 15 old ages the planetary private label market has been in a period of flower ( PLMA, 2010 ) Nevertheless, several companies from the nutrient sector have decided to obtain from this market. So the inquiry that arises here is ; what selling schemes are followed by these companies to do their ain merchandises more attractive compared to the private label. The reply to the latter inquiry will be the secondary aim of this undertaking.
Outline of the Dissertation
The survey is presented in six chapters. The introductory chapter, except from the chief presentation of the undertaking aims, provides a wide definition of private label merchandises from different attacks concentrating on the most suited for this survey, along with the presentation of recent informations on the International and Greek private label market. The 2nd chapter contains the literature reappraisal of the undertaking, where it is presented an overview of modern-day articles and surveies written approximately private label merchandises explicating the grounds of their being, the selling schemes used by retail merchants in order to ware these merchandises and the strategic chances for industries of branded merchandises. The 3rd chapter focuses on the methodological analysis of the research where it is described the features of the population, the method of sample choice and the questionnaires that are traveling to be used on the interviews. The forth chapter contains all the relevant information gained from the interviews, while the fifth, will utilize the findings of the interviews in entire to do a comprehensive presentation of the factors that influence the companies ‘ determination to vie or remain out of the private label market. Furthermore it is besides presented the selling schemes undertaken by the companies which choose non to bring forth private label merchandises. Finally, chapter six concludes the research undertaking by accepting the restriction of the survey and provides a proposal for farther research on private label merchandises.
Definition
In international literature, private label merchandises are frequently referred as “ ain labels ” , “ shop labels ” , “ shop trade names ” , “ retail merchant ‘s trade names ” , “ house trade name ” etc. In this undertaking, it is preferred the usage of the term “ private label ” for it is the most frequent presented, but besides because these sort of merchandises are more normally known as such in the planetary market.
It is besides noticed that there is a great assortment on how international news media and literature defines the term “ private label ” . Harmonizing to American Marketing Association ( 2010 ) this type of merchandises are defined as merchandises that are owned by the merchandise ‘s reseller instead than by its maker and in rare cases, the reseller may be the maker every bit good. This definition seems really wide because there are companies that through undertaking out their concern maps, as outsourcing, grant to bring forth their merchandises through a 3rd party. Some illustrations of this type of companies could be IBM, Microsoft, Oracle and Hewlett-Packard ( BizBrim, 2010 ) , which do non bring forth any or portion of their merchandises transporting their name. In any instance, any merchandise from the above mentioned companies can non be characterized as private label, at least with the wide significance that it is being used.
ACNielsen gives a different attack saying that private label merchandises “ belong to a retail merchant of jobber who has full control of their distribution channels ” ( Laaksonen, 1994 ) , while the Private Label Manufacturers Association ( PLMA, 2010 ) along with Kotler and Armstrong ( 1996 ) , extend the definition back uping that “ the class of private label includes all merchandises that carry the name of the retail merchant ” . Furthermore PLMA continues that the merchandise ‘s name could be taken after the name of the retail merchant or a specific name created entirely for the retail merchant. The latter two definitions seem to be rather closer to loosely recognized term than the one of American Marketing Association ; nevertheless they can non be implemented on this survey due to the deficiency of specifying all the types of merchandises that could be characterized as private label.
The definition that suits best in modern times was given by Dhar and Hoch ( 1997 ) which states that “ hive away trade names are the lone trade name for which the retail merchant must take on all duty – from the development, sourcing and warehousing to selling and selling ”
This definition allows us to incorporate in our attack another two classs of private label merchandises, the ‘white-label ‘ merchandises, which do non hold a trade name name and the ‘licensed ‘ merchandises that bear a name which has been licensed over a fee from another company which has in its portfolio a strong trade name name. The term private label does non help in understanding why the above merchandises belong in this class, because in the instance of white-label merchandises, there is no trade name name and in this of accredited merchandises, it is non owned by the retail merchant. However, if the attack of Dhar and Hock is followed, it is realized that, for the retail merchant, the merchandises have the same characteristics with the remainder of the merchandises which are included within the private label class, due to “ retailer ‘s duty for selling ” . Therefore, there should be included in the analysis.
General Data
International Private Label Market
The history of private label merchandises goes back a long manner. Retail co-operative societies pioneered ain label during the nineteenth century. About a century ago, one of Britain ‘s major retail merchants, Sainsbury began puting up its ain farms and food-processing workss to guarantee quality and value for its clients every bit good as higher net incomes ( Reid, 1995 ) .
“ Major supermarkets, drug ironss and mass merchants today offer consumers as shop trade names about any merchandise that is manufactured and distributed. These include full lines of fresh, frozen and refrigerated nutrient, canned and dry nutrients, bites, cultural fortes, pet nutrients, wellness and beauty attention, nonprescription drugs, cosmetics, family and wash merchandises, lawn and garden chemicals, pigments, hardware, car aftercare, letter paper, and house wares. ” ( PLMA, 2006 )
In the last two old ages, shoppers across the universe have experienced a hard period due to the planetary recession. However, in the recent old ages, private label merchandises have shown a developed a powerful dynamic in the international market. Harmonizing to PLMA, ( 2010 ) private label ‘s path record predates the recession and undertakings beyond it every bit good. Over the past five old ages, the one-year private label gross revenues have increased by 34 % in the supermarkets and over a three twelvemonth period have increased by 14 % in all retail mercantile establishments of the US market. In Europe, harmonizing to PLMA ‘s 2010 International Yearbook study, private label has “ reached record portions as retail merchants rely more than of all time on their ain trade names to offer to shoppers ” . Switzerland remained the overall leader with 53 % market portion, followed by United Kingdom at 47 % . Other states like Spain, Germany, Slovakia and Austria reached the degree of 40 % market portion. In Scandinavia, private label portion stands at over 25 % for the first clip. The biggest additions were posted in Spain and in Turkey, which both advanced more than 3 % in an one-year rate ( PLMA, 2010 ) . In Asia, although private label merchandises have non penetrated every bit much as the remainder of the universe, harmonizing to ACNielsen ( 2005 ) , the market portion reaches to 18 % with a uninterrupted and changeless growing.
The term “ private label ” creates a assortment of significances in the conscious of the consumer. In the most recent old ages private label merchandises were chiefly used to run into the demands of households with a low income, while in some parts of the universe, the traditional perceptual experience of private label were one time of low quality, unbranded options, pulling the most cost-consciousness consumers ( Boutsouki et al, 2008 ) . In the 1990s the quality of private label merchandises was bit by bit bettering and the gross revenues figures ceased to be round, it is now independent from the path of the economic system. Therefore, private label merchandises have widened the scopes of the purchasers ( Boston Consulting Group, 2003 ) .
Up to today, there has non been clarified the boundary lines of private label, intending that in which merchandise classs can perforate successfully and to what widen can increase the sizes of the classs in which it is already in. Yet, under these fortunes, we should non presume that this frenetic race of private label merchandises increased gross revenues will go on everlastingly. Surely, whatever the restrictions of private label, it will certainly go on for some old ages more. Furthermore private label merchandises will profit more from the present planetary economic downswing and the consumers ‘ uncertainness it generates, as these goods are seen to offer better value for money than branded equivalents ( Euromonitor International, 2008 ) . Finally, a study of Boston Consulting Group ( 2003 ) shown that two out of three US consumers consider private label merchandises every bit good as branded merchandises. That shows that the bias about private labels ‘ low quality is now near to obliteration.
Grecian private label market
After a years-long battle to derive foothold, private label merchandises in Greece have gained the assurance for growing. In the Grecian market, private label merchandises were chiefly launched aiming the low income categories and it was the supermarket concatenation ‘Marinopoulos ‘ ( who subsequently was taken over by Carrefour ) at the 1980s that brought to the market merchandises bearing its name. Although the initial attempt did non look to hold great success, harmonizing to a research of ACNielsen, presently 30 % of the merchandises sold in the Grecian market are private label with an addition of 9.6 % in the first half of 2010 ( Imerisia, 2010 ) .
Basically, to make at these degrees, retail merchants had to significantly better the quality of the offering merchandises. It is noticeable that many supermarket ironss have managed to accomplish quality comparable to the branded merchandises ( Veloutsou et al, 2004 ) . Actually the largest retail merchants in the state have already increased the figure of merchandise codifications that offer seeking to fulfill the demand in all Fieldss. Like several other European states, private label growing is being to a great extent impacted by the economic system ( Times & A ; Trends, 2009 ) . The market leader in retail, ‘Carrefour-Marinopoulos ‘ has over 2,000 private label merchandises, including 600 organic. Another major retail merchant ‘s gross revenues, ‘AB Vasilopoulos ‘ , have risen to 17 % this twelvemonth, comparing to 13.2 % on September 2008. ‘Metro ‘ estimations that it one-year private label gross revenues will make the degree of 25 % within the following two old ages from 9.3 % which is today. Other retail merchants such as ‘Spar-Veropoulos ‘ and ‘Sklavenitis ‘ seem to portion the same degrees of additions on these merchandises and seem to follow the same scheme as the leaders ( Imerisia, 2010 ) .
In the yesteryear, there were some researches claimed that the consumers ‘ bend to private label merchandises will maturate shortly, nevertheless, harmonizing to the above mentioned consequences, it seems that this clip has non come yet. Furthermore, now-a-days researches shows one time shoppers move to private label, they tend non migrate back to branded merchandises. Brand makers that help shoppers warrant continued disbursement on the trade names they prefer, while authorising them to salvage money with private label merchandises where it do sense, are the makers that will retain shopper trueness over the long draw ( Times & A ; Trends, 2009 ) .
Boundary lines of range
This research is conducted in a aggressive market place, in footings of private label merchandises, as the Grecian market and present findings from specific companies in the nutrient industry. It is non intended that the consequences will be applicable to other private label markets. Furthermore, there is a possibility that the findings will differ in other states ‘ markets due to fluctuations in the macroeconomic environment. Finally, the choice of the companies presented in this survey, are performed to analyze the behaviour and the selling schemes follow in an intense and competitory market place. Therefore, the findings may non stand for a general regulation for all related companies.
Drumhead
This chapter outlines the foundation of this undertaking. It is presented a brief background of the wide field of survey including the definition, some relevant informations about the international and Grecian market and the restrictions of this survey. On this footing, the undertaking will continue with a thorough scrutiny of the related literature on private label merchandises and the grounds of their being.
Literature reappraisal
Introduction
The fast growth importance and engagement of branded goods to both makers and retail merchants has driven
Reasons why private label merchandises exist
The aim of this literature reappraisal is to explicate the grounds of private labels ‘ being. This purpose will be implemented by analysing the penchants and consumers ‘ behaviour, followed by the contemplation of the benefits of production and selling that are gain by the retail merchants and makers.
Consumers ‘ penchants
As it is mentioned in the first chapter, private label merchandises ‘ demand has been quickly increased at the beggary of the old decennary. Reasons for this rapid addition could be justified by either the betterment of the merchandises ‘ quality or by the rise of consumers ‘ consciousness of these merchandises. In order to reply the above issues there is a demand to analyze the elements of consumer ‘s behaviour which impact positively or negatively his purchase purposes. There are several articles and surveies in the planetary literature refering this issue that can help in analysing and specify it.
In his article, “ Determinants of shop trade name pick: a behavioural analysis ” , Baltas ( 1997 ) presents a theoretical account that predicts the possibility of buying a private label merchandise, depending on the penchants of the purchaser and on the characteristics of the sector it belongs and is focused on attitudinal and behavioural features. This theoretical account is based on interviews of 750 British consumers and can foretell, in 80 % of the instances, if the consumer is a possible private label purchaser of a often bought point that is typically consumed every twenty-four hours. The theoretical account is framed by 13 independent variables used fell into four chief types: the forms of shopping behaviour, the grounds for purchasing shop trade names, the indexs of consumer relationship with shop merchandises, and the consumer ‘s engagement with the class. The model is based on findings in related research countries and serves an integrative function. The above mentioned variables are categorized below:
Shoping behaviour
aˆ? Decide about the trade name before get to the store
aˆ? Look for monetary value publicities
aˆ? Go for the cheapest trade name
aˆ? Buy the same trade names
aˆ? Try new/different things
Reasons for purchasing private labels
aˆ? Lower monetary value
aˆ? Higher penchant
Store trade names relationship
aˆ? Familiarity with shop trade names
aˆ? Proximity between consumer and trade name personality
Category engagement
aˆ? Importance of acquiring the right trade name
aˆ? Number of trade names tested
aˆ? Frequency of shopping class
aˆ? Satisfaction with available trade names
The consequences of Balta ‘s study showed much utile information about the purchasers ‘ penchants, wonts and relationship with private label merchandises. Sing consumer ‘s behaviour, it is observed that private label purchasers ‘ seek a lower monetary value, but they do non care so much about the particular offers. This is easy explained by the fact that these specific goods offer low monetary values on a day-to-day footing and non on seasonal offers, which is the chief feature of branded goods. Further, private label purchasers do non look loyal to a specific name of merchandise and has non decided which 1 he will purchase before he gets to the shop.
With respect to the ground for purchasing private label merchandises, consumers are extremely interested in monetary value and quality of the merchandise. At this point, it is of import to underscore that frequently there is the feeling that purchasers who are really much interested on the monetary value and well less on quality. What is concluded from the research is that consumers are interested in the value that the merchandise gives, intending the ratio price-quality.
In the portion of shop trade name relationship, the survey shows that the grade of propinquity between consumer and trade name personality positively affects his purchase attitude. There is besides a important function in purchaser ‘s acquaintance with the merchandise as it reduces that perceived hazard. Harmonizing to Baltas, the opportunities of a possible purchase are addition as client ‘s certainty raises that the merchandise would be of nice quality.
Finally, in respects to purchaser ‘s category engagement, Baltas references that the greater the engagement the consumer has with the class of merchandises, the lupus erythematosus is the opportunities he will buy a private label merchandise. He reaches to this decision by explicating that, the Importance of acquiring the right trade name ( factor A ) and the figure of trade names tried ( factor B ) are negatively correlated with the purchase of a private label merchandise. This point needs to be analyzed for two grounds foremost, because the survey argues that consumer ‘s high engagement increases the likeliness of buying a private label merchandise and secondly, because the other two factors that affect purchaser ‘s engagement ( frequence of shopping class and satisfaction with available trade names ) has positive relation. Therefore, the overall degree of relationship engagement and private label market is marginally negative.
It worths adverting that in a most recent study conducted by Baltas and Doyle ( 1998 ) a twelvemonth subsequently, following the same methodological analysis, showed once more the a positive relationship between the frequence of shopping class and the volume of gross revenues of private labels. In this instance, the writers commented that the consumers who buy several merchandises in a class have more cognition than occasional purchasers and hence are more likely to understand the value added.
Manufacturers may elect to bring forth own-label merchandises for retail merchants in order to accomplish scale economic systems in production and distribution, use of extra capacity, gross revenues addition without marketing cost, every bit good as monetary value favoritism because of image distinction between branded and private-label merchandises. Baltas