Private Label In Supermarkets

Private label products are a huge success in this era due to its good quality products, with convenient packaging at affordable prices. Private label products are a win-win situation for the retailers, the customers and the manufacturers as well.


The stores and supermarkets love and deeply adore private label products. They use them to create bigger margins because customers demand them more and hence they are sold more. Private label products increase the margins by ten percent because of their demand. They are demanded by the population a lot more than branded products due to the fact that they fulfill all the needs of the customers.


Private label products keep emerging and updating according to the time and needs of the population which plays a big role in the growth of their sales and hence helps in generating bigger margins for the supermarkets.Since, private label products give the retailers the leeway to set the prices and use their own marketing strategies, the retailers use these benefits to to attract more customers by putting these products for sale on discounted prices. Since, everyone is a fan of discounted sales and saving money, the sales of these private label products increases and the supermarkets end up creating bigger margins for themselves. Apart from discounting these private label products, the retailers also have the choice to limit the discounted sales and increase the prices, as new products come into the market. By increasing the prices of their most popular products, the supermarkets earn more money and create bigger margins. Basically, it all comes down to the pricing of products. The leeway and the freedom that private label brands provide to the supermarket retailers in deciding market strategies and fixing the prices, plays a major role in the creation of bigger margins.


When the supermarket retailers are putting a price on their private label products, the closely study the competing branded goods. They decide whether they want to categorize a certain private label product as premium by investing in marketing dollars or if they want to use it as a substitute brand and set its price lower as compared to the other brands. They make this decision on the basis of the demand, popularity and quality of the product.


A retailer’s main goal is to sell those products which the customer demands and private label products fulfill all the needs of the customers. So, supermarkets devise marketing and sale strategies which increase the sales of the products and then initially create a bigger margins for the supermarkets. The supermarkets often put new private label products on discounted sales, and then when the people develop a liking for those products, the supermarket retailers increase their prices and put new private label products on sale instead. Even when the prices increase for these products, the customers still buy them because they have started trusting the quality of those private label products and are ready to pay any price for them, as long as it is reasonable and affordable, which they are.

Another way that supermarkets earn more margin and make bigger margins with private label products is that they do not have to pay a lot to their manufacturers. There are no charges for marketing strategies or any other additional charges, so they end up saving their money. Since, only the retailers and manufacturers know about this or about how much the supermarkets pay for these products, they can also sell these items at a double price and generate more margins.


The supermarkets use all the advantages of the private label products to generate bigger margins.

Private Label Explained....

Private label products or better known as store brands are a source if increasing the margin of the supermarket. They have larger sales due to their demand in the market. Private label products are more in demand because they fulfill the needs of the consumers. A customer or consumer is always looking for a product that is of good quality, comes in a convenient packaging and is within a reasonable price, and private label products fulfill all these needs. In the older times, when people were more into brands, the reason was found that the private label products had cheap and bland packaging but, now the times have changed. Private label products come in a lot better, convenient, innovative and appealing packaging.


The private label brands do not try to blend in with the branded products anymore, they have made their own distinct appearance which never fails to attract the consumers. These store brands are now competing and definitely winning from the branded products, mainly due to their convenient and handsome looking packaging. Yes, discounted prices and quality also plays a major role in the sale of the private label products, but, these are the secondary traits. What is the first thing that catches the consumer’s eye? The answer is convenient and attractive packaging.


A product’s packaging is what makes it appealing, and hence makes the customer buy that product. People now a days a fan of aesthetic looking things. They will literally buy anything that looks good to their eye. Even the most rational people, sometimes, find themselves trusting products based on their packaging. People are not very aware of their emotions when they shop impulsively, but on the other hand the package designers of these private label products are very well aware of the consumer’s mind and their emotions. Keeping these emotions in mind, these product packaging designers, design the packaging by using innovative designs and color psychology to attract their customers.


A study by a journal named Psychology & Marketing, has discovered that when a customer or a buyer sees a product in a packaging that he finds attractive, their brain activity rapidly intensifies and they feel as they are rewarding themselves by getting hands on that product. While on the other hand, when a person sees a product in an attractive packaging, the brain activity remains neutral and connects it with negative emotions. So, from this study we can clearly understand that the innovative packaging matters in staying ahead.


The packaging techniques that are used by the private label products are the most effective in grabbing attention of the buyers. They use the right colors with the help of color psychology, they make sure that their label is written in an attractive manner, it is ensured the packaging material is convenient and of good quality. It does not leak or tear too easily. Any consumer can change their decision based on the quality of the product’s packaging material. The packaging is designed according to the target audience of that product. If the target audience of that product is children of a specific age, then the packaging is designed keeping in mind the things that will attract the attention of a child and if the target audience of that product is an adult, then the packaging will be designed according to the needs of an adult. The design of the packaging also matters on the basis of difference of genders.


Innovative packaging basically adds value to the product, and also tends to meet the other needs of the consumer, like , child-proofing, tamper proofing, easy to open, easy to store, easy to carry, portion control, recyclability, non-breakability, etc.


So, this is how private label products stay ahead of branded products with innovative packaging.

The Success of Aldi and its Private Label Domination

Aldi is a discount grocery store, which is known as the fifth largest supermarket in Britain. It has over ten thousand stores in eighteen countries and has a €50 billion combined turnover which increases as the clock ticks. The aisles and trolleys at Aldi are always filled to a brim.


Selling their products at a discounted price is not the only reason behind Aldi’s huge success. Most of the times, people associate low prices to low quality. In the start, Aldi had to face the criticism and backlash for being cheap, it was said that their products are of poor quality and only people who cannot shop elsewhere, purchase at Aldi’s.But later, Aldi rose to immense and rapid success. Aldi has won numerous awards. In the United Kingdoms, they have won the Supermarket of the year for two consecutive years and then they also wonthe Grocer of the year award as well and a lot more.


Although, selling their products at a cheaper price one of the reasons behind the success of Aldi but it is a minor one, since, a new product at a low price has to prove its worth in front of all the other tested and trusted products. One of the biggest reason behind the success of Aldi is that it narrows its attention and specialises in only one thing and remains devoted to it. Aldi specialises in staples such as food, beverages, sanitary items and other products that are used in households. Aldi mostly sells its own products and only sells a limited number of other brands. This gives them the leeway to decide their own market strategies and prices of various products. This lets them use multiple barcodes on products instead of price tags, which speeds up their checkout process. They sell a total of 1500 lines in comparison to the other supermarkets which keep a stock up to 40,000. This strategy gives them a sense of exclusivity and allows them to concentrate on the efforts of producing the best products and creating the best brands and helps in offering a greater value to their customers as compared to their competitors.


Aldi also does not accept manufacturer’s coupons, so that saves Aldi from unnecessary sales which hinder their business. But they do have special weekly offers in which they sell expensive items like electronics, appliances, tools, computers on discounted prices.


In Germany, Aldi has an unusual policy of not advertising about their sales or their products. They do inform their customers about them through newsletters, direct mail or by printing it in the local newspaper. They have never used external advertising companies and claim it saves money and conveys the necessary information to their customers in a more feasible way.


Aldi’s are known as the magicians of minimalism due to their business style and motto, which is ‘cheaper, simpler and better’. Since, they only specialize in home staples and majorly sell their own brands, they have reduced the power of choice for customers, which saves them from a lot of decision making and unnecessary anxiety. This helps them in leaving the place within minutes which saves a lot of time for the customers. Instead of wasting their precious time with brands and fighting them over prices, Aldi has created its own brands and only does business with other brands for specific products only.


A lot of stores offer a lot to their customers, but Aldi has introduced something very refreshing to the customers by offering them less. This is the main ingredient behind Aldi’s success in creating brands and as long as Aldi follows this minimalistic structure devotedly and obsessively, they will remain successful and might even grow further. All the success that Aldi has earned, is due private label products. These private label products have given Aldi the opportunity and facility to grow by giving a leeway in pricing and marketing strategies. So, if you want your business to be a big success like Aldi, you should also invest in private label products.

Growth Of Energy Drinks

Why there is a growth in private label energy drinks?

Energy drinks are loved by all. All age group people nowadays prefer energy drinks. They have their own advantages. Even though energy drinks have few disadvantages, people really don’t care about them much. Energy drinks became a life saver and booster for many people nowadays. It is helpful for people in many firms such as sports, film actors, software engineers and many more kind of people who drain energy at their workplace. Such kind of drinks boost up their energy levels instantly and make them feel energetic than before.

Let us see few reasons why there is a growth in private label energy drinks.

•    The quality improvement: the private labels always strive to improve their quality. They always make research that helps them to improve their quality. They always have a connection with the other big markets in the society. They observe the steps of those big companies and plan a better strategy to improve the quality of the product.

•    Low cost: this is the one best main reason for why private label energy drinks are special for. Instead of being popular and having good quality, the brands always keep the prices low and affordable to all types of people in the market. This is because they have a production for the low rate with a good quality and quantity.  These energy drinks are cheap and good compared to other big products energy drinks. As they include all the extra charges too in the MRP.

•    Good quantity: when we see few energy drinks of big companies, considering the packing of those, we see the small bottles or tins for a very high price. We can generally not expect a costly drink to be in less quantity. For this reason, the private, labels are preferred. As they give the good quantity of the product at a low cost and even with assured quality. This makes people get attracted much to the drinks.

•    Wide availability: due it’s less cost and easily available nature the people will like to purchase these kinds of energy drinks. They are generally available large in all the markets equally to big brand energy drinks. Almost all of the big and small shops in everyone’s locality sell these kinds of drinks nowadays, as it has a wide range of demand. Even a small retailer owns a popular private label drink to attract the customers.

•    Selected by many retailers: as we know that the cost of private label energy drinks are less and they are available easily, many retailers prefer to buy such kinds of drinks than the big brand drinks.  When a person comes to a retail shop and sees something new, he will like to try it. He will surely purchase it because of its quantity and quality. If he likes it, he will surely continue it. If not he will see another brand. In a majority of the cases, people will love the private labels around them.

•    Customer’s choice: these private labels always give a good reference to the customer’s choice. They keep upgrading themselves according to the time and seasonal changes. They frequently try to experiment with the new flavors that are trending in the market. They make the best use of the seasons and the tastes of the customers or people around them. They work hard on creating magic with the flavors. It even works in the market as a person will like to try all the new flavors because of the low price. From those many flavors, he will surely like one and get addicted to it. This is not possible in the big brands as they need a lot of capital to produce a new flavor, unlike private labels. They always stick on to one flavor which is not so much to the customers. This is another reason why private label energy drinks are growing in the market faster than the big companies.

•    Health concerns: as the private label companies try to give a better quality of energy drinks to its customers. They even take a good care of the ingredients used in the product. They see to it that each product is tested and is good for consumption. Whereas when we come to a big brand as the production is more, they may compromise on the quality. They may not check each and every product, and this may lead to serious health issues. It is not that big brands are harmful, but in few cases, this can surely happen as we see in the news. The private labels try not to do such as they need much publicity and the good deal in the future. Their customers are their gods, and they are the profit makers.