Large retailers how to implement private label strategy

Rationing the number of retailers in the market? How to implement private labeling strategy for large retailers? What's the best way to do this? The Franchise Industry in China 2008-2010 2008-2010 China's franchise industry to cope with the impact of the financial crisis and In 2008, the U.S. Wall Street crisis not only quickly spread to the global financial markets, but also by the virtual economy to the real economy spread. Financial CrisisMore related research reports>> Retail enterprise private brand (Private Brand) strategy refers to the retail enterprise through the collection, collation, analysis of consumer demand for a certain type of commodity characteristics of information, put forward the new product function, price, shape and other aspects of the development of the design requirements, and further selection of suitable production enterprises for the development of the production, and ultimately by the retail enterprise using its own trademark on the new product registration and production, the retail enterprise to use its own trademark on the new product registration and design. The final strategy is for the retailer to use its own trademark to register the new product and sell it within the enterprise. In China's domestic market, the vast majority of commodities are branded by manufacturers, while private labels, i.e., brands designed by commercial enterprises themselves and used for the commodities they handle, are seldom used. With the gradual establishment of the socialist market economy, the competition in the field of circulation has become more and more intense, how to continuously innovate and reform, and seek their own market position in the new commercial retailing system has become a top priority. The implementation of private labeling strategy, by more and more enterprises are concerned.

I. The origin of large retailers' own brand Retail private label is a product of the development of competition to a certain stage, is the retail enterprise in order to highlight their own image, to maintain the competitive position, and make full use of intangible assets and take a competitive strategy, the core of which is the goods to the name of the enterprise or the enterprise's own name as a brand, in the sale of the enterprise, rather than using the manufacturer's brand in the country. Sales. At present, in developed countries, many large and medium-sized retail enterprises are operating private label goods and the proportion is increasing year by year. A survey in the European market shows that 17% of all retailers used private label in 1980, and the proportion has risen to 23% in 1988, and now reaches more than 40%. Among many world-famous large-scale retailers, the successful model of the implementation of the private label strategy is none other than the British Lion Department Store Group. In this company, all commodities use the company's own brand - "St. Michael's" brand, known as the world's largest "manufacturer without a factory". The famous U.S. retail company Sears 90% of the goods with its own brand, its business "craftsman" tools, "tenacious" batteries, "Kenmore" appliances, etc., in the market of the Its "Craftsman" tools, "Tenacious" batteries, and "Kenmore" appliances are as well known in the marketplace as their manufacturer counterparts in terms of popularity and sales volume. Japan's largest retailer, Daiei Chain Group, uses private labels for about 40% of its products. Businessmen in China have also had a tradition of producing and selling goods under their own brands. In Beijing, for example, Tongrentang's proprietary Chinese medicines, Wu Yutai's flower teas, Neilian Sheng's shoes, and Shengxifu's hats have been self-produced and self-sold goods for a long period of time. To this day, many enterprises have also begun to operate their own branded goods. Founded in 1937, Shanghai Kaikai Department Store (now Kaikai Group Co., Ltd.) began to implement brand strategy from 1987, so that the Kaikai brand products have been awarded the title of famous brand, including the Kaikai brand shirts won the "China's Top Ten Famous Brand Shirts", the Kaikai brand wool sweater has also been awarded "China's Famous Brand Products", "China's Famous Brand Products", "China's Top Ten Famous Brand Products", and "China's Top Ten Famous Brand Products". The two products have the highest market share among the same kind of products. Beijing Lufthansa Friendship Shopping Center also registered the Yansha trademark, and developed the Yansha brand shirts, bags and other private goods, embarked on the road of development and operation of its own brand. Fuzhou market, the implementation of private label strategy is more successful "three Jin" clothing. The store in addition to operating a well-known manufacturer brand clothing, but also developed a series of considerable varieties of "Sanjin" brand clothing. With its unique style, reasonable price and convincing quality, it attracts many customers. What is more encouraging is that the own brand strategy has attracted the attention of the government and some enterprises, such as the Shanghai Municipal Government has developed 50 intermediary brands as one of the top ten tasks of the business. Brand conversion has become a new growth point to promote the development of large shopping centers. However, from a general point of view, most of China's retail enterprises are still selling manufacturer brand goods on behalf of the main products sold in the market, almost the manufacturer brand reigns supreme, the sales of private label accounted for a small percentage of the national retail sales, compared with the Western market to form a huge contrast. Second, the implementation of private brand strategy by large retail enterprises is in line with their own interests. With the deepening of reform and opening up, the environment in which large retail enterprises are located has changed a lot. First of all, the world's retail giants have entered the Chinese market in a variety of forms, and with their mature price advantages, standardized retail concepts, perfect distribution systems and flexible talent mechanisms, large-scale retail enterprises in China constitute a strong pressure; secondly, a large number of domestic stores, special stores, exclusive agents and individual households mainly in the free market, making the retail industry increasingly complex, while many manufacturers have established their own sales outlets, making the retail industry increasingly complex, and at the same time, the large-scale retail enterprises have established their own sales outlets. At the same time, many manufacturers have established their own sales outlets to extend their tentacles to the circulation area, and their business means are flexible and diversified, in some of the same goods, large retailers no longer have an advantage to speak of. In this context, the reality of private label strategy on China's commercial development has also attracted the attention of more and more large-scale retail enterprises, and has become an important element of commercial modernization, and it is imperative to vigorously implement the private label strategy. (I) is conducive to enhancing the competitiveness of commodities The implementation of private label increases the competitiveness of commodities, most prominently manifested in its realization of low prices of commodities and the expansion of sales of commodities. The main reasons for this are as follows: Firstly, large retail enterprises produce or organize the production of goods with their own logos by themselves, and the purchase of goods does not have to go through intermediate links, which greatly saves the circulation costs; secondly, the own-branded goods are only sold within the enterprise, and their advertising and promotion is mainly carried out with the help of valuable goodwill assets, using advertising leaflets, closed-circuit television and radio in shopping malls, and the promotion of the brand is only focused on the promotion of one brand, so the unit's own brand is only promoted. A brand of publicity, so the unit of own-brand goods consumed advertising costs are greatly reduced; third, own-brand goods packaging simple and generous, packaging costs less; fourth, large retail enterprises have a large number of chain stores, you can carry out large-volume sales, so that the production of economies of scale, reduce production costs, to facilitate the sale of thin margins. (ii) is conducive to the formation of characteristics of the business If only the operation of the manufacturer's brand of goods, then the composition of the varieties of goods between retail enterprises is basically the same, it is difficult to form their own characteristics. The implementation of own-brand commodity strategy, according to the market situation and timely organization of the production and supply of certain own-brand commodities, can make the enterprise's commodity composition and operation is rich in characteristics, at the same time, the enterprise to own commodities as the basis for providing consumers with a more comprehensive service, with the help of commodities can further strengthen the corporate image, the two complement each other, the formation of the enterprise's own unique appeal to consumers. (C) is conducive to giving full play to the advantages of intangible assets Large retail enterprises in the long-term operation of the formation of a unique management and operation mode, the name of the goods in the minds of consumers are often y rooted. For enterprises with good reputation and high visibility to name their own branded goods with the enterprise name and sell them within the enterprise, injecting the good image of the shopping mall into the goods, it is extremely easy for people to associate the enterprise's quality service and rigorous management with the excellent quality of its own branded goods, which in turn translates into reliance on and acceptance of the goods, and the success of the own branded goods, in turn, will further strengthen the customers' Satisfaction. It can be said that the implementation of the private label strategy makes the intangible assets of the enterprise flow, which is also equal to adding a source of profit to the enterprise. Through the goods to win the credibility of the trademark, and make this trademark credibility ultimately become the credibility of the store, so as to win a stable market. (D) is conducive to grasp more autonomy The traditional large-scale retail enterprises only deal with the manufacturer's brand of goods, this "bricks and mortar" type of operation so that large-scale retail enterprises in the market competition is in an extremely passive position, mainly prices and profits are subject to the manufacturer's restrictions. If the implementation of private label strategy, the enterprise can collect, organize, analyze consumer information on the characteristics of certain types of commodities, put forward the development and design of new product requirements, and further select the appropriate production enterprises for development and production or set up their own production, the rapid introduction of customer needs of the corresponding products, and ultimately in the enterprise with its own brand for sale, to obtain the initiative to operate in the market, and at the same time also gained the right to set the initiative of the price. At the same time, it also obtains the initiative to set prices. Enterprises not only obtain commercial profits, but also obtain part of the processing and manufacturing profits, increasing the ability to resist market risks. Large-scale retail enterprises are no longer passive from the producer to receive products, but to become an active participant in the market business activities, from the manufacturer's sales agent to become the customer's production agent. (E) is conducive to accurately grasp the market demand of large-scale retail enterprises, the advantages of its focus on the collection of consumer information and marketing capabilities, the choice of private label strategy, so that large-scale retail enterprises of this advantage can be effectively played, they are directly in front of the consumer, to quickly understand the dynamics of the market demand and respond in a timely manner, the widespread use of modern computer technology in the retail business to make this advantage more obvious, from this point of view. This advantage is more obvious, from this point of view, large-scale retail enterprises to implement their own brand strategy can often be one step ahead of producers, invariably enhance the competitiveness of the enterprise itself.

Large retail enterprises in the development of private label goods have a number of competitive advantages, to the enterprise has brought a variety of strategic benefits. In the actual operation process, the implementation of private label strategy depends on whether the large retail enterprises have the relevant conditions, while mastering the implementation of skills and methods. (A) the conditions for the implementation of private labeling strategy, the development of private labeling should have at least four conditions: 1, a certain scale and network advantages. The success of the private label strategy is inseparable from the economies of scale to play, so it must be based on large-scale operations and a broad sales network, so that enterprises can attract large orders to the cooperation of production enterprises, reduce the production cost per unit of product and operating costs, and the use of their own sales network to promote the various advantages of private label goods can be given full play. 2, goodwill conditions. In fact, a commodity with a retailer brand or manufacturer brand depends mainly on the level of visibility of the two. Higher awareness of the enterprise brand is more conducive to the sale of goods, in this sense, the launch of private label is based on the retailer's own goodwill, and good quality and low-priced private label goods can play a role in improving the goodwill of the enterprise and confirming the role of the two are complementary to each other. Higher goodwill is the prerequisite and inherent advantage for retailers to implement private brand strategy. Strong product design and development capability. Private label goods are developed by the retailer as the main body, and the profit and loss of its development and sales are ultimately borne by the retailer itself, which puts forward higher requirements for the enterprise's ability in product development and design. Enterprises must be able to understand customer demand and its changes, timely feedback information, design products that consumers like, and around these products as the center to carry out effective advertising and publicity activities to promote the promotion and sales of private label goods. 4, strong marketing ability. The launch of its own brand to bear greater risks, due to a variety of commodities *** with a brand, any kind of commodity problems will be more or less on the credibility of other commodities to produce damage, which is on the retail enterprise in product quality, service level, supply capacity and other aspects of the requirements of a higher and more stringent; at the same time the retail enterprise to enter the field of production, to become the main body of the marketing activities, and the risks it bears from the circulation area extends to the field of production, these are all the risks borne by the retailer. At the same time, retail enterprises enter the production field and become the main body of marketing activities, and the risks they bear are also extended from the circulation field to the production field, which all require enterprises to have strong management ability, public relations ability and the ability to grasp the market. (B) large retailers should pay attention to the implementation of private label strategy 1, careful selection of manufacturers This is the implementation of private label goods the biggest difficulty. Retailers have high quality requirements for private label goods, and when choosing potential suppliers, they should make careful consideration of their production capacity, transportation status and other factors, the more varieties, the more manufacturers they cooperate with, the more problems such as supply of goods, quality monitoring and so on, and the greater the risk. On the other hand, the more powerful manufacturers, they are more willing to produce their own branded products, generally not willing to become a mere supplier of commercial enterprises, commercial enterprises are more often than not to consider excess production capacity of the market to develop the ability of the weaker manufacturers, and only this is not enough, these manufacturers should also have at the same time the quality of reliable products, more advanced equipment, higher quality personnel, strong technical capabilities in order to Ensure the credibility of the product. In addition, the businessman should always check the indicators of the product, when possible, should be sent to acceptance or in-depth participation in the management of enterprises to ensure that the product really meets market demand. 2, to focus on the choice of commodity categories for different commodities, consumer psychology is different, and accordingly the possibility of the successful implementation of private label strategy there are also large differences. Generally speaking, the following attributes of the goods are more suitable for the use of private labeling strategy: (1) the technical content of the goods is not high. Popular consumer goods with low technical content do not require special expertise, and consumers can easily recognize whether they are real or fake, such as clothing, food, beverages, as well as housewares and stationery, etc. On the other hand, such as televisions, consumers need to know how to use their own brands. On the contrary, as in the case of television sets, consumers need to rely more on the trademark and the popularity and technical strength of the manufacturer to indirectly judge the quality of the goods. The development of private labels in the retail industry itself proves this point. In Switzerland, grocery products account for 41.2% of private label goods, and in the United Kingdom, the proportion is 37.1%. Compared with consumer durables such as household appliances, the implementation of private label strategy for these goods is more likely to be successful. (2) Lower unit price goods. For commodities with low unit price, consumers can decide whether to buy again by using them after the first purchase, which is less risky, while for commodities with high unit price, consumers are more prudent in their purchasing decision, and it is impossible for them to simply buy another one after purchase if they feel unsatisfied. (3) Goods with high purchase frequency. Commodity purchase frequency is high, for large retail enterprises, can implement a large number of development orders, thereby reducing production costs, to ensure that the realization of the low price of its own brand; for consumers, their loyalty to such goods is relatively low, it is easy to betray the original brand selection and accept the new brand. 3, improve the quality of quality control personnel to ensure the quality of goods Retail private label business process, goodwill and private label goods are very close to the relationship between. The launch of private label goods mainly rely on the advertising role of corporate goodwill, and high-quality private label products and products to improve the goodwill of enterprises and confirm the role of private label goods quality and low price, the image of the enterprise is bound to form a virtuous cycle in the minds of consumers, while the poor quality, it will be in the minds of consumers a layer of shadows, the enterprise goodwill for many years will be damaged. Therefore, commercial enterprises to develop and operate their own brand of goods, must have a number of high-quality commercial inspection staff. British Horse & Lion Department Store Group in the company's 260 chain stores operating its own brand of goods, "St. Michael" goods at the same time, the Group has more than 350 technical personnel responsible for "St. Michael" goods quality inspection work. 4, reasonable design brand should pay attention to the enterprise style and the characteristics of the products organically combined. Such as a famous store, the name of the store may have a high degree of goodwill, then its business products in the use of its own brand, the brand should also be determined in conjunction with the target market's consumption habits and consumer psychology, so that the goods can be happily accepted by consumers. 5, pay attention to the protection of the brand only registered trademarks are legally protected trademarks. The implementation of own-brand goods strategy should be in the creation of the brand business, the beginning of the brand application for registration, so as not to be in the future by others to seize, fraudulent use of the legal protection of the loss and suffer, have to suffer. At the same time should use legal weapons, at any time to protect the legitimate rights and interests of the company's brand. (C) the implementation of private labeling strategy large retailers have the following two ways of implementation of private labeling strategy: 1, set up their own production base, that is, the enterprise's own design and development and production and processing of certain commodities, the use of their own brand sales. This approach is characterized by: the production of retail enterprises to form a stable collaborative relationship, rather than a purely transactional relationship, they have **** the same interests and goals, into a whole of interest. Adopt this way of retail enterprise should have enough manpower and reasonable human structure, make by planning, design to production, sales have the corresponding professionals. Enterprises should also have enough financial resources to build factories, purchase equipment and pay personnel expenses. 2, commissioned manufacturers, that is, the retail enterprise according to market dynamics on the quality of goods, specifications, types, raw materials, packaging, structure and other aspects of the design, and then commissioned to the production of enterprises in accordance with the specific requirements of the production of manufacturing, sales, the use of their own brands. The use of this approach between retailers and manufacturers is a relatively loose collaborative relationship, for retailers, the risk is greater. But this way the producer is small, but the quality is high. These small production enterprises due to capital, scale limitations, can not compete with the use of retailer brand goods, large retail enterprises is to take advantage of this point, to profit as a link, so that these small enterprises for its production, to achieve mutual benefit. In China, encouraging large retail enterprises to develop private label goods has profound economic and social significance. Should use their own brand to guide consumption, with new products to adapt to changes in the market, catering to the needs of customers, out of the misunderstanding of bad competition, so that the enterprise can continue to develop.