Many people are unable to distinguish between private brands and national brands. National brands are associated with well-established companies that are well-known to many people at home and abroad.
On the other hand, private brands are associated with businesses that have a limited outreach and are known only to a select target customer base. However, some of the products offered by private brands are also supplied through third-party distributors to their target audience.
What are the characteristics of private and national brands?
National brands are well-recognized and many people trust their services because their operations are well-known and they have a high level of accountability. They run expensive marketing campaigns to promote their products and they usually charge extra for the products and services they offer.
In contrast to this, private brands have a lesser degree of recognition as compared to national brands. Some of the products offered by private brands are not as good as the ones offered by national brands. It is because of this quality difference that many people prefer private brands over national brands.
Private brands also have far lower operational costs than national brands and do not conduct expensive marketing campaigns to promote their products. Most retailers opt to provide goods belonging to both private and national brands. However, since the products supplied by private brands are much cheaper than those produced by national brands, retailers are able to earn larger profit margins on them.
It is also important to mention here that most private brands do not actually manufacture the products themselves and only serve as distribution agents for the goods. Some private also seek to exclusively target certain regions and their products are designed keeping in mind the preferences of the people in those regions.
Customers of national and private brands
Products offered by national brands are usually purchased by the customer segment belonging to the elites or upper class. Since they are comparatively more expensive, customers’ segments belonging to the lower income categories avoid using these products and prefer going for private label products.
Why do some people prefer private brands over national brands?
Brand loyalty is one of the biggest factors in motivating people to choose private brands over national ones.
Old habits die hard and people who are accustomed to buying products supplied by private brands find it difficult to switch over to products belonging to national brands even if there are superior in quality.
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