RESEARCH REPORT

ON

“CUSTOMER PERCEPTION TOWARDS PRIVATE LABEL IN COMPARISON WITH MANUFACTURING BRANDS”

Under the guidance of:

MR.SUSHIL KUMAR DIXIT

FACULTY OF

AIT- SCHOOL OF MANAGEMENT

GREATER NOIDA

SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMENT

By:

ANKUR MISHRA

PGDM (MARKETING & FINANACE)

M2009013

APEEJAY INSTITUTE OF TECHNOLOGY - SCHOOL OF MANAGEMENT

GREATER NOIDA

Student’s declaration

I, ANKUR MISHRA, herby certify that the survey, data collection and

analysis work related to research project on, “CUSTOMER PERCEPTION

TOWARDS PRIVATE LABEL IN COMPARISON WITH MANUFACTURING

BRANDS” has been carried out exclusively on my own efforts under the

supervision of Mr. Sushil Kumar Dixit (Faculty Supervisor AIT, Greater Noida).

I hereby declare that this work was neither published nor submitted to any

other institution.

Date:

Place:

Ankur Mishra

PGDM 2ND YEAR

M2009013

Faculty Guide’s Certificate

This is to certify that the research project title, “CUSTOMER PERCEPTION

TOWARDS PRIVATE LABEL IN COMPARISON WITH MANUFACTURING

BRANDS” carried out by Ankur Mishra a student of PGDM 2nd Year at

Apeejay Institute of Technology – School of Management, Greater Noida, has

been done under my guidance.

This is an original work carried by the said student to the best of my

knowledge and belief and I recommend for its submission and consideration.

Date:

Place:

Mr. Sushil Kumar Dixit (Faculty Guide)

Director’s Certificate

This is to certify that the research project titled “CUSTOMER PERCEPTION

TOWARDS PRIVATE LABEL IN COMPARISON WITH MANUFACTURING

BRANDS” carried out by Ankur Mishra a student of PGDM 2nd Year at

Apeejay Institute of Technology – School of Management, Greater Noida,

under the supervision of Mr. Sushil kumar Dixit (Faculty Guide) is a

original work carried out by the said student o the best of my knowledge and

belief and I recommend for its submission and consideration.

Date:

Place:

(Prof. R. K. Verma)Executive Director

ACKNOWLEDGEMENT

There is always a sense of gratitude which one expresses to others for the genuine

help they render during all phases of life. I would like to express my gratitude

towards all those who have been helpful to me in getting this mighty task of

research to a successful accomplishment.

First of all, I would like to be thankful to My Parents who always give Support to

me. Then I also consider it a pleasant duty to express my heartfelt appreciation,

gratitude and indebtedness to our respected faculty Mr. Sushil Kumar Dixit for

his keen interest, invaluable pain taking & excellent guidance, patience, endurance,

encouragement & thoughtful advice throughout the project work duration.

I am also thankful to all my friends who gave me constant & continuous inspiration

to complete this project.

(Ankur Mishra)

CONTENTS

S. No.

TOPICS Page No.

1 Executive summary 1

2 Introduction 2-9

3 Literature review 10-11

4 Indian Retail industry 12-22

4.1 background 12-15

4.2 Current status 15-20

4.3 Contribution to the Indian economy 21

4.4 Future prospect in retail business 22

5 Story of private brand 23-38

5.1 The evolution of private label branding 23-30

5.2 The growth of private labels 31-34

5.3 Advantages of private label brand 35

5.4 Disadvantages of private label brand 36

5.5 Commercial objectives behind launching private labels

37-38

6 Statement of research objectives 39

7 Research Methodology 40-42

8 Research limitation 43

9 Analysis and interpretation of Data 44-58

10 Findings 59-60

10 Recommendations & Conclusion 61-62

11 Bibliography 63

Annexure 64-67

Executive Summary

During this research project, through primary research, I gathered a deeper

understanding and the marketing of private label products. I utilized different

researching methods to gather data on customer perception towards private

label. These methods included collecting both primary and secondary data.

Primary data was collected through personal interviews of customer. I also

created a questionnaire that rated a consumer’s attitude and their

perception towards private label in comparison to manufacturing brands.

Secondary data was collected using the library at Apeejay Institute of

Technology School of management and various research reports available on

internet.

My goal for this project was to understand consumer perception towards

private label products and make a comparison of customer perception with

manufacturing brands. I did this through collecting primary data and

analyzing secondary data. I collected my primary data using a survey that I

initiated in Ansal Plazza and Great India Palace while consumers were

shopping. I split the survey up between the different store tiers to get a

better understanding of the consumer’s attitudes at different locations. I

focused on how the consumer perceived private label in comparison to

manufacturing brand.

This research project gave me confidence and helped me improve my

research skills. I was able to cross reference the demographics of each store

that I surveyed to draw conclusions on the data I collected. These

conclusions lead me to recommendations. The skills that used for this project

I can bring into the business world.

INTRODUCTION

Customer Perception

Perception

Perception can be describe as “how we see the world around us.” Two

individual may be subject to the same stimuli under apparels the same

condition, but how they recognize them, select them, organize them, and

interpret them is a highly individual process based on each person’s one

needs, values and expectations. The influence that each of these variables

has on the perceptual process, and its relevance to marketing.

Definition

“Perception is defined as the process by which an individual selects,

organized and interpret stimuli into a meaning full & coherent picture of the

world”. A stimulus is any unit of input to many of the senses. Examples of

stimuli include products, packages, and brand names, advertising and

commercial. Sensory receptors are the human organ that receives sensory

inputs. All of these functions are called into play- either single or in

combination-evaluation and use of most consumer products. The study of

perception is largely the study of what we subconsciously add to or subtract

from raw sensory input to produce our own private picture of the world.

Perceptual select

Consumers subconsciously exercise a great deal of selective as to

which aspect of the environment-which stimuli-they perceive. An individual

may look at some things, ignore others and turn away from still others. In

total, people actually receiver perceive only a small fraction to the stimuli to

which they are expose.

Nature of stimulus

Marketing stimuli include an enormous number of variables that affect the

consumer’s perception such as the nature of the product, its physical attributes, the

packages design, the brand name, the advertisement and commercial, the position

of a print ad or the time of a commercial and the editorial environment.

a) Contrast: contrast is one of the most attention- compelling attributes of a

stimulus. Advertiser often uses extremely attention getting device to achieve

maximum, contrast and thus penetrate the consumer perceptual screen.

B) Expectations: People usually see what they expect to see and what they

expect to see is usually based on familiarity previous experience or preconditioned

set in marketing context people tend to perceive product and product attributes

according in their own expectation.

c) Motives: People tend to perceive thing they need or want the stronger the need

the greater the tendency to ignore unrelated stimuli in the environment. An

individual perceptual process simply attunes itself more closely to those elements

of the environment that are important to that person.

Important selective perception concepts

As the preceding discussion illustrates, the consumer’s “Selection” of stimuli

from the environment is based on the interaction of expectation and motives with

the stimuli itself. These factors giver rise to a number of important concepts

concerning perceptions.

a) Selective Exposure: Consumers actively seek out messages they find

pleasant or with which they are sympathetic and actively avoid painful

threatening ones. Consumers also selectively expose themselves to

advertisement that reassures them of the wisdom of their purchase decision.

b) Selective Attention: Consumers have a heightened awareness of the

stimuli that meet their need or interest and an owner awareness of stimuli

irrelevant to needs.

c) Perceptual Defense: consumers subconsciously screen out stimuli that

are important to for them not to see even though exposure has already taken

place. Thus threatening or otherwise damaging stimuli are less to be

consciously perceived than are neutral stimuli at the same level of exposure.

d) Perceptual Blocking: Consumers protect themselves from being

bombarded with stimuli by simply” tuning out”- blocking such stimuli from

conscious awareness. This perceptual blocking –out is somewhat to the

mechanical “zapping” of commercial using remote controls.

CONSUMER DECISION MAKING AND BUYING PROCESS

Marketing have go beyond the various influences on buyers and

develop an understanding of how consumers actual make their buying

decisions. Mainly the buyer plays these roles in buying decisions:

Initiator: a person who first suggests the idea of buying the product or

service.

Influencer: a person whose view or advice influences the decision.

Decider: a person who decide on any component of a buying decision.

Buyer: the person who makes the actual purchase.

User: a person who consumers or uses the product or service.

Decision Making Process

Need Recognition

The buying process starts when the buyer recognizes a problem or need. The

need can be triggered by internal or external stimuli. In the former case, one

of the person normal needs – hunger, thirst and sex- rise to a threshold level

and become a drive. In the relative case, a need is roused by an external

stimulus.

Marketers need to identify the circumstances that trigger a particular

need. By gathering information from a number of consumers, marketers can

identify the most `frequent stimuli that spark and interested in a product

category. They can develop marketing strategies that trigger consumer’s

interest.

Information search

An aroused consumer will be inclined to search for more information. We can

distinguish between two levels of arousal. The milder search state is called

heightened attention.

At this level a person simply becomes more receptive to information about a

product.

At the next level, the person may enter active information search: looking for

reading material, phoning friend and visiting stores to about the product.

Consumer information sources fall into four groups

a) Personal sources: family, friends, neighbors

b) Commercial sources: advertising, salespersons, dealers,

packaging

c) Public sources: mass media, consumers-rating organizations

d) Experimental sources: handling, examining, using the product

Each information source performs a different function in influencing the

buying decision. Through gathering information, the consumer learns about

competing brands and their features.

Evaluation of alternatives

There is no single evaluation process used by all consumers or by one

consumer in all buying situation. There are several decision evaluation

processes, the most current models of which see the process as cognitively

oriented.

Some basic concepts will help us understand consumer evaluation

processes.

a) The consumer is trying to satisfy a need.

b) The consumer is looking for certain benefits from the product

solution.

c) The consumers see each product as a bundle of attributes with

varying abilities of delivering the benefits sought to satisfy this

need.

Consumers vary as to which product attributes they see as most relevant

and the importance they attach to each attribute. They will pay the most

attention to attributes that deliver the sought benefits the market for a

product can often be segmented according to attributes that are silent to

different consumer group.

Purchase Decision

In evaluation stage, the consumer forms preferences among the brands in

the choice set. The consumer \may also forms an intention to buy most

preferred brand. However, two factors can intervene between the purchase

intentions and the purchase decision. The first factor is the attitude of the

others. The second, factor is unanticipated situational factor that may erupt

to change the purchase intention.

A consumer’s decision to modify, postpone or avoid a purchase

decision is heavily influenced by perceptive risks. The amount of perceived

risk varies with amount of money at stake, the amount attribute uncertainty

and amount of consumer self-confidence.

Post purchase behavior

After purchasing the product the consumer will experience some level of

satisfaction ort dissatisfaction. The3 marketers job does not end when the

product is bought marketers must monitor post purchase satisfaction; post

purchase action and post purchase product users.

CONSUMER DECISION MAKING AND BUYING

PROCESS

Cultural,Social,

Individual andPsychological

Introduction to the Topic

Need Recognition

Information Search

Evaluation of Alternatives

Purchase

Post purchase Behavior

The topic of my research is “Customer perception towards the Private Label

in comparison with manufacture brands”. It is not an easy task to judge the

perception of the consumer as the time passes.

What the customer think about the private label brands?

What they think when private label compare with the manufacturing brands?

Private Labels Brands (PLBs), also called store brands (SBs), are goods

owned and merchandised by retailers. A private-label product is a

manufactured good that a retailer purchases from a supplier, with the

intention of renaming, repackaging and selling it under the distributor’s own

brand name.

Manufacturing Brands are also known as the National Brands. Brand name

used by a manufacturer whenever that product is sold. A nationally

distributed product brand name. May also be distributed regionally or locally.

LITERATURE REVIEW

Previous studies related to Private Label Brands

A review of previous studies related to PLBs brings forth researches carried

out related to certain issues. For example researchers have found that one of

the interesting phenomena concerning PLBs is the fact that their growth has

been highly uneven across product categories (Hoch and Banerji, 1993).

Dhar and Hoch (1997) found that by far the largest source of variation in PLB

share across markets, retailers, and categories (40%) is due to the

differences among product categories. Previous research investigating these

across-category differences has looked at them mostly from the

manufacturer and retailer perspectives. In studying the retailer economics of

PLB programs, researchers have mostly examined factors such as the

technology investments necessary, size of category, category margins,

national brand advertising and promotional activity levels and so forth (Hoch

and Banerji, 1993; Sethuraman, 1992). Thus, Hoch and Banerji (1993) find

that PLBs have higher shares in large categories offering high margins, and

where they compete against fewer national manufacturers who spend less

on national advertising. The gap between national brands and PLBs in the

level of quality also depends on the technology requirements in

manufacturing that varies across categories (Hoch and Banerji, 1993).

Research has been more limited on the consumer-level factors that make

PLBs differentially successful across product categories. Some researchers

studying consumer-level factors for PLB proneness--such as Richardson, Jain

and Dick (1996)--have not studied across category variations at all. They

have chosen instead to aggregate data across categories. Those few studies

that have looked at cross-category differences from a consumer-factor

perspective have sometimes omitted important variables: Sethuraman and

Cole (1997). In this research, we focus upon these consumer-level

perceptions of intercategory differences especially in food and grocery

segment. By doing so, we hope to shed light on what has made PLBs

successful overall, drawing implications both for retailers marketing PLBs as

well as the national brands that compete with them. Thus, a review of

previous studies undertaken in the area of PLBs indicates that, research has

been more limited on the consumer-level factors that make PLBs

differentially successful across product categories. Given the lack of studies

undertaken in the area of understanding Indian customers’ attitude and

perception of PLBs, the present study has been undertaken to gain an insight

into how customers in India perceive PLBs. The findings of the study will be

helpful for retailers to understand the importance of various factors in being

successful with customers in the PLBs in food and grocery category.

INDIAN RETAIL INDUSTRY

Background

The Indian retail industry is divided into organized and unorganized sectors.

Organized retailing refers to trading activities undertaken by licensed

retailers, that is, those who are registered for sales tax, income tax, etc.

These include the corporate-backed hypermarkets and retail chains, and also

the privately owned large retail businesses. Unorganized retailing, on the

other hand, refers to the traditional formats of low-cost retailing, for

example, the local kirana shops, owner manned general stores, paan/beedi

shops, convenience stores, hand cart and pavement vendors, etc.

India’s retail sector is wearing new clothes and with a three-year

compounded annual growth rate of 46.64 per cent, retail is the fastest

growing sector in the Indian economy. Traditional markets are making way

for new formats such as departmental stores, hypermarkets, supermarkets

and specialty stores. Western-style malls have begun appearing in metros

and second-rung cities alike, introducing the Indian consumer to an

unparalleled shopping experience.

The Indian retail sector is highly fragmented with 97 per cent of its

business being run by the unorganized retailers like the traditional family run

stores and corner stores. The organized retail however is at a very nascent

stage though attempts are being made to increase its proportion to 9-10 per

cent by the year 2010 bringing in a huge opportunity for prospective new

players. The sector is the largest source of employment after agriculture,

and has deep penetration into rural India generating more than 10 per cent

of India’s GDP.

Comparative Penetration of Organized Retail (in %)

US Taiwan Malaysis Thailand Indonesia China India0

10

20

30

40

50

60

70

80

90

100

8581

55

40

30

20

5

1519

45

60

70

80

95

Organized Traditional

India is the 4th largest economy as regards GDP (in PPP terms) and is

expected to rank 3rd by 2010 just behind US and China. On one hand where

markets in Asian giants like China are getting saturated, the AT Kearney's

2006 Global Retail Development Index (GRDI),for the second consecutive

year Placed India the top retail investment destination among the 30

emerging markets across the world.

Over the past few years, the retail sales in India are hovering around

33-35 per cent of GDP as compared to around 20 per cent in the US. The

table gives the picture of India’s retail trade as compared to the US and

China.

Retail Trade – India, US and China

Trade (US$

billion)

Employment

(%)

Shops

(million)

Organized

sector share

(%)

India 180-394 7 12 2-3

China 360 12 2.7 20

US 3800 12.6-16 15.3 80

The last few years witnessed immense growth by this sector, the key drivers

being changing consumer profile and demographics, increase in the number

of international brands available in the Indian market, economic implications

of the Government increasing urbanization, credit availability, improvement

in the infrastructure, increasing investments in technology and real estate

building a world class shopping environment for the consumers. In order to

keep pace with the increasing demand, there has been a hectic activity in

terms of entry of international labels, expansion plans, and focus on

technology, operations and processes.

This has lead to more complex relationships involving suppliers, third

party distributors and retailers, which can be dealt with the help of an

efficient supply chain. A proper supply chain will help meet the competition

head-on, manage stock availability; supplier relations, new value-added

services, cost cutting and most importantly reduce the wastage levels in

fresh produce.

Large Indian players like Reliance, Ambanis, K Rahejas, Bharti AirTel,

ITC and many others are making significant investments in this sector

leading to emergence of big retailers who can bargain with suppliers to reap

economies of scale. Hence, discounting is becoming an accepted practice.

Proper infrastructure is a pre-requisite in retailing, which would help to

modernize India and facilitate rapid economic growth. This would help in

efficient delivery of goods and value-added services to the consumer making

a higher contribution to the GDP.

International retailers see India as the last retailing frontier left as the

China’s retail sector is becoming saturated. However, the Indian Government

restrictions on the FDI are creating ripples among the international players

like Wal-Mart, Tesco and many other retail giants struggling to enter Indian

markets. As of now the Government has allowed only 51 per cent FDI in the

sector to ‘one-brand’ shops like Nike, Reebok etc. However, other

international players are taking alternative routes to enter the Indian retail

market indirectly via strategic licensing agreement, franchisee agreement

and cash and carry wholesale trading (since 100 per cent FDI is allowed in

wholesale trading).

Current Status

The BMI India Retail Report for the first-quarter of 2011 forecasts that total

retail sales will grow from US$ 392.63 billion in 2011 to US$ 674.37 billion by

2014. Strong underlying economic growth, population expansion, the

increasing wealth of individuals and the rapid construction of organized retail

infrastructure are key factors behind the forecast growth. With the

expanding middle and upper class consumer base, there will also be

opportunities in India's tier II and III cities.

Mass grocery retail (MGR) sales in India are expected to undergo

enormous growth over the forecast period. BMI predicts that sales through

MGR outlets will increase by 145 per cent to reach US$ 21.35 billion by 2014.

BMI forecasts consumer electronic sales at US$ 29.09 billion in 2011,

with over-the-counter (OTC) pharmaceutical sales at US$ 2.69 billion. The

former sub-sector is expected to show growth of 55.6 per cent between 2011

and 2014, reaching US$ 45.27 billion, with projected double-digit growth of

key products such as notebooks, mobile handsets and TVs. OTC

pharmaceuticals, meanwhile, should increase slightly more, by 56.5 per cent

throughout the forecast period, to reach US$ 4.21 billion.

China and India are predicted to account for more than 91 per cent of

regional retail sales in 2011, and by 2014 their share of the regional market

is expected to be more than 92 per cent. Growth in regional retail sales for

2011-2014 is forecast by BMI at 48.1 per cent, an annual average 15 per

cent.

According to a McKinsey & Company report titled 'The Great Indian

Bazaar: Organized Retail Comes of Age in India', organized retail in India is

expected to increase from 5 per cent of the total market in 2008 to 14 - 18

per cent of the total retail market and reach US$ 450 billion by 2015.

Furthermore, according to a report titled 'India Organized Retail Market

2010', published by Knight Frank India in May 2010 during 2010-12, around

55 million square feet (sq ft) of retail space will be ready in Mumbai, national

capital region (NCR), Bengaluru, Kolkata, Chennai, Hyderabad and Pune.

Besides, between 2010 and 2012, the organized retail real estate stock will

grow from the existing 41 million sq ft to 95 million sq ft.

Driven by the growth of organized retail coupled with changing

consumer habits, food retail sector in India is set to be more than double to

US$ 150 billion by 2025, according to a report by KPMG.

India's retail market is expected to be worth about US$ 410 billion,

with 5 per cent of sales through organized retail, meaning that the

opportunity in India remains immense. Retail should continue to grow rapidly

—up to US$ 535 billion in 2013, with 10 per cent coming from organized

retail, reflecting a fast-growing middle class, demanding higher quality

shopping environments and stronger brands, according to the report

‘Expanding Opportunities for Global Retailers’, released by A T Kearney.

India has been ranked as the third most attractive nation for retail

investment among 30 emerging markets by the US-based global

management consulting firm, A T Kearney in its 9th annual Global Retail

Development Index (GRDI) 2010.

Foreign direct investment (FDI) inflows between April 2000 and October

2010, in single-brand retail trading, stood at US$ 197.04 million, according to

the Department of Industrial Policy and Promotion (DIPP).

Carrefour, the world’s second-largest retailer, has opened its first cash-

and-carry store in India in New Delhi. Germany-based wholesale

company Metro Cash & Carry (MCC) opened its second wholesale

centre at Uppal in Hyderabad, taking to its number to six in the

country.

Electronic retail chain major, Next Retail India, plans to open 400

showrooms across the country during January-March 2011 increasing

the total number of retail stores to 1,000 by the end of the fiscal year

2010-11.

Jewellery retail store chain Tanishq plans to open 15 new retail stores

in various parts of the country in the 2011-12 fiscal.

V Mart Retail Ltd, a medium-sized hypermarket format retail chain, is

set to open 40 outlets over the next three years, starting with 13

stores in 2011, in Tier-II and Tier-III cities.

Reliance Retail, the wholly owned subsidiary of Mukesh Ambani's

Reliance Industries, is set to open 150 stores by the end of March 2011

and double the number of stores across the country in all formats

within five years.

Future Value Retail, a Future Group venture, will take its hypermarket

chain Big Bazaar to smaller cities of Andhra Pradesh, with an

investment of around US$ 1.54 million to US$ 4.41 million depending

on the size and format.

RPG-owned Spencer's Retail plans to set up 15-20 new stores in the

country in 2011-12.

Spar Hypermarkets, the global food retailing chain of the Dubai-based

Landmark Group, expects to start funding its India expansion beyond

2013 out of its local cash flow in the country. So far, the Landmark

Group has invested US$ 51.31 million in setting up five hypermarkets

and plans to pump in another US$ 51.31 million into the next phase of

expansion.

Leading watchmaker Titan Industries Limited plans to invest about US$

21.83 million for opening 50 premiums watch outlets Helios in next five

years to attain a sales target of US$ 87.31 million.

British high street retailer, Marks and Spencer (M&S) plans to

significantly increase its retail presence in India, targeting 50 stores in

the next three years.

Spain's Inditex, Europe's largest clothing retailer opened the first store

of its flagship Zara brand in India in June 2010. It further plans to open

a total of five Zara outlets in India.

Bharti Retail, owner of Easy Day store—supermarkets and hyper marts

—plans to invest about US$ 2.5 billion over the next five years to add

about 10 million sq ft of retail space in the country by then, according

to a company spokesperson.

Policy Initiatives

100 per cent FDI is permitted under the automatic route for trading

companies for cash & carry trading wholesale trading/ wholesale trading.

FDI up to 51 per cent under the Government route is allowed in retail trade

of Single Brand products, according to the Consolidated FDI Policy document.

The Consumer Affairs Ministry has given the green signal to allow 49 per

cent FDI in multi-brand retail. It has written a letter to this effect to the

Commerce Ministry. "Multi-brand retail should be permitted with a cap of 49

per cent… A significant chunk of investments should be spent on back-end

infrastructure, besides logistics and agro-processing," the Consumer Affairs

Ministry had said in response to the discussion paper floated by the

Department of Industrial Policy and Promotion in June 2010 on allowing 100

per cent FDI in multi-brand retail.

The Securities and Exchange Board of India (SEBI) has notified the increase

in the retail investment limit to US$ 4,391.19 in initial public offers (IPOs).

The new norms will be applicable to issues that have yet not opened for

subscription.

Road Ahead

According to industry experts, the next phase of growth is expected to come

from rural markets.

According to a market research report published in June 2008 by RNCOS

titled, 'Booming Retail Sector in India', organized retail market in India is

expected to reach US$ 50 billion by 2011. The key findings of the report are:

Number of shopping malls is expected to increase at a CAGR of more

than 18.9 per cent from 2007 to 2015

Rural market is projected to dominate the retail industry landscape in

India by 2012 with total market share of above 50 per cent

Driven by the expanding retail market, the third party logistics market

is forecasted to reach US$ 20 billion by 2011

Apparel, along with food and grocery, will lead organized retailing in

India

Further, the luxury brand in the country is estimated to be worth about US$

4.06 billion-US$ 4.51 billion and is expanding rapidly driven by the growing

aspirations of youth and income levels in the country. Most people constantly

scale up spends as aspirations grow.

Thus, major international brands are in the process of expanding their retail

presence. For instance, Paul & Shark now has two stores with Hyderabad and

will have few more by next year, Zegna, another Italian brand, known for its

formal wear and quality suits, is also expanding and Diesel will have seven

stores in the country.

Meanwhile, European football clubs, including Manchester United, Chelsea

and Liverpool, are increasingly scouting for partnerships in India to sell their

merchandise and also set up chain of coffee clubs and theme shops.

The stationery retailing market in India is also witnessing steady growth due

to the arrival of organized players in the business. It is estimated that the

Indian office products industry is in the range of US$ 2.22 billion with

stationery comprising US$ 666.89 million-US$ 889.19 million and growing at

30 per cent per annum. Future Group and Reliance Retail are some of the

players who are already tapping into the sector and have launched brands

such as Staples and Office Depot.

Modern retail – swot analysis

SWOT analysis is a tool for analyzing modern retailing. In this analysis, a

study can be made regarding the strength, weaknesses, opportunities and

threats of retail industry.

Strength of modern retail

The benefits of larger organized retail segments are several. The

consumers get a better product at cheaper price. So consumers get

value for their money.

Employment opportunities both direct and indirect have been

increased. Farmers get better prices for their products though

improvement of value added food chain.

A large young working population with median age of 24 years,

nuclear families in urban areas, along with increasing working women

population and emerging opportunities in the service sector are going

to be the key growth drivers of the organized retail sector in India.

It has also contributed to large scale investments in the real estate

sector with major national and global players investing in devolving the

infrastructure and construction of the retailing business.

The trends that are driving the growth of the retail sector in India are

low share of organized retailing and falling real estate prices.

Increase in disposable income and customer aspirations are important

factors.

Increase in expenditure for luxury items is also vital.

The governments of states like Delhi and National Capital Region (NCR)

are very upbeat about permitting the use of land for commercial

development thus increase the availability of land for retail space.

The growth of sachet revolution emerges for reaching to the bottom of

the pyramid.

The annual growth of departmental stores is estimated at 24%.

Weakness of modern retail

The rapid development of retail sector is the sharp improvement in the

availability of retail space. But the current rally in property prices, retail real

estate rentals have increased remarkably, which may render a few retailing

business houses unavailable. Retail companies have to pay high rentals

which are blockage in the turn of profits.

Small size outlets are also one of the weaknesses in the Indian

retailing. 96% of the outlets are lesser than 500 sq.ft. The retail chains are

also smaller than those in the developed countries for instance, the

superstore food chain, food world is having only 52 outlets where as

Carrefour promotes has 8800 stores in 26 countries.

The volume of sales in Indian retailing is also very low. India has

largest population in the world and a fast growing economy.

Opportunity of modern retail

Global retail giants take India as key market .It is rated fifth most

attractive retail market. The organized retail sector is expected to grow

stronger than GDP growth in the next five years driven by changing

lifestyles, increase in income and favorable demographic outline. Food

and apparel retailing are key drivers of growth.

Rural retailing is still unexploited Indian market.

It can become one of the largest industries in terms of numbers of

employees and establishments.

Indian retail industry has come forth as one of the most dynamic and

fast paced industry with several players entering the market.

Threats of modern retail

One of the greatest barriers to the growth of modern retail formats are

the supply chain management issues. No major changes are needed in

the supply chain for FMCG products; these are well developed and

efficient. For perishables, the system is too complex. Government

regulations, lack of adequate infrastructure and inadequate investment

are the possible bottlenecks for retail companies. The supply chain for

staples is less complicated than the net groceries. But staples have a

unique problem of non- standardization.

Organized retailing in India is yet to get an industry status.100%

Foreign Direct Investment (FDI) is not permitted in retailing in India.

Ownership of retail chain is allowed only to the extent of 49% but

without FDI, the sector is deprived of access to foreign technologies

and faster growth.

Lack of uniform tax system for organized retailing is also one of the

obstacles. Inadequate infrastructure is likely to be an obstacle in the

growth of organized retails.

The unorganized sector has dominance over the organized sector in

India because of low investment needs.

Labour rules and regulation are also not followed in the organized

retails. The sector is unable to employ retail staff on contract basis.

Problem of car parking in urban areas is serious concern.

Difficult to target all segments of society.

Emergence of hyper and super markets trying to provide customer

with –value, variety and volume.

Heavy initial investment is required to break even with other

companies and compete with them.

Retail today has changed from selling a product or a service to selling

a hope, an aspiration and above all an experience that a consumer

would like to repeat.

Retail chains are yet to settled down with proper merchandise

mix for the mall outlets. Retailing today is not about selling at the

shop, but also about researching and surveying the market, offering

choice, competitive prices and retailing consumers as well.

Contribution to the Indian economy

The effects of retail on Indian economy are:

Employment Generation

Retailing provides employment to making 8% workforce in India, because it

is highly labour intensive. It has also patented to generate an additional

eight million jobs, direct and indirect.

Development of small scale units

Retailing also helps small scale units to easy access market. They provide a

platform for small scale unit’s goods. Retailing in India support 4 lakh plus

medium handcraft manufacturers.

Growth of real estate

The requirement of space is one of the biggest demands, so the real estate

has also grown over the last years. In the years to come Indian economy will

also see the real estate sector climbing the steps of organized retail estate

sector.

Future prospect in retail business

FDI helps to meet the global economies, societies and domestic

players to a closely integrative traditional village i.e. one is for all and

all for one.

Division of labour, specialization, developing competition and

innovation lead to economic growth.

Liberalization of trade and cross border mergers and joint ventures has

also driving forces.

A significant size in the organized retail and is expected to grow from

3% to50% in the coming year.

Technology, management, expertise, market intelligence are also

some of the opportunities to domestic business.

STORY OF PRIVATE LABEL The Evolution of Private Label Branding

Overview

The definition of private label branding has evolved significantly over time.

Some would argue the term “private label” is a misnomer of great

proportions. There is no question that the words “private label”

acknowledges the birth, history and existence of generic and store brands.

Yet, the term does not adequately capture the extent to which private label

has progressed. Today's retail marketers are managing their proprietary

brands with the same combination of care and innovation as manufacturers

of national brands.

In recent years, retailers have been liberating themselves from the

traditional definition of private label marketing as being the poor relative of

national brand consumer goods, and, in doing so, opening up huge

opportunities for private label branding. These opportunities require the

adoption of a different set of marketing and branding practices to support

and propel the retailer’s business and marketing ideals for its private label

brands.

The key to successful marketing management for today’s retailers is to

understand the contribution and role of their proprietary or “own” brands in

the long-term business strategy and marketing mix of the retail store and

consider both the supply side and the demand side of the equation. Effective

category management can enable retailers to solidify and optimize supply-

chain relationships. Strategic brand management goes hand in hand with

these endeavors to establish sustainable points of difference in each aisle

and segment within the store. It also spurs decisions about how to

appropriately define the retailer’s “own” brand portfolio in order to galvanize

consumers to connect and reconnect with its franchise in a compelling

manner.

Historical Marketplace Dynamics

Private label brands were traditionally defined as generic product offerings

that competed with their national brand counterparts by means of a price-

value proposition. Often the lower priced alternative to the “real” thing,

private label or store brands carried the stigma of inferior quality and

therefore inspired less trust and confidence. Yet, they still grew and

prospered by providing consumers lower priced options for what was often a

low involvement purchase decision. Retailers continued to push more and

more private label products into different categories of the marketplace

because they represented high margins and the promise of profitability with

little to no marketing effort.

Over the years, this proliferation of private label offerings perpetuated a

myopic approach to private label brand management. Previously successful

yet, currently flailing private label brands clued today’s retailer into some

important pitfalls to avoid in proprietary brand portfolio management. Most

importantly, these examples underscore a need for private label marketers

to be cognizant of how their initiatives play a role in the overall marketing

mix and the long-term definition and impact of their portfolio.

Historically, private label retailers appreciated that it was important to tout

certain category and product benefits to incite consumers to purchase. Yet,

rather than look at the consumer directly to understand his brand and

product selection criteria, they took their cues from the national brand

competitors that had already identified and manifested some of the

category’s salient attributes and benefits through advertising, packaging and

other brand messaging. The result was often a series of “me-too” private

label positioning that strived to emulate the category leader.

This approach to private label management had resounding impacts on a

category as a whole as well as the individual product offerings within it. By

commoditizing their private label products, retailers undermined and

commoditized a category’s overall potential. They adopted the role of the

omnipresent, cheaper choice and often forced branded competition to lower

their prices to compete, thereby erasing margins for national products and

private label alike. It also created missed opportunities for all category

players (manufacturers, suppliers or retailers), since they were not

considering latent or untapped consumer needs that their category had the

ability to fulfill.

A New Approach to Private Label Branding

In order to be truly successful, retailers must advance from the generic or

store brand mindset of the past to a new private label paradigm. Many

retailers have begun to describe their private label brands as “own” brands

because there is recognition that these proprietary, exclusive offerings are

tools that represent momentous power and potential for the retail store.

The term “own” brands acknowledges that today’s visionary retail marketers

have powerful proprietary portfolios that they control and manage and there

is potential to reap bigger and better rewards by taking a closer look at the

way they orchestrate the role and expression of these brand offerings in the

eyes of consumers in each product category. Those retailers who appreciate

the magnitude of this brand opportunity have created a new industry

standard in their realm of influence and activity.

“Own” brands are articulated and developed in a way that they not only fit

with the brand promise of the retail store, but if effective, they also give

consumer drivers a key point of departure to enhance and celebrate the

overall retail brand proposition to keep consumers coming back for more.

Implications for Retail Marketers

1) Collaborative category management is vital. Strategic category

management is instrumental for a retailer to realize its “own” brand goals

and aspirations. It requires the development of a symbiotic relationship with

manufacturers and/or suppliers to elevate relationships and further a

mentality of partnership.

Contrary to the previous mindset of private label management, this approach

does not commoditize the manufacturers' brands by offering a comparable

product at a significantly lower price point. This would undermine the value

inherent in the whole category and lower margins overall.

In this new way of thinking, the retailer and trade partnership becomes more

about cooperation and less about the retailer negotiating with the

manufacturer or supplier on price and listings. By working together, the

parties involved can solidify trade relationships and ensure that the category

as a whole remains profitable and emotionally appealing to the customer so

that both private label and branded goods win.

In the spirit of effective category management, there should be collaboration

in understanding and deciding how to optimize the product lines and SKUs

that will progress the category definition as a whole and determine plan

grams and shelving scenarios to rally the greatest degree of category

interest and excitement from consumers.

2) Recognize that a salient consumer need should be the

springboard for an “own” brand proposition.

The “own” brand promise should be defined as a holistic representation of

resonant functional and emotional attributes and benefits. This ensures that

it takes into account need states that are important to consumers and offers

a credible point of difference from other category players.

By crystallizing a differentiated value proposition, an effective “own” brand

considers the approach that national brands use to arrive at a holistic benefit

proposition rather than the specific positioning they use. This furthers an

“own” brand promise that has been informed by the competition, but is

clearly not a “me-too” expression. It is also successful because it

demonstrates a commitment to offer consumers multiple options and

varieties with distinct attributes, benefits and price points.

3) Do not underestimate your power to leverage and own the

consumer connection.

A successful “own” brand literally has the ability to own the consumer

connection. If it is broadly defined, it has the capacity to strike a chord with

consumers in multiple product categories.

Unlike national branded products, “own” brands are exclusively available

through a specific retailer and can often transcend specific product

categories because they use a consumer focus rather than a product focus

as their brand foundation.

They have the potential to be magnets that draw consumers into one specific

retail store over another. Take Wal-Mart’s success with its exclusive brands

like Ol’Roy for dog food or Reli-On for diabetes. These brands inspire such

trustworthiness and allegiance from their loyal consumers that Wal-Mart is

their pre-meditated retail source whether they are running low on dog food

or diabetes medication.

The exclusive brands may be the reason that consumers are initially drawn

into the store, but once they are there, Wal-Mart also has the opportunity to

encourage them to spend more on incidental or impulse purchases.

Therefore, exclusive or “own” brands not only reinforce enduring loyalty and

positive feelings for the overarching retail brand, they often enable the

retailer to capture a more significant share of the consumers’ wallet, heart,

mind and lifestyle than a national product brand.

4) Optimize and promote synergies of the points of touch you own

and influence.

Retail marketers are becoming more cognizant of how various aspects of

their “own” brand marketing mix work together to create a strong,

consistent brand message.

By developing store environments, in-store messaging like signage,

merchandising systems, and packaging as well as external messaging like

circulars, catalogs and advertising in a congruent manner, the retailer is able

to create an enduring impression in-store, at shelf, at the time of purchase

and during usage.

Many of these brand expressions do not require revolutionary change for

extended periods of time, so they perpetuate an eloquent branded voice

because of strategic integration rather than constant investment and

reinvestment.

5) Strike the right balance of similarities and differences with brand

messaging and portfolio offerings.

Brand architecture is a critical consideration for “own” brand marketing.

Once the brand proposition is solidified, the brand architecture strategy

enables decision makers to promote this promise at the retail store level in

order to engender a sense of familiarity, recognition and trust.

At the same time, “own” brands tend to straddle a broader set of aisles than

national brands. Because of this, it becomes more and more important to

differentiate an “own” brand’s attributes and benefits on an aisle, category

and product basis.

For instance, when shopping at a drugstore, the consumers’ purchase

decision pathway in the over-the-counter cough and cold care category is

quite distinct from their drivers in the paper goods category. Brand

architecture and design expression can help the consumer navigate the

breadth of the “own” brand portfolio and understand its depth of expertise in

different areas of the store.

6) Calibrate the “own” brand promise and the proof in the product.

It is important to consider how package design, nomenclature and product

strategy can propel and support the retail marketer’s vision for the “own”

brand promise.

Re-branding efforts often go hand in hand with packaging redesign and sub-

branding initiatives. These are critical tools that help to visualize and

verbalize what the “own” brand stands for and demonstrate its expertise and

points of difference in various product categories. These brand executions

are the vehicles through which “own” brands deliver on category-mandated

functional and emotional virtues, spurring consumers to select the retailer’s

brand over others.

However, decorative packaging and product names are not enough for

today’s sophisticated shopper. The packaging may be the reason that a

consumer picks a specific item off the shelf, but if the product does not live

up to his anticipations in use, he will be less inclined to repurchase.

Product quality and innovation are a necessary functional underpinning for

an “own” brand offering. This is the reason that re-branding efforts are often

synchronized with product portfolio rationalization. By undergoing quality

assessments, the retailer is able to ensure that its products live up to

consumers’ expectations and that negative consumption experiences do not

undermine the brand promise that is being developed and executed.

The Growth of Private Labels

Private labels are slowly gaining prominence at big retail stores. They have

almost all the elements of a big label—a brand name and exclusivity. Maybe

they lack a few things, like a big advertising budget and a sporty price tag.

But still, they are big and are here to stay. In fact, chances are that they

comprise nearly 40% of your shopping bags while you shop at retail outlets

like Westside, Shoppers Stop, Reliance Fresh, and Big Bazaar and so on.

Be it Tata’s Westside, Kishore Biyani’s Big Bazaar or RPG Group’s Spencer’s,

everyone is betting big on private labels for they are fast becoming one of

their major revenue spinners. So what makes you buy them, knowingly or

unknowingly? What makes the retailers go all the way to launch and

maintain these brands? What makes these brands successful despite no

advertising?

How big are the private labels?

Private labels, often referred to as in-house brands or store brands, are those

that are owned by the retailers themselves. For example, Shoppers Stop has

several in-house brands such as STOP, Kashish, LIFE, Vettorio Fratini, Elliza

Donatein and Acropolis. Reliance Fresh sells grocery such as pulses, rice,

tea, noodles under the Reliance Food brand and the dairy products such as

its curd is sold under the Dairy Life brand.

According to a FICCI-Ernst & Young 2007 report, as quoted in The Marketing

Whitebook 2009-10, the retail sector in India was worth $280 billion, of which

organized retail comprised 5% at $14 billion. In an ASSOCHAM-KPMG joint

study, the size of the retail industry was pegged at $353 billion in 2008. It

was estimated to grow to $410 billion by 2010, of which organized retail

would value approximately $51 billion.

According to Images Retail Report 2009, as quoted in "Indian Retail: Time to

Change Lanes" by KPMG; private label brands constitute 10-12% of

organized retail in India. Of this, the highest penetration of private label

brands is by Trent at 90%, followed by Reliance at 80% and Pantaloons at

75%. Big retailers such as Shoppers Stop and Spencer’s have a penetration

of 20% and 10% respectively. Globally, store brands constitute nearly 17% of

retail sales. In fact, international retailers such as Wal-Mart and Tesco have

40% and 50% of in-house brands in their stores.

Store brands: An overview

In India, the growth of private labels has been phenomenal and is slowly

gaining more store space. Aditya Birla Retail, which operates the ‘More for

You’ food and grocery chain, is reportedly pursuing strategies to increase its

private label sales from the current 3% to 10-15% of total sales in the next

two to three years.

Store space: Nearly 40-50% of the store space was dedicated to store

brands. These products shared the shelf space with other branded products.

For example, in the Reliance store, its curd brand Dairy Life was placed next

to the other brands, such as Amul.

A number of store brands: This is especially true for apparel. Shoppers

Stop has several in-house brands. For example, in the women’s wear

category itself it has STOP, Kashish, Remika etc. Similarly, in the men’s

wear category, it has STOP, Life, Vettorio Fratini, and so on. These products

are not differentiated from the other brands in terms of store space.

Price tag: These products were priced substantially lower than the other

brands. For example, Reliance’s tea brand sported a price tag of Rs 118 for

500 gms, whereas Brooke Bond, which was placed just next to it, was

available for Rs 132 for 490 gms.

Catered to a number of categories: In these stores, the store brands

were not limited to a particular category. For example in Shoppers Stop, it

extended from apparel for men, women and children to crockery,

kitchenware, and even furnishings. Similarly, in a Reliance store, it extended

from pulses to spices, noodles and even dairy products.

How do in-house brands work?

For a retailer, there are several advantages of introducing in-house brands in

their portfolio. Atulit Saxena, COO of Future Brands, explains, “Traditionally,

private brands worldwide were always conceived to take on category

leaders. If we are talking about soaps for instance, you might have 15-20

soaps, but as a large organized modern retail player, you might want to

create your own trademark in your store, which is of the same quality, but at

a price that is substantially lower.” This also becomes the differentiating

factor for a retailer, as these brands are exclusively available at that retail

outlet only. So a customer, for example, may want to revisit the store if they

find the quality comparable to others at a more affordable price point.

As these brands create an identity for the retailer, there is a lot of work that

goes into the pre-launch phase.

The quality of the products is also of big concern due to obvious reasons.

However, these products have not been able to shrug off the tag of inferior

brands. The designs are both done in-house and are outsourced as well. For

example, while Shoppers Stop frequently ties up with young designers,

Pantaloons believes in having its own in-house designers.

“Private labels are highly profitable. The profits earned from them

are almost double than those from the third -party brands.”

This brings us to the point—the core strength of the retailers is retailing and

not designing and manufacturing products. 100% of our manufacturing is

outsourced. There are fairly well-established manufacturers who work with

retailers. So is there any opportunity for entrepreneurs in tying up with these

players for manufacturing these products?

Five years back, private label brands were around 17.5% in terms of sales

and today they are almost 22.5%—a 5% increase.

The road ahead

Private labels are slowly becoming the protagonist in the big Indian retail

growth story. Taking cue from the West, Indian retailers are also churning

out newer ways to increase their profit margins—one such initiative is the

introduction of in-house brands. With Indian customers increasingly

accepting these private label brands, they would soon be major contributors

to the profits of Indian retailers.

Advantages of Private Label Brands

Since manufacturers' (producers') brands have large advertising

expenditures built into their cost, a private labeler is able to buy the

same goods at a lower cost and thus sell them at a lower price and/or

at a better profit margin.

Private labelers have more control over pricing and are able to

advantageously display their own brands for maximum impact. For

example, a grocery store can quickly reduce the price of its own PLB in

order to meet or beat a competitor's price. Or the grocery store can

create a special point-of-purchase advertising display and/or give its

brand predominant shelf space in order to boost sales.

PLBs are usually priced lower than comparable manufacturers' brands

and therefore appeal to bargain-conscious consumers.

Potential to increase store loyalty, chain profitability, control over shelf

space, bargaining power over manufacturers.

Among consumers, one obvious reason for their popularity and growth

is their price advantage (averaging 21%) over national brands.

Disadvantages of private label

1. It takes time to work up your private label with the right quality coffee.

While that is not terribly difficult, you can simply opt to have the supplier

pack one of his standard blends in your graphics.

2. Because no one else is handling your product it will have to be packed to

order, requiring some lead time from the day of order to the day of delivery.

This requires at least a bit more organizing and control of inventory than

would be necessary in purchasing the national branded, though of course it

guarantees freshness.

3. The private label roaster may have his own imperatives in terms of

production, with your order being shoved aside in favor of his own

customers' needs.

4. Although the cost of your coffee will be substantially less when bought

from a good private label supplier there will, of course, be little "help" in

marketing the product by that supplier. The selling of your own product is

likely to be entirely in your own hands.

Commercial objectives behind launching private labels

There are certain objectives that a retailer has in mind before getting into

private label goods. Figure 2 lists the benefits that a retailer expects from

the in-store brands.

Higher Margins

Private label goods are cheaper to produce than branded goods. Besides,

due to the lack of advertising and marketing expenses they provide double

advantage to the retailer when it comes to the profit margins. While majority

of branded goods provide margins in the range of 6-12%, private label goods

can offer margins up to 40%. Not only they give a higher margin to the

retailers, private labels have also changed the balance of power between

brand manufacturers and retailers, giving the latter a decided advantage

when negotiating terms with the brand manufacturers.

Stronger Customer Loyalty

As the private label offerings increase and the quality is assured, a high

sense of loyalty is cultivated among its customer base. This customer loyalty

is the result of an affinity with the retailer brand which implies that the

development of private label brands can tangibly enhance the retailer‘s

brand itself. So in the long run, the private labels become an important tool

for the retailer to establish its positioning and strategically attract the target

customers to its outlet. Numerous studies have also shown that private label

buyers are more store-loyal and not as easily influenced as brand buyers.

Differentiation

Through private labels, retailers get a chance to bring in unique products in

their supply chains that have not been branded before. So if a retailer can

cater to the local tastes and preferences of the consumers well by top quality

private labels then they can differentiate themselves from other stores and

become destination stores. In effect, it‘s a win-win situation even for the

producers who get a chance to display their produce.

Freedom with Pricing Strategy

A retailer promoting a private label has the added benefit of greater freedom

to play with pricing strategies, as a result of which these are overall cheaper

than brand leaders. For instance, in USA, some private labels are 25 percent

cheaper than leading brands. In addition, since it is an own private label, the

retailer has the freedom to create its own marketing strategy and have more

control over its stock inventory. This command of all the stages that a

product goes through, gives the retailer high flexibility in pricing.

Positioning during economic downturns

The growth of private labels is likely to continue in the current financial

environment as cash-strapped consumers' perception of the products as a

cheaper option changes. The price advantage of private labels leads to the

belief that these score in times of economic meltdown, and further that this

newly-acquired market share is maintained even as the recession swings

out. Even after the economy bounces back, consumers will naturally

gravitate towards products marked at lower prices yet offering the same

quality, especially where the retail name is a trusted national or regional

player.

Statement of research

objectives

To get the knowledge about the perception towards the private label.

What are the factors that affect the perception of the customer?

To draw conclusion based on the behavior of the consumer.

To know the differences in perception among different locality.

RESEARCH

METHODOLOGY

Research Methodology is ways to systematically solve the problem. The

Research Methodology includes the various methods and techniques for

conducting a Research.” Marketing Research is the systematic design,

collection, analysis and reporting of data and finding relevant solution to a

specific marketing situation or problem”. D.Slesinger and M. Stephenson in

the encyclopedia of social sciences define Research as “the manipulation of

things, concept or symbols for the purpose of generalizing to extend, correct

or verify knowledge, whether that aids in construction of theory or in the

practice of an art.”

Research is, thus an original contribution to the existing stock of

knowledge making for its advancement. The purpose of research is to

disco0ver answer to the question through the application of scientific

procedures. Our project has specified framework for collecting data in an

effective manner. Such framework is called” RESEARCH Methodology”. The

research process followed by me consists of following steps:

1. Defining the problem and research objective: It is said, “A

problem well defined is half solved”. The step is to define the problem

under study and deciding the research objective. The objective of my

research is to know the consumer perception towards private label in

comparison with manufacturing brands.

2. Development the research plan: the second of this study consists

of developing the most efficient plan for gathering data.

3. Sampling plan- A sample plan is a definite plan for obtaining a

sample from a given population. It refers to the technique or the

procedure the researcher would adopt in selecting sample items for the

sample. Sample plan may as well lay down the number of items to be

included in the sample. i.e. he size of the sample. The plan helps in

decision making in the following areas.

Universe: All customers of private label (Croma) and manufacturing

brands (LG) constitute the universe.

Sample size: this refers to the number of items to be selected from

the universe to constitute a sample. The size of sample should neither

be excessively large, nor too small, it should be optimum. The sample

size for my study is 50

Sampling procedure: It is a way through which sampling is done.

There are various procedures like random, systematic etc. The sampling

procedure for my study is convenience sampling.

Research design: Descriptive in nature.

4. Data collection: information will be collected from both primary

and secondary data.

Primary sources: Primary data are those which are collected afresh

and for the first time. I have collected primary data by conducting

survey through Questionnaire, which includes both open ended and

close-ended Questions.

Secondary sources: Secondary data are those which already been

collected by someone else and which already had been passed through

the statistical process. I have collected secondary data has been

collected through Magazines, Web sites, and Newspaper.

5. Analysis of data and interpretations: After collection of date

the analysis of data has been done through various statistical tools

and techniques. The analysis of data required a number of closely

related operations such as establishment of category, the

application of these categories to raw data through coding,

tabulation and then drawing statistical inferences.

Research Limitations

1. Due to constraints of time & financial resources, the scope of study is

limited to few customers of Greater Noida, Noida Delhi (NCR) only.

2. Smaller sample may not always give better results. Sample may not be

true representative of the whole population.

3. The possibility of biased responses is ruled out.

4. Lack of availability of full information.

5. Sometimes customers are not willing to give response.

DATA ANALYSIS AND

INTERPRETAIONS

Q.1. Do you know about the Private labels?

Responses No. of Respondents Respondents in %Yes 35 70No 0 0Little bit 15 30

Total 50 100

70

30

Level of awareness

YesLittle bitNo

Interpretation: As the result shows that 70% know about the private

label and 30 % know something about the private label. So we can say that

people have much awareness about the private label.

Q.2. What do you think about Private label?

5050

Perception about Private Label Brands

Out sourced from other com-panies (mainly Local)Manufactured by retailers which sell them

Interpretation: As the result display 50% people think that private label

is outsourced from other companies (mainly local) and rest 50% thinks that

private label is manufactured by retailers which sell them.

It shows consumer perception towards the private label. It indicates that

they have good knowledge about private label.

Q.3. Which age groups do you belong?

Responses No. of Respondents Respondents in %18-25 25 5025-40 15 30

Responses No. of Respondents Respondents in %Out sourced from other companies (mainly Local)

25 50

Manufactured by retailers which sell them

25 50

Total 50 100

40-55 10 2055 & above 0 00Total 50 100

18-25 25-40 40-55 55 & above05

101520253035404550

50

30

20

0

Respondents in %

Respondents in %

Interpretation: Most of the respondents are of 18-25 and 25-40 age

group. It shows that young people have much interested in purchasing in

comparison with older one.

Q.4. Which income Group do you belong? (Monthly income)

Responses No. of Respondents Respondents in %5000-10000 10 2010000-20000 15 3020000-30000 15 3030000 & above 10 20Total 50 100

5000-10000 10000-20000

20000-30000

30000 & above

0

5

10

15

20

25

30

20

30 30

20

Respondents in %

Respondents in %

Interpretation: This graph tells us that 30% of respondents having

income between 20000 and 30000. 30% of respondents having income

between 10000 and 30000.

Q.5. which one of these do you prefer for purchasing product?

Responses No. of Respondents Respondents in %Private labels 20 40

Manufacturing Brands 30 60

Total 50 100

Private labels Manufacturing Brands0

10

20

30

40

50

60

40

60

Respondents in %

Respondents in %

Interpretation: 40% of the respondents prefer PLBs while 60% of the

respondents prefer national level brands. Thus, it can be seen that there is

not a major difference in the preference of customers for PLBs vis-à-vis

national level brands.

Q.6. Which type of Customer you are?

Responses No. of Respondents Respondents in %Regular 25 50

Seasonal 10 20

Occasional 15 30

Total 50 100

Regular Seasonal Occasional 05

101520253035404550

50

20

30

Respondents in %

Respondents in %

Interpretation: 50% customers are regular in nature. 20% are of

seasonal in nature. 30% are of occasional in nature.

Q.7. What do you think about the Quality of good?

Grade: 1-Poor 2-Fair 3- Good 4- Very Good 5-Excellent

Grade Poor Fair Good Very Good ExcellentManufacturing

Brand

0% 0% 10% 70% 20%

Private Brand 0% 20% 60% 10% 10%

Poor Fair Good Very Good Excellent0%

10%

20%

30%

40%

50%

60%

70%

80%

0% 0%

10%

70%

20%

0%

20%

60%

10% 10%

Manufacturing BrandPrivate Brand

Interpretation: If we compare both it can be conclude that respondents

have much more faith on the quality of manufacturing brands rather than

private brands.

Q.8. What do you think about price relevancy?

Grade: 1-Poor 2-Fair 3- Good 4- Very Good 5-Excellent

Grade Poor Fair Good

Very Good Excellent

Manufacturing

Brand

0% 20% 30% 30% 20%

Private Brand 10% 20% 50% 10% 10%

Poor Fair Good Very Good Excellent 0%

10%

20%

30%

40%

50%

60%

0%

20%

30% 30%

20%

10%

20%

50%

10% 10%

Manufacturing BrandPrivate Brand

Interpretation: According to the graph it can be depicted that there is

no huge difference in the price relevancy in manufacturing brands and

private brands. People have faith on the price of the product but when we

compare both we find that customer trust more on manufacturing brand’s

price.

Q.9. what comes first in your mind when you want to purchase a product?

Grade: 1-Poor 2-Fair 3- Good 4- Very Good 5-Excellent

Grade Poor Fair Good

Very Good Excellent

Brand Name 0% 20% 10% 50% 20%

Price 0% 20% 50% 20% 10%

Quality 0% 0% 0% 50% 50%

Past Experience 0% 10% 20% 30% 40%

Service 0% 0% 0% 60% 40%

Poor Fair Good Very Good Excellent 0%

10%

20%

30%

40%

50%

60%

70%

0%

20%

10%

50%

20%

0%

20%

50%

20%

10%

0% 0% 0%

50% 50%

0%

10%

20%

30%

40%

0% 0% 0%

60%

40% Brand NamePriceQualityPast ExperienceService

Interpretation: According to the graph it can be said that customers

more focus on quality and service and least focus on price.

Q.10. Which of these factors influencing in purchasing of product?

Grade: 1-Poor 2-Fair 3- Good 4- Very Good 5-Excellent

Private Label

Grade Poor Fair Good

Very Good Excellent

Perceived Quality 0% 30% 10% 30% 30%

Price charged 0% 50% 20% 20% 10%

Trust in brand 0% 20% 20% 30% 30%

Packaging 0% 40% 30% 20% 10%

Availability of Alternatives

0% 20% 30% 20% 30%

Sales promotion 20% 10% 30% 10% 30%

Advertising 0% 10% 20% 30% 40%

Perceiv

ed Q

uality

Price c

harged

Trust

in brand

Packag

ing

Availa

bility o

f Alte

rnati

ves

Sales

promotion

Adverti

sing

0%

10%

20%

30%

40%

50%

60%

0% 0% 0% 0% 0%

20%

0%

30%

50%

20%

40%

20%

10% 10%10%

20% 20%

30% 30% 30%

20%

30%

20%

30%

20% 20%

10%

30%30%

10%

30%

10%

30% 30%

40%

PoorFairGoodVery GoodExcellent

Manufacturing Brand

Grade Poor Fair Good

Very Good Excellent

Perceived Quality 10% 0% 20% 30% 40%

Price charged 0% 10% 60% 20% 10%

Trust in brand 0% 0% 20% 30% 50%

Packaging 0% 30% 0% 40% 30%

Availability of Alternatives

0% 10% 10% 60% 20%

Sales promotion 0% 10% 60% 10% 20%

Advertising 0% 10% 10% 50% 30%

Perceiv

ed Q

uality

Price c

harged

Trust

in brand

Packag

ing

Availa

bility o

f Alte

rnati

ves

Sales

promotion

Adverti

sing

0%

10%

20%

30%

40%

50%

60%

70%

10%

0% 0% 0% 0% 0% 0%0%

10%

0%

30%

10% 10% 10%

20%

60%

20%

0%

10%

60%

10%

30%

20%

30%

40%

60%

10%

50%

40%

10%

50%

30%

20% 20%

30%PoorFairGoodVery GoodExcellent

Interpretation: For private label the customer’s main focus on trust in brand and advertising and least focus on packaging and sales promotion. For manufacturing brands customer more focus on trust in brand and advertising and price charged and sales promotion. When we compare both we finds that advertisement attract customers equally for private label and manufacturing brands.

Q.11. which one of these is effective marketing techniques?

Grade: 1-Poor 2-Fair 3- Good 4- Very Good 5-Excellent

Private Label

Grade Poor Fair Good

Very Good Excellent

Pamphlet 20% 40% 20% 10% 10%

Billboard 0% 40% 40% 20% 0%

Word of mouth 0% 20% 20% 40% 20%

Television 10% 0% 30% 30% 40%

Newspaper 0% 0% 50% 30% 20%

Magazines 10% 10% 30% 40% 10%

Internet 10% 10% 10% 40% 30%

In-store Promotion

0% 10% 20% 20% 50%

Pamphlet

Billboard

Word

of mouth

Telev

ision

Newsp

aper

Magazi

nes

Internet

In-store

Promotion

0%

10%

20%

30%

40%

50%

60%

20%

0% 0%

10%

0%

10% 10%

0%

40% 40%

20%

0% 0%

10% 10% 10%

20%

40%

20%

30%

50%

30%

10%

20%

10%

0%

20%

40%

20%

10%

30%

50%

PoorFairGoodVery GoodExcellent

Manufacturing Brand

Grade Poor Fair Good Very Good ExcellentPamphlet 20% 30% 10% 10% 30%

Billboard 0% 30% 50% 10% 10%

Word of mouth 0% 0% 20% 50% 10%

Television 0% 0% 20% 30% 50%

Newspaper 0% 0% 30% 40% 30%

Magazines 0% 10% 30% 40% 20%

Internet 0% 0% 10% 50% 40%

In-store Promotion 0% 10% 20% 30% 40%

Pamphlet

Billboard

Word

of mouth

Telev

ision

Newsp

aper

Magazi

nes

Internet

In-store

Promotion

0%

10%

20%

30%

40%

50%

60%

20%

0% 0% 0% 0% 0% 0% 0%

30% 30%

0% 0% 0%

10%

0%

10%10%

50%

20% 20%

30% 30%

10%

20%

10% 10%

50%

30%

40% 40%

50%

30%30%

10% 10%

50%

30%

20%

40% 40%

PoorFairGoodVery GoodExcellent

Interpretation: For private brand in-store promotion and television are the most effective and pamphlet and billboard are least effective. For manufacturing brand television, internet and in store brands are most effective and pamphlet and billboard are least effective. When we compare both we find out that private label apply, to the some extent, similar type of marketing techniques.

Q.12. who influence you more for purchasing product?

Grade: 1-Poor 2-Fair 3- Good 4- Very Good 5-Excellent

Private Label

Grade Poor Fair Good

Very Good Excellent

Friends 10% 30% 50% 0% 10%

Family 10% 30% 40% 20% 0%

Sales personnel 0% 40% 60% 0% 0%

Store atmospheric

0% 20% 40% 30% 10%

Past experience 0% 20% 0% 40% 40%

Sales promotion 0% 20% 50% 10% 20%

Advertising 10% 40% 30% 0% 20%

Frien

ds

Family

Sales

personnel

Store

atmosp

heric

Past ex

perien

ce

Sales

promotion

Adverti

sing

0%

10%

20%

30%

40%

50%

60%

70%

10% 10%

0% 0% 0% 0%

10%

30% 30%

40%

20% 20% 20%

40%

50%

40%

60%

40%

0%

50%

30%

0%

20%

0%

30%

40%

10%

0%

10%

0% 0%

10%

40%

20% 20%

PoorFairGoodVery GoodExcellent

Manufacturing Brand

Grade Poor Fair Good

Very Good Excellent

Friends 0% 10% 10% 50% 30%

Family 0% 10% 30% 40% 20%

Sales personnel 0% 10% 50% 40% 0%

Store atmospheric

0% 30% 0% 60% 10%

Past experience 10% 10% 10% 20% 50%

Sales promotion 0% 20% 20% 30% 30%

Advertising 0% 10% 10% 20% 60%

Frien

ds

Family

Sales

personnel

Store

atmosp

heric

Past ex

perien

ce

Sales

promotion

Adverti

sing

0%

10%

20%

30%

40%

50%

60%

70%

0% 0% 0% 0%

10%

0% 0%

10% 10% 10%

30%

10%

20%

10%10%

30%

50%

0%

10%

20%

10%

50%

40% 40%

60%

20%

30%

20%

30%

20%

0%

10%

50%

30%

60%

PoorFairGoodVery GoodExcellent

Interpretation: For private brand sales promotion and past experience are the most influencing factor and family and friends are least influencing factors. For manufacturing brands friends and advertising are most influencing factors and store atmospheric and sales personnel are least effective factors. When we compare both we find out that past experience of private label is better than the manufacturing brands.

FINDINGS

40% of the respondents prefer PLBs while 60% of the respondents

prefer national level brands. Thus, it can be seen that there is not a

major difference in the preference of customers for PLBs vis-à-vis

national level brands.

Most of the respondents are of 18-25 and 25-40 age group. It shows

that young people have much interested in purchasing in comparison

with older one.

50% of the respondents perceive PLBs to be goods that are outsourced

from other companies (mainly local) and sold under the retailer’s name

while 50 % of the respondents perceive PLBs to be goods which are

manufactured by retailers selling them.

As the result shows that 70% know about the private label and 30 %

know something about the private label. So we can say that people

have much awareness about the private label.

If we compare both it can be concludes that respondents have much

more faith on the quality of manufacturing brands rather than private

brands.

According to the graph it can be depicted that there is no huge

difference in the price relevancy in manufacturing brands and private

brands. People have faith on the price of the product but when we

compare both we find that customer trust more on manufacturing

brand’s price.

According to the graph it can be said that customers more focus on

quality and service and least focus on price.

For private label the customer’s main focus on trust in brand and

advertising and least focus on packaging and sales promotion. For

manufacturing brands customer more focus on trust in brand and

advertising and price charged and sales promotion. When we compare

both we find that advertisement attract customers equally for private

label and manufacturing brands.

For private brand in-store promotion and television are the most

effective and pamphlet and billboard are least effective. For

manufacturing brand television, internet and in store brands are most

effective and pamphlet and billboard are least effective. When we

compare both we find out that private label apply, to the some extent,

similar type of marketing techniques.

For private brand sales promotion and past experience are the

most influencing factor and family and friends are least

influencing factors. For manufacturing brands friends and

advertising are most influencing factors and store atmospheric

and sales personnel are least effective factors. When we compare

both we find out that past experience of private label is better

than the manufacturing brands.

RECOMMENDATIONS

AND CONCLUSION

Recommendations

In this study, we examined how Indian customers perceive PLBs in

comparison to national label brands.

The findings of the study can be useful to retailers in formulating

strategies to make products other than the national branded ones

acceptable in the market.

An analysis of perception and satisfaction with PLBs can furthermore

help retailers in developing stronger store/PLBs and in increasing their

presence and acceptance in the market.

The findings of the present study provide important insights to all

private label manufactures in India to increase their foothold and

successfully compete in the Indian retail market.

A difference in pricing is desired and companies needs to fine tune and

concentrate more on their supply chain and logistics to bring down

costs associated with various products which they can pass on to

customers in the form of reduced prices in turn leading to increase in

customer satisfaction and acceptance of PLBs.

CONCLUSION

In conclusion it can be said that if private label manufacturers can

consistently provide value to customers on factors rated high by customers

and even if it is low on status symbol, there is a high possibility for them to

establish these brands as acceptable in the minds of customers and to

improve customers’ perception regarding the same. Though this perception

may not be as high as a branded product enjoys but it could still become

high enough for retailers to increase the sales of these brands and thereby

raise their profit margin considerably.

Customers are now ready to accept the private label brands besides

the manufacturing brands. Customers are now quality and service oriented.

BIBILIOGRAPHYBooks

C.R. Kothari - Research Methodology –Methods and Techniques (second revised edition 2009)

Dr. S.L. Gupta and Sumitra Pal - Consumer Behavior (2002)

Websites

http://www.heritage-coffee.com/PrivateLabelvs.NationalBrands.htm

http://www.myarticlearchive.com/articles/9/173.htm

www.efqm.org/en/PdfResources/ Customer %20 Perception .pdf

http://wps.aw.com/aw_carltonper_modernio_4/21/5566/1424975.cw/content/index.html

http://www.tetonsands.org/docs/PrivateLabel.pdf

www.researchersworld.com/vol2/PAPER_15. pdf

http://www.iimahd.ernet.in/assets/snippets/workingpaperpdf/2008-02-04Abhishek.pdf

http://ebookbrowse.com/aithal-rajesh-an-exploratory-study-on-the-emergence-of-private-labels-in-the-india-pdf-d47433607

ANNEXURE

Questionnaire

NAME: GENDER:

OCCUPATION: Location:

Q.1. Do you know about the Private labels?

a) Yes b) Little bit c) No

Q.2. What do you think about Private label?

a) Out sourced from other companies (mainly Local)

b) Manufactured by retailers which sell them

Q.3. Which age groups do you belong?

a) 18-25 b) 25-40 c) 40-55 d) 55 & above

Q.4. Which income Group do you belong? (Monthly income)

a) 5000-10000 b) 10000-20000 c) 20000-30000 d) 30000 & above

Q.5. which one of these do you prefer for purchasing product?

a) Private labels b) Manufacturing Brands

Q.6. Which type of Customer you are?

a) Regular b) Seasonal c) Occasional

Direction to Q.7-12: You have to give rating according to you as given below:

1-Poor2-Fair 3-Good 4-Very Good 5-Exellent

Q.7. What do you think about the Quality of good?

a) Manufacturing Brand 1. 2. 3. 4. 5.

b) Private Label 1. 2. 3. 4. 5

Q.8. What do you think about price relevancy with the product?

a) Manufacturing Brand 1. 2. 3. 4. 5.

b) Private Label 1. 2. 3. 4. 5

Q.9. When you want to purchase a product. Which one have great chances to incline towards the product?

a) Brand Name 1. 2. 3. 4. 5.

b) Price 1. 2. 3. 4. 5.

c) Quality 1. 2. 3. 4. 5.

d) Past experience 1. 2. 3. 4. 5.

e) Service 1. 2. 3. 4. 5.

Q.10. How much chances of these factors influencing in purchasing of product?

Private Label

a) Perceived Quality 1. 2. 3. 4. 5.

b) Price charged 1. 2. 3. 4. 5.

c) Trust in brand 1. 2. 3. 4. 5.

d) Packaging 1. 2. 3. 4. 5.

e) Availability of Alternatives1. 2. 3. 4. 5.

f) Sales promotion 1. 2. 3. 4. 5.

g) Advertising 1. 2. 3. 4. 5.

Manufacturing Brand

a) Perceived Quality 1. 2. 3. 4. 5.

b) Price charged 1. 2. 3. 4. 5.

c) Trust in brand 1. 2. 3. 4. 5.

d) Packaging 1. 2. 3. 4. 5.

e) Availability of Alternatives1. 2. 3. 4. 5.

f) Sales promotion 1. 2. 3. 4. 5.

g) Advertising 1. 2. 3. 4. 5.

Q.11. which one of these is effective marketing techniques?

Private Label

a) Pamphlet 1. 2. 3. 4. 5.

b) Billboard 1. 2. 3. 4. 5.

c) Word of mouth 1. 2. 3. 4. 5.

d) Television 1. 2. 3. 4. 5.

e) Newspaper 1. 2. 3. 4. 5.

f) Magazines 1. 2. 3. 4. 5.

g) Internet 1. 2. 3. 4. 5.

h) In-store Promotion. 1. 2. 3. 4. 5.

Manufacturing Brand

a) Pamphlet 1. 2. 3. 4. 5.

b) Billboard 1. 2. 3. 4. 5.

c) Word of mouth 1. 2. 3. 4. 5.

d) Television 1. 2. 3. 4. 5.

e) Newspaper 1. 2. 3. 4. 5.

f) Magazines 1. 2. 3. 4. 5.

g) Internet 1. 2. 3. 4. 5.

h) In-store Promotion. 1. 2. 3. 4. 5.

Q.12. who influence you more for purchasing product?

Private Label

a) Friends 1. 2. 3. 4. 5.

b) Family 1. 2. 3. 4. 5.

c) Sales personnel 1. 2. 3. 4. 5.

d) Store atmospherics 1. 2. 3. 4. 5.

e) Past experience 1. 2. 3. 4. 5.

f) Sales promotion 1. 2. 3. 4. 5.

g) Advertising 1. 2. 3. 4. 5.

Manufacturing Brand

a) Friends 1. 2. 3. 4. 5.

b) Family 1. 2. 3. 4. 5.

c) Sales personnel 1. 2. 3. 4. 5.

d) Store atmospherics 1. 2. 3. 4. 5.

e) Past experience 1. 2. 3. 4. 5.

f) Sales promotion 1. 2. 3. 4. 5.

g) Advertising 1. 2. 3. 4. 5.