|Summary:||碩士 === 國立政治大學 === 經營管理碩士學程(EMBA) === 99 === Recent change in the consumer-based retail market trend has redefined consumers’ perception of the meaning of brand. War over brand equity between the manufacturer and the retailer has evolved to another level. As retailers’ private brand (PB) takes on a new concept, it is taking a toll at the manufacturer’s expense.
This research tries to identify the perception of private brand from three different perspectives: the manufacturer, the retailer, and the consumer. The consumer-based retailers’ PB equity survey data was analyzed for the difference in subjective perspective based on respondents’ gender, age, personal income, level of education, and occupation.
The result shows that 97.87% of the respondents recognize the brand identity of retailers’ PB. However, only 25% of the respondents are aware of the brand meaning and actually purchase PB products on a regular basis. 83.45% of the respondents answered positively on the future development of PB, but the majority still can’t accept the notion that retail prices for PB are higher than the manufacturers’ brand (MB).
Gender does not seem to be a factor in the consumer’s perception of PB. However, age does have a major influence on the acceptance of the PB for consumers. Although older respondents, 30-years old or older, recognize the competitiveness of PB products for their innovative capability, with the emotional connection and the brand loyalty toward MB, the group of 41-year-olds or older expressed reluctance to purchase more PB products in the future. Obviously brand equity of PB products has yet to develop brand relationship with older consumers to allure them into the shops. On the contrary, brand equity of the retailer shops itself does have a positive influence on the sales of PB products.
Consumers’ educational level has a negative effect on the degree of satisfaction in PB product innovation. Furthermore, contrary to general perception, consumers with higher income level registered a higher preference for the PB product as well.
Both of the two convenience stores (CVS) in this case study agree with the upward trend of the PB. In fact, in 2009, 7-ELEVEN and FamilyMart each grew an impressive 110% and 130% respectively in sales revenue of their PB products.
However, both CVS have very different innovation models in strategic thinking and positioning their stores. 7-ELEVEN focuses more on value innovation and uses pricing as differentiation tactic in the market. On the other hand, FamilyMart puts product innovation and uniqueness as its priority to attract consumers.
Manufacturers who choose to ignore the threat of PB may subject themselves to the high risk presented by the burgeoning of such products. One possible solution may be through OEM/ODM of PB for various retailers in order to diversify and minimize possible threats and risks. Production of manufacturers’ own brand and retailers’ private brand in a two-track manufacturing system may well be a strategic way to survive for manufacturers.
Consumers are aware of and have recognized the existence of PB in retailer stores. The idea of smart shopping has its own right on the value innovation of PB for the consumer. PB no longer represents cheap products in the retail market. As PB positions itself with higher retail prices, it will possess the brand equity and earn the price premium at the toll of MB.
Low pricing does not imply cheap quality but the elimination of excessively unreasonable price premium of a product. Pricing is important to brand development, but value should be the key in establishing the perception of brand quality. Affordable luxury is a value innovation of the PB that creates an irresistible value proposition to touch the heart of consumers.
Consumers have clearly perceived the brand value of the PB. Retailers are also aware of the advantages they have with the channel, the scale and scope of economy; as a result, they are vigorously preparing for the battle to redefine the meaning of brand. It is time for manufacturers to change their mindset and face the inconvenient truth of the competition over brand equity.
Manufacturers’ brand still has its own right, but the brand equity is no longer monopolized by them. Retailers’ PB has certainly become the strongest competition that manufacturers will need to confront now and in the near future.