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Propose a low-cost advertising/promotion/merchandising communication program to support this new program that begins with limited category coverage.

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Building a Powerful Private Label (Store) Branding Program.
NOTE: If you have limited knowledge about private label branding I would suggest reading data posted in the “Market Profile” and “Store Brand Facts” links in the private label brand’s trade association web site (https://www.plma.com/storeBrands/facts2020.html) Having a level of familiarity with the topic will help make sense of this assignment that calls on you to write a formal recommendation as you address several key areas.
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You are hired as a consultant to produce a recommendation on a new branding strategy for a private/store brand program for a major regional successful grocery store retailer. NOTE: The retailer has about 150 stores in a 6-state area. The retailer has been doing a wide variety of private label branding for the past 30 years, but the brands have lacked consistency in name, appearance, etc. Research shows a low level of consumer loyalty to the existing private label products, so the retailer is prepared to remove them if a new program that you develop is successful.
PRICING STRATEGY: The prior pricing strategy on all private label products has been to use a price of 12% below the price of the category leader. This helped generate slightly less than twice the profit per package versus the higher priced national brand.
For example, if gross profit for a 12-ounce bag of Folgers Coffee was 20 cents, then the 12-ounce bag of the private label product produced a gross profit of about 35 cents. However, the total store brand sales never exceeded 18% of any category—the average across all categories in the store is only 10%. These low levels of sales are the main reasons the retailer is open to the development of a new store branding program.
PRODUCT QUALITY: All existing store brands are capable of achieving an ‘average’ quality rating by consumers. This is acceptable to the retailer, so no change in product content is needed in this project.
CATEGORY SELECTION: The regional retailer wants the new program introduced in a few select categories that are most likely to be accepted by the consumer. Secondary product introductions would result about every 3-4 months in other categories that face higher levels of competition and/or consumer switching resistance. It is estimated that it would take 4 years to get all of the hundreds of private store brands changed.
Your recommendation should address these specific five areas (HINT: In addition to including an introduction and conclusion, having a sub-heading for each of these 5 areas is a good idea):
Provide an industry review, to tell how much private label branding has grown in the recent years and to show what other leading retailers are doing in the private / store brand arena (NOTE: Providing graphics of the store brands from other leading retailers often helps in this industry review).
Propose a single brand name or a variety of names for different product categories. Explain your rationale for the name(s) selected.
Propose 5 to 10 product categories that should be initially introduced (proposing close to 5 would be for very large industries while proposing close to 10 would include a few small / specialty industries). Provide rationale for the product categories selected. NOTE: The retailer does not want all products to be in one or two similar product areas—some diversity is desired.
Propose a pricing program relative to the average price of the category leader. Explain the reasoning for the pricing plan.
Propose a low-cost advertising/promotion/merchandising communication program to support this new program that begins with limited category coverage. The retailer plans to initiate a larger communications program after more private label products are introduced over the first year but the initial wave of products need solid coverage with very limited costs.
NOTE: You will use a few personal views, but most of this manuscript needs to be supported by quality data from the trusted literature. Providing multiple citations for some key issues is always better than having a single supporting source.
Here are a few articles and resources that might provide guidance (you should conduct more secondary research beyond this small list):
This link is from CPGmatters (Consumer Packaged Goods). This web site specializes in dealing with brands sold in retail stores and addresses the many issues that the brand and the retailer jointly deal with: https://www.cpgmatters.com/
The website www.storebrands.com provides timely research/trends at: https://storebrands.com/research-data
Biscotti, L. (2019, May 2). Private Label Brands Roar at Retail. Forbes. https://www.forbes.com/sites/louisbiscotti/2019/05/02/private-label-brands-roar-at-retail/#434d01838990
Business.com. (2020, Mar. 12). What is Private Labeling, and How Does it Work? Business.com. https://www.business.com/articles/private-labeling-details/

 

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