Striking a balance with private branding

How does a major manufacturer do private branding without ruining its relationship with distributors? Ram Herstein and Eyal Gamliel say ...


One of the central issues of brand management is the process in which brand managers have to make decisions concerning the management of private brands – or own label brands as they are known in the UK. Research into the manufacturer’s aspect of the private branding process has intensified, due to the increased power of distribution chains in both developed and developing countries, as a result of retailers’ aims for higher profits, and because retailers are becoming more proficient at managing store brands as part of their retail format.

Due to distributors’ increasing strength, national manufacturers can no longer deny the status of private brands or their penetration into many product categories considered impenetrable until recently, such as personal hygiene products. They must, therefore, carefully examine the appropriate possibilities open to them for dealing with the loss of significant market shares of their brands to private brands.

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