Saturday, January 17, 2009

“Private labels will rule the retail world”


PAUL MARTIN, GLOBAL SALES MANAGER, PLANET RETAIL


Recently, an interesting thing happened in the UK retail market. Tesco, regarded as the worldwide pioneer of own brand private labels, suddenly started introducing ‘phantom’ private label brands in its stores. For the first time, Tesco was abandoning its policy of only offering own labels under its own name. The move is important as Tesco has been at the vanguard of the three-tier private label strategy (‘good, better and best’ approach) which is now adopted by most of the world’s leading grocers.

This surely indicates that the growing power of retailers across the globe and their growing focus on private labels, which offer higher margins and a point of difference over rivals, means that private labels are becoming increasingly important in almost every market. In fact, in developed markets, private labels are moving beyond their original price and functional benefits, to more sophisticated tools for promoting retailers’ ethical credentials. Private labels generally need a highly developed retail environment to succeed with high levels of concentration, consumer trust in retailers and the presence of international players. For these reasons, the share of private labels is highest in Europe, where private label penetration has reached 53% in Switzerland. In contrast, the private label share in a fragmented market such as China is under 5%.

In immature retail markets, penetration of private labels tends to be generally lower. This is due to the fact that retail markets are usually quite fragmented, consisting of a large number of smaller retailers where price competition is less intense. Smaller retailers also generally have less control over the supply chain. Having a grip on the supply chain is an important requirement for launching private labels.

So keeping all these in mind, launch of phantom is a nice strategic move by Tesco. However, it remains to be seen how consumers will react. Will they be happy to see more variety or will they be even more confused now?

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).


Friday, January 09, 2009

Kamal Gianchandani


IIPM Ranked No. 1 B-School In Global Exposre - Zee...

Kamal Gianchandani:
on the other hand, is the man who micro-retails film content – via stores, online, home delivery service – under ADA’s youngest venture (four months old to be precise) Bigflix. Gianchandani, an MBA from Pune University and another former PVR Pictures employee, believes that Bigflix is a result of the “group’s vision to have comprehensive presence in filmed and non-filmed entertainment sector.” His total focus these days is on tapping the home entertainment market in India, which he believes is largely untapped. Sample this: Unlike in India, where theatrical revenues account for 67% of a studio’s revenues, domestic theatrical revenues account for only 18% for Hollywood studios. With growing relevance of alternate revenue streams like telecast rights, home and mobile entertainment, the share of theatres in media consumption is likely to stagnate. When that happens, Bigflix will be ready to net in the moolah. Gianchandani plans to spend a cool Rs.25 crore to build the brand Bigflix in this financial year and says that “over 40-50% of (his) time is spent on increasing numbers (adding more customers and clients) and the balance 50% time is spent on identifying gaps in service and improving them.” For now, the company is busy packaging its latest offering, of allowing users to download movies through their set top boxes for viewing.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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