Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

Customer loyalty-Private label VS

National brand

Submitted by: Priyanka Kumari, DFMGM140781

2014 - 2016

Submitted to the MA FMG Course Team

29/October/2014

Pearl Academy
New Delhi

1
Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

CONTENT
1.
2.

Abstract
Introduction
Types of brands
2.1 Private label
2.2 National brand
2.3 Generic brand
2.4 Local or regional brand

Page no:
1-2
2-3
3
3
3

3. Private Label
3.1 Private Label and Customer Loyalty
3.2 Case study-Neiman Marcus
4. National Label

4
4-6
6
6-8

4.1 Case Study-Nike

5. Private label vs national brand-A comparative analysis
5.1) Differentiation between private label and national brand

8
9
10

5.2) Demographic Profile of the customer

10-11

5.3) Product wise Preference of customer

11-12

5.4) Reason behind Preferring or not preferring

Private label and national label
6. Conclusion

12-13
13

References

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Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

Customer loyalty-Private label VS

National brand
Abstract
Customer loyalty or in short unswerving in allegiance faithful to a cause ideal person or
custom or in the customers eyes its the tendency to religiously follow a brand. From a
retailers point of view it is the process of finding, acquiring and retaining the customers who
repeatedly buy the companys product or service. Achieving customer loyalty has become a
popular topic for all the brands. This document covers how brands accentuate themselves in
order to attract more and more customers and also the various strategies followed by
national labels and the private labels in order to attract their customers. A detail description
as well as comparison on the private label and national label has been given along with
statistics favouring the either one.
Key words- Customer loyalty, Private label, National brand, Demographic factor, Generic
brand.

1. Introduction
Loyalty cannot be blueprinted. It cannot be produced on an assembly line.
In fact, it cannot be manufactured at all, for its origin is the human heart-the center of
self-respect and human dignity. It is a force which leaps into being only when conditions
are exactly right for it-and it is a force very sensitive to betrayal. - Maurice Franks
According to Inamullah (2012) Customer loyalty is the willingness of a consumer to
purchase the same product and keep the same profitable relationship with a particular
company. Customer loyalties illustrate the tendency of a customer to choose one business or
product over another for a particular need. Loyalty is the process of finding, acquiring and
retaining the customers who repeatedly buy the companys product or service. Most
importantly the question arises how to create loyalty among the customers. All over the
world every business and profit earning firm want to make their consumer loyal. . Consumer
loyalty is behaviour of a consumer in which they show willingness to repurchase from a
company and continue relationships with that company in their future purchases. (Vesel &
Zabkar, 2009).
Customer loyalty plays a very important role to achieve competitive advantage and maintain
it. The main two variables Customer satisfaction and Customer retention are very important.
These two variables are depending on some other variables. Customer satisfaction is
depended on perceived quality and perceived value. Customer retention depends on product
attributes, customer relationship and trustworthiness. By providing attractive product and
services a firm can retain its customers and earn profit as well. (Bagram, 2012)

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Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

Customer loyalty
Customer
retention

Customer
satisfaction
C

Perceived
quality

Perceived
value

Product
attribute

Customer
relationship

Trustworthiness

In other words, it is the continuous buying of a consumer for a particular company brand and
suggesting to other friends and family. There must be something attractive in a brand which
keeps a customer to buy that product over period of time without preferring ant other
competitor brand. Previous researches have classified customer loyalty into two parts. First
part is consumer behaviour and the second part is consumer attitude (Guilln, Nielsen,
Scheike & Marn, 2011). Rauyruen and Miller (2007) describe in their study that customer
loyalty may be because of rational or either emotional factors. Rational factors may be the
characteristics of the product and emotions are the feeling of a consumer
The sale record of a company can go in positive figures if their consumers are loyal to them.
So for maximization of sale, customer loyalty is important. But for customer loyalty it is
important to make significant features in the product which can contribute for loyalty in
consumers. (Gerpott, Rams & Schindler, 2001).This is very hard to understand the mind of
consumer that what will be the key psychological factors that will make consumer loyal
towards a company product. (Chen & Hu, 2010). Once a firm understands the mind of their
consumer they can make a long lasting profitable relationship with them and can make them
loyal (Inamullah 2012). There are many ways with the help of which one can measure the
customer loyalty but the most important and prominent is that consumer is buying a product
himself and suggesting to others in presence of competitors products so it can be understand
that a consumer segment is loyal for that particular firm products for which they giving
preference and also suggesting to others (Kim & Yoon, 2004).

2. Types of brands:-

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Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

2.1 Private label

Private-label products or services are typically those manufactured or provided by one
company for offer under another company's brand. Private-label goods and services are
available in a wide range of industries from food to cosmetics to web hosting. They are often
positioned as lower-cost alternatives to regional, national or international brands, although
recently some private label brands have been positioned as "premium" brands to compete
with existing "name" brands.
2.2 National brand
The brand name of a product that is distributed nationally under a brand name owned by the
producer or distributor, as opposed to local brands (products distributed only in some areas of
the country).National brands must compete with local and private brands. National brands are
produced by, widely distributed by, and carry the name of the manufacturer.
2.3 Generic brand
Generic brands also called private label or house label brands may have a
nationwide presence just as national brands do, but they differ from national brands in that
they are distributed exclusively by individual retailers, such as grocery and department store
chains, and will only appear for sale in those stores. For example, many national big-box
chains have a "house label" brand of certain foods or clothing. That brand won't be found in
any other retail outlet.
2.4 Local or regional brand
Local or regional brands are like national brands, but belong to smaller companies and only
have a local or regional market coverage. Examples of such brands include a line of dairy
products appearing for sale only in the Pacific Northwest, and a cherry soda brand available
only in the Southeast. Some brands are even isolated to a single state, using state trademark
registrations rather than U.S. federal registration. National, local and regional brands share in
common the fact that they are owned by the product manufacturers, or sometimes by the
product distributors.

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Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

3. Private label
Private label are taking world by storm and are also flooding the Indian markets.
-Subhadip Roy
Private label according to Baltas is A consumer product produced by, or on behalf of,
retailers and sold under the retailers own name or trademark through their own outlets.
Therefore, development of private label solely depends on retailers. Private label is also
known as store brand, retailers brand or own brands.
3.1 Private brands and consumer loyalty
Retailers are using private label brand to earn profits and to achieve customer loyalty.
Whether a stoic brand carries the retailers own name or is part of a wholesalers private label
program, store brands give retailers a way to differentiate themselves from the competition.
Private brands supplement a retailers image and strengthen its relationship with consumers.
In addition, some store brands are no longer category killer, but are comparable to national
brands (Dc Wuir et ol 2003). Retailers are aware that consumers can purchase national
branded items anywhere, but they can only buy their store brand at their stores and its a plus
point for those retailers. (Mahirstanbullu, 2009)
Store brand loyalty likely results in increased profits for retailers since consumers purchase a
higher percentage of merchandise from that retailer (Ailawadi, 2001). Lewison and Wesley
(1999) stated: Through a store brand program supermarkets might enhance store loyalty
and brand loyalty. The majority of retailers in the past based their store brand strategy
primarily on price without adequate attention to quality. However, retailers have recently
started to pay more attention to store brand quality. Corstjens and Lal (2000) reported that
quality store brands can be a device for retailers to generate store differentiation and store
loyalty.
The most important element for a private label brand in establishing loyalty is the brands
ability to fulfil promises to its consumer base. The continued fulfilment of promises usually
results in a long-term profitable relationship between the retailer and consumer and is related
to
the
utilitarian
benefits
offered
by
the
brand
(Carpenter,
2003).
The total lifetime profits for a typical retailer can increase by 73 per cent by retaining an
additional five per cent of existing customers as loyal customers refer other shoppers to the
retail store thereby building word-of-mouth reputation and potentially expanding the
customer base (Huddleston et al, 2004). Loyal customers to a particular store are less likely to
patronize a competitor. Food Business News defined customer loyalty as creating the
strongest possible relationship between the retailer and customer, so that people feel they
will miss something if they go to another store (Huddleston et al, 2004).

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Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

Shoemaker and Lewis (1999) define truly loyal customers as customers who feel so
strongly that you (the company) can best meet has or her relevant needs that your (the
companys) competition as virtually excluded from the consideration set; that the
customers buy almost exclusively from you(Kumar and Shah. 2004). Attitudinal loyalty
has been defined in the perspective of a particular brand as it captures the affective and
cognitive aspects of brand loyalty such as brand preference and commitment. Attitudinal
loyally is an important concept since it indicates propensity to show certain behaviours such
as the likelihood of future usage or how likely it is that customers would recommend the
company go their friends or a colleague. Therefore, firm need to concurrently focus on
building both behavioural and attitudinal loyalty to achieve true loyalty (Rcichhcld. 1966).
For any company, customer loyalty becomes more meaningful only when translates into
purchase behaviour. Therefore, it is for a firm to build behavioural loyalty. Pure attitudinal
loyalty of a customer without behavioural loyalty may provide only Limited or non-tangible
returns to the firm which is nowhere useful for the firm. Corstjens and Lal (2000)
demonstrated that premium quality store brands play a role in building store loyalty. Guenzi
et al. (2009) found that customer trust in store branded products has an influence on store
patronage, since it positively affects customer trust us the store, perceived value and store
loyalty intensions.. The use of point of sale (POS) is obtained from the database of retailers
provides invaluable knowledge of the transactional behaviours of consumers.
(Mahirstanbullu, 2009)
Building strong customer relationships has been suggested is a way to gain a competitive
advantages. The underlying assumption of much of the existing research is that long-term
customer relationships are preferable to short term relationships because of greater
profitability this assumption has been attributed to bigger exchange efficiencies created by
customer retention economics (Sheth and Panraiiyar, 1995). Recent advances in information
technology have provided marketing managers with the took to create a new generation of
customer relation tactics, Two primary objectives of customer loyalty is to increase sales
revenues by raising purchase usage levels, and or increase the range of products bought from
the supplier. A second objective is building a closer bond between the brand and current
customers to maintain the current customer base. Past research has confirmed that store
satisfaction is strongly associated with re-purchase intentions. Berry and Gresham (1986)
contend that relationship retailing is particularly relevant in todays marketplace because
it has the potential to simultaneously increase sales to current customers white reducing
the chances of losing those customers to competitors. Interpersonal relationships exist
between salespeople and customers in retailing, but customer, also establish relationships
with the stores themselves and with the brands that story carries. Increased customer
retention, as a result of increased loyalty, has two important effects (or retailers. First, it can
lead to a gradual increase in the firms customer base which is particularly necessary in an
era of low sales growth. Second, the longer the customer remains loyal to the firm, the larger
the profits earned from each individual customer enhanced loyalty, the prevailing practise of

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Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

offering costly loss leaders to generate store traffic may become less necessary (Rose.
1990)
3.2 Case study-Neiman Marcus
One of the best examples of a CRM activity designed to build customer loyalty is Neiman
Marcuss
In
Circle
program..
Customers spending more than $5,000 annually on their Neiman Marcus credit card are
enrolled in the program and get special gifts, awards, and services. Customers whose
higher spending levels place them In the Platinum or Chairmans categories generate
additional rewards and services for themselves. The points can be redeemed for prizes
ranging from a limited-edition Emilio Pucci silk scarf to an eight-night excursion through
India or a complete Sony home movie theatre. Each year for 5.000,000 points, a limited
edition luxury vehicle is a reward choice. In Circle members receive frequent
communications from Neiman Marcus throughout the year, including the quarterly In Circle
newsletter and the semi-annual in Circle Entre magazine, a quality publication produced by
the creators of Southern accents and Southern Accents. Neimans sales associates can tap into
Information about customers past purchases and shopping behaviour and are encouraged to
contact these customers personally. Sales associates have the freedom to be creative. Store
managers invites in Circle members to free lunch on their birthdays, recognizing the value of
these preferred customers. Neiman Invites in circle members to sit on a board that provides
feedback and suggestions as to how Neiman can improve its customers shopping experience
and enhance and broaden its role in the community. (OConnell, 2007)

4. National Brand
National brands dominate our society. Theyre familiar and reliable, both to consumers as an
experience and to brand owners as a revenue source. People often associate them with goods
produced by private, for-profit corporations, but national brands also appear in the public
sector and in non-profits, and they include services as well as goods. Achieving a national
brand is a major milestone in a companys growth, requiring years of growth and success.
National brands are extremely valuable. Just a handful of the biggest corporations own a
large percentage of the brands that Americans recognize, but many of the most famous
national brands started out as small businesses. National brands, like the name suggests,
appear nationwide, achieving total or near-total geographical market coverage. This means
customers can buy products or services bearing that brand virtually anywhere in the country.
Behind the scenes, this requires a sophisticated logistics operation often involving multiple
manufacturing centres and distribution companies. Such an operation helps connect
producers, distributors and retailers in a cost-effective manner. National brands tend to
extensively utilize mass-media advertising in order to build and maintain audience
awareness, and they are the most recognizable type of brand to mass audiences. Examples

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Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

include well-known brands in fast food, computers and clothing lines sold nationally. ( Local
Brand National Brand Private Brand Marketing Essay, 2013)
This kind of brand is a brand that circulated throughout the country. The product is only
being nationally distributed and marketed. Moreover the national brands are owned and
advertised by a manufacturer. National brand also can differ from the local brand or regional
brand. In marketing side, this type of brand is more difficult than the local brand. In order to
market their product they have to know their consumer very well but it may took a long
period of time. The cost also is big. This is because in order to market the national brand they
have to know their customer widely. Moreover, this kind of brand will use to market their
brand is other country by radio, print and television advertising. The advertisement also can
be customized for local and national brands so that the public could get familiar with the
brands. Companies which sell national brands count on the reputation of their brands to get
the market share. The national brands may appeal the consumer by their brands name.
Consumer often looks the brands which are familiar and easy to identify. ( Local Brand
National Brand Private Brand Marketing Essay, 2013)
National brands may play on distrust of regional or private label brands to get consumer to buy them.
Its also have to encourage people to ask question, for example the quality of generic or store branded
products. Most national brands started with small regional brands then will slowly grew over time.
New companies products are constantly being established and some of the company will go on to
capture of the market and expand it to a wider area and lastly will become national brands. The
example of the product in Malaysia which is from the regional brand and eventually become a
national brand is Padini brands. ( Local Brand National Brand Private Brand Marketing Essay,

2013)
National brand have to create their own brands strategy in order to make their products being
achieved in the market. This national brand has to focus on the brand equity strategy. They
have to create a loyal customer and the customer who aware about their brand. Some of the
retailer will use the packaging strategy. They will design the unique packaging so that
consumer will remembered the brand directly. For example, an Avon product is gaining
preferred shelf positions by partnering with retailers and using packaging and displays as part
of a marketing. In the new scenario, the national brands equity is often used to endorse a
store brand. That could raise the stature of the company brand.
National brand can use many strategies, for example the broad strategy areas that can be used
are the brand domain. These brand domains are experts in one or more of the aspects. In
order to use this kind of strategy the person must have an intimate knowledge, not only about
the technologies shaping but also the pertinent consumer behaviour and needs. Brand
recognition also one of the branding strategies. This kind of strategy was specialists
distinguish themselves from competition by raising their profiles among the consumers. It
can be used as to convince consumer to show their brands is different than the other
competitor. However brand strategy is not a given and needs to be constantly be reassessed.

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Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

The brand managers must decide what the best course of action for their brands is in
particular markets, based on an analysis of the relevant internal and external influences on
the brands.
Failure to do this can also keep your loyalty from achieving truly spectacular results. Driving
to purposeful loyalty means putting customers at the centre of every business decision, and
you can only do that when you value the things that matter to them.
4.1 Case study-Nike
Nike is a brand that inspires real frenzy in its customers .Nike has found a way to speak to
the deepest values people hold, to the aspirations they have for themselves and their lives,
and to give them the tools to turn those principles into value for themselves and Nike. With
their FuelBand, the athletic gear brand became a technology company, all in aid of giving
people an unparalleled experience that was bound to have them come back for more.
Nike is also a great example of taking care of customer data and rewarding them for sharing
it. Once a customer has completed a run wearing her Nike+ FuelBand, she can compare the
data on her activity to that of millions of other customers, noting the change in her
performance over time, and planning her next fitness challenge. If shes one of the 12% of
extremely tech-inclined Millennial shoppers that BCGs group calls trailblazers, she can
also export the data via APIs (created by other Nike fans) and mash it up with data from
other sources, such as her MyFitnessPal app.
The value here is created with contributions from the brand (that is also a retailer), the
customers, and a wider global community of customers. All of these elements constitute
triggers for continued loyalty over the long-term, without the creepy overtones of lock-in
that marketers have considered a holy grail for too long. To borrow from John F. Kennedy,
Nike has never needed to build a wall to keep people in and prevent them from leaving.
Not every company has the scale and heritage of Nike. But businesses of all sizes and
verticals can get their arms around co-created loyalty with the right steps namely, getting to
know your customer. For smaller companies, that can be done face-to-face with more one-toone communications. For larger companies, insights from data can help you understand how
to make customers happier today and more loyal tomorrow.
This should transcend simply knowing the shoppers name and ZIP code to understanding
what will surprise and delight them. Todays shoppers grow more and more used to cocreating value with companies, the onus for gathering these insights is no longer solely on the
shoulders of the company. These are shoppers who want to show you how to earn their
loyalty.
Simply put, most businesses dont ask for feedback frequently enough, or in the right ways.
Such companies are at a risk of running into real problems with a customer base that is used
to giving that feedback solicited or otherwise at unprecedented levels.
Failure to do this can also keep your loyalty from achieving truly spectacular results. Driving
to purposeful loyalty means putting customers at the center of every business decision, and
you can only do that when you value the things that matter to them. (Dunnhumby, 2002)

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Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

5. Private label vs national brand-A comparative analysis

Although your customers wont love you if you give bad service, your competitors will.
-Kate Zabriskie
National brands generally sell for more than house brands (private labels, such as Safeway's
Cragmont or Town House labels) or generics. Presumably consumers believe that the
national name brands are of higher quality. Whether this belief is true or not is irrelevant to
the market outcome so long as consumers believe it.
There is very little difference in quality between some national brands and store brands, such
as aspirin and bleach; yet consumers pay substantially more for national brands. In other
cases, such as some canned fruits and vegetables, there are substantial differences between
national brands and generics that consumers can determine in blind taste tests.
It is often difficult to determine, without careful chemical analysis or blind taste tests,
whether house brands or generics are equivalent to national name brands. There is good
reason for uncertainty. For example, Wonder Bread produces many of the private-label
breads. That does not imply, however, that private brands are necessarily of the same quality
as the name brand. Wonder Bread may vary its formula when it produces private brands, and
the private brands may not be as fresh. Similarly, Falstaff, one of the largest brewers of beer
in the United States under its own label, is also the largest supplier of private-label beer.
Most private-label brands of bourbon, scotch, vodka, and gin are produced by well-known
name-brand companies. Sears often induces major manufacturers of typewriters, water
heaters, and other products to produce Sears (Kenmore) brand products to the same or higher
standards than the manufacturer's own brand.
Consumers may be willing to pay more for national brands to avoid the risk of buying a lowquality product. As a result, if they can be induced to try the cheaper brands and can see that
their quality is as good as the name brands, they may switch. A Gallup Poll found that nearly
80 per cent of people who try a product with a store-brand label become repeat buyers.
Typically the store-brand buyer is a better-educated, affluent person who reads and
understands the labels.

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Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

5.1 Differentiation between private label and national brand

NATIONAL BRAND
ADVANTAGES DISADVANTAGES
High popularity
Low margin
More
loyal Me too merchandising
customers
High perceived No freedom in pricing
quality

PRIVATE LABEL
ADVANTAGES
DISADVANTAGES
High margin
High cost
Uniqueness
High advertisement
and promotion cost
Low cost alternative Low
perceived
to national brand
quality
Increases
store Low popularity
loyalty

5.2 Demographic Profile of the Customer

GENDER
MALE
FEMALE
TOTAL
AGE GROUP
BELOW 15
15-25
25-45
45 AND ABOVE
TOTAL
INCOME
UPTO 1 lac
1 lac-2.5 lac
2.5 lac-5 lac
ABOVE 5 lac
TOTAL
PROFESSION
SALARIED
BUSINESS
PROFESSIONALS
HOUSEWIFE
STUDENTS
OTHERS
TOTAL

NATIONAL
8
4
12

PRIVATE
1
0
1

BOTH
22
15
37

TOTAL
31
19
15

%
62
38
100

0
5
6
1
12

0
0
0
1
1

2
14
13
8
37

2
19
19
10
50

4
38
38
20
100

3
2
3
4
12

0
0
1
0
1

8
14
12
3
37

11
16
16
7
50

22
32
32
14
100

0
3
2
2
4
1
12(24%)

0
1
0
0
0
0
1(2%)

10
5
0
6
14
2
37(74%)

10
9
2
8
18
3
50

20
18
4
16
36
6
100

Source: Consumer Attitude towards Private Labels in Comparison

To National BrandsConsumer Attitude towards Private

Labels in Comparison

Demographic profile and buying behaviour Consumer buying behaviour largely depends on
To National BrandsConsumer Attitude towards Private
the demographic factors
like age, gender, family life cycle, education, occupation etc. These
Labels in Comparison
factors help the consumer in deciding their preference towards national brand or private label
To National Brands

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Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

products. Another important factor that makes a difference in buyer behaviour is the role that
the individual is playing in the society. For example, individuals who are parents to small
children will have a different set of priorities when it comes to buying goods and services
than individuals or couples who do not have any children in the home.
In like manner, the consumer habit of someone who earns an hourly wage is likely to be
different from that of someone who is employed in a salaried position. Thus priorities decide
the kind the purchase the person is making.
The above table, out of the total respondents, 62 per cent are male and 38 per cent are female
customers who make purchases of private label products and national brand products. It also
highlights that out the total respondents 24 per cent prefer only national brand products
whereas only 2 per cent respondents prefer only private label products but 74 per cent
respondents prefer both brands i.e. national brands and private brands. It discloses that till
today society is male dominated and the males are having more purchasing power as
compared to women.
Age-wise analysis of the respondents shows that only 4 per cent respondents are belonging to
age level below 15 years, 38 per cent respondents belong to age group between 15 to 25
years, 38 per cent are from the age group of 25 to 45 years and only 20 per cent respondents
are having the age above 45 years. It reveals that majority customers are belonging to middle
age group and are having more purchasing power. Consumer Attitude towards Private Labels
In Comparison To National Brands
Income-wise analysis of the respondents shows that 22 per cent of them fall under the
category of income up to 1 lakh. 32 per cent of respondents fall under 1 to 2.5 lakh, likewise
32 per cent fall under the income group of 2.5 to 5 lakh and 14 per cent fall under the income
level of above 5 lakh. It reveals with a fact that maximum i.e. 68 per cent respondents
preferring both national brand and private label fall under the income between 1 to 5 lakh.
Occupation wise analysis of the respondents reveals that 20 per cent of the respondents were
salaried,18 per cent were doing business, 4 per cent were professionals, 16 per cent of
respondents were house wives and a maximum of students with 36% were asked about their
purchase behaviour. The table also reveals that 100 per cent of the professionals were buying
only national brands and 100 per cent of salaried respondents preferred both national brand
and private label for their purchase.
5.3 Product wise preference of Customer
PARTICULRS

NATIONAL
BRAND
PRIVATE

FOOD

SANITARY

NO:OF
RESPONDENTS
21

NO:OF
RESPONDENTS
36

ELECTR0NICS
NO:OF
RESPONDENTS
44

26

14

CLOTHING

LUXURY

OTHERS

NO:OF
RESPONDE
NTS
32

NO:OF
RESPON
DENTS
37

NO:OF
RESPONDE
NTS
16

14

11

26

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Priyanka Kumari

Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

LABEL
BOTH
TOTAL

5
50

0
50

0
50

4
50

2
50

8
50

Source: Consumer Attitude towards Private Labels in Comparison

The product-wise preference of the sample respondents has been shown in the table. Product
wise categorization of the respondents reveals that 52 per cent of respondents preferred
buying private label products for food category. For clothing category a maximum of 64 per
cent preferred buying national brands only. Seventy two per cent of respondents said they
would buy only branded sanitary products. For electronic products, maximum of 88 per cent
of the respondents have preferred buying national brands only. This table thus reveals us that
as the cost of the product increases, faith towards national brand also increases.
5.4 Reason behind preferring or not preferring Private Label and national label
YES

NO

REASONS

NO:OF
RESPON
DENTS

REASONS

NO:OF
RESPONDE
NTS

BETTER
QUALITY

BETTER
OFFER
SUGGESTI
ON BY
CLOSE
ONE
OTHERS

11

COMPARATI
VELY LOW
QUALITY
UNDUE
INFLUENCE
UNFAIR
MEANS OF
SELLING
HIGH COST

12

1
32

NO:OF
RESPONDE
NTS

13

REASONS
TO STICK
UP WITH
OTHER
BRANDS
QUALITY

FAIR PRICE

EASY
7
AVAILABLI
TY

HABIT/TRA
DITION

18

1
18

Source: Consumer Attitude towards Private Labels in Comparison

The above table shows the reason behind selecting a certain brand. In which the reason for
preferring private label was suggestion by close one i.e. 38 per cent. Thirty four per cent of
respondents considered private label when better offer was provided. Twenty five per cent of
respondents felt private label to be better quality product. This response from the respondents
reveals that mouth to mouth publicity can better work for private label product backed with
better offer as a motivating agent. Seventy two per cent of customers felt private label
product to be a low quality product. In which 11 per cent felt selling private label is making
undue influence on the respondents purchase behaviour. Eleven per cent of respondents felt
selling private label to be unfair. Thus the data provides us with information that quality
aspect of private label is doubted by the respondents i.e. fifty per cent did not prefer private
label due to the negative perception on quality aspect. When a question asked to respondents

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Customer loyalty-Private label v s National label

MAFMG 2014-2016
Semester 0

about their reason to prefer certain brand, the major reason behind preferring certain brand is
its quality i.e. is 50 per cent. Other major reason to stick to a certain brand is easy availability
of the product. Thirty nine per cent of respondents thus selected a brand based on its easy
availability.

6. Conclusion
When customers share their story, theyre not just sharing pain points. Theyre actually
teaching you how to make your product, service, and business better. Your customer
service organization should be designed to efficiently communicate those issues. - Kristin
Smaby
Customer brand loyalty came into enterprisers eyes for several years. It plays an important
role in the modern global marketing. In order to maximize profit, people try different
strategies, among which, loyalty is the most important one. Customer loyalty is a challenge
which needs to be achieved. By finding the elements and effect of loyalty, businessmen may
better understand the nature of consumer faith.
If a company doesnt earn profits, then customer loyalty holds no importance. Customer
loyalty can be a double edge sword, if mismanaged it can seriously hurt the companys
bottom line by compromising profitability or loyalty. It customer loyalty is managed wisely,
it could be the most potential weapon against competition as the companys marketing
arsenal (Kumar and Shah, 2004). To determine if customer relationship is profitable, a
company needs to be able to quantify this relationship (Mao, 2010).
In this fast growing apparels industry, if retailers want to survive and perform well, the only
way is to seek assistance of store brands to create differentiation .The above work provides
an insight about the customers decision making process by coming up with the consolidated
factors responsible for brand selection by a customer. The study tries to evaluate factors for
both national brands and private label. The results give us few parameters for the customers
making a purchase decision for apparel products. Following are the findings from the essay:
High level of credibility which brands develop through years of marketing and promotional
activities, excellent services and word of mouth, is an important factor for customers.
Therefore, to attract customers to purchase private labels or national label, it is important for
the store to be strong brand in itself to pursue them for the first purchase. Brand name also
plays a major role in influencing the customers. It influences the buying decision of the
customer. Earlier prices used to be the only Unique Selling Proposition for the store brands,
but now other things like efficient after sales support by the retailer for its in- house brands,
etc. are also becoming an important parameter to consider by the customers. The
merchandising mix, brand equity and brand knowledge are identified as the key components
for consideration of a brand. (Mao, 2010)

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MAFMG 2014-2016
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MAFMG 2014-2016
Semester 0

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