BRANDS 41Th ree categories of brands can be distinguished:- Manufacturer brands are developed and marketed by manufacturers of the product. Th ey
are supported by integrated marketing, including pricing, distribution and communica-
tions. Levi’s, Danone and BMW are examples of manufacturer brands. - Own-label brands (also called private label brands , store or dealer brands) are developed
and marketed by wholesalers or retailers. Th ere is no link between the manufacturer and
the brand. Retailers develop own-label brands to gain more power. It enables them to
enhance their store image, generate higher margins and be more independent of the
manufacturers of premium brands. Originally, they only competed on the basis of a price
benefi t compared with manufacturer brands. St Michael (Marks & Spencer, UK), Clever
(Billa, Austria) and Derby (Delhaize, Belgium) are examples of such store brands. Now,
however, most European retailers have adopted sub-branding strategies.^6 For example, a
three-tier strategy concerning quality is popular, consisting of the regular private label, a
price-aggressive budget or value label (e.g. No. 1 from Carrefour) and a quality-focused
premium label (e.g. Tesco’s Finest, Albert Heijn’s Excellent, Safeway’s Select). Further,
several retailers have thematic private labels, such as a health and wellness sub-brand
(e.g. Tesco Organic, Loblaw’s President’s Choice Green, Carrefour Bio), an ethical sub-brand
(e.g. Axfood’s Aware fair trade label, Wal-Mart’s Sam’s Choice fair trade and Rainforest
Alliance label), and a culinary sub-brand (e.g., Fior Fiore from Coop Italia, De Nuestra
Terra from Carrefour Spain). In many product categories, own-label brands pose a serious
threat to well-established manufacturer brands. Some retailers are using their own-label brands
as the key element in their marketing strategy, and support their own brand with a limited
number of well-established manufacturer brands to optimise their store image and con-
sumer traffi c. In Europe, private label brands hold high market shares as Figure 2.1 shows.
Research indicates that a country’s private label share goes up during economic down-
turns and shrinks when the economy is fl ourishing. However, consumers switch more
Figure 2.1 Private label shares in Europe
Source : PLMA Yearbook 2012.M02_PELS3221_05_SE_C02.indd 41M02_PELS3221_05_SE_C02.indd 41 6/5/13 2:59 PM6/5/13 2:59 PM