USE OF PRIVATE-LABELING IN THE FIELD OF SERVICES

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USE OF PRIVATE-LABELING IN THE FIELD OF SERVICES

Journal Title: Проблеми системного підходу в економіці - Year 2018, Vol 5, Issue 67

Abstract

Own trademark or private label – a brand of product or service created by a certain company on request and presented under the brand of another company. Particularly, the practice of using their own TM is widespread in trading networks. The registration of a private trademark is an initiative of the company, which undertakes the development and control of production and product quality. Such goods may be issued under the brand name of a particular trading network or have their own name. Nowadays private labels are widely used in order to increase competitiveness of trading networks and commodity producers. The publication highlights a role of private labels in marketing practice of retail dealers and manufacturers. It has been determined that Ukrainian market is lagging in its development comparing to the level of European countries, but it demonstrates positive tendencies in sale uplift of private label goods. The main reasons for purchasing of private label goods are attractive pricing and acceptable price – quality ratio, although among the choice factors for customers there are also trade network confidence, quality of goods and even particular features of goods. Ukrainian commercial networks actively use private label as such goods give additional income. The article estimates a Private label portfolio of leading Ukrainian food and non-food trading networks. Depending on the structure of private label portfolio, purposes and aims of an enterprise, the price segment balance of private label goods was offered. For a successful development of private label, there was defined commercial enterprise implementation cycle and for the procedure of private label introduction there were characterized the main requirements.Competition among the trading networks in the market in the struggle for the consumer forces companies to find new solutions. The emergence of a private label in Ukraine has become an alternative solution that enables networks to enhance the company's competitiveness and customers to feel secure. Throughout the world, retail networks have long been selling products under their own brand (private label) in a variety of categories: from drinking water and preserving – to napkins and disposable utensils. In the West, the private label has become the norm and one of the main competitive advantages for retail operators. Today, goods under the private label in Western Europe occupy 30-70% of all goods presented in the retail chain, and in some (for example, Marks & Spencer) the private label share reaches almost 100%. The largest retailers in the world, such as Wal-mart, Carrefour, Metro Group, Ahold, Tesco and many other private label products compete side-by-side with well-known brands and bring companies a steadily rising income. Major trade networks of Ukraine also recognized the benefits of this trend and actively introduce goods under the private label. Some of them began to produce a private label right away with the opening of the store. For example, in the Fozzygroup stores on the best shelves the “Prize” is displayed, in “Big pocket” – “Hit product”, in Metro – Aro and so on. Ukrainian retail is at an early stage of development, but the observed pace gives an opportunity to talk about a quick approach to world standards and trends.

Authors and Affiliations

K. S. Prishva, O. A. Radchenko

Keywords

private label Ukrainian retail trade networks

EP ID EP562267
DOI 10.32782/2520-2200/2018-5-18
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