Trademark

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As a trademark (including private label ) refers to products and product lines ( branded goods ) whose trademark in the ownership of a trading company located or a trade organization. In the case of smaller companies, there is also talk of a house brand . As a rule, they are only sold in the brand owner's own operations or in the retail operations affiliated with a trade association.

The more branches a retail company has or the more members a trade association group has, the more it pays off for them to design and manage their own brands. Different brand types are available to you for the design, namely (usually with increasing quality and price level) generic brands ( no names ), normal (“classic”) trademarks and premium trademarks . The term “premium brand” (for trade and manufacturer brands) is neither protected under competition law nor trademark law and is therefore freely available.

Incandescent lamp as a trademark "AS" of the former Schlecker company , manufactured by Philips .

Motivations

Private labels are worthwhile for trading companies for several reasons: The private labels are not offered by competitors, so that the private labels leading trading companies are free to design their pricing policy due to the lack of comparability . Retail companies use the following influencing factors to differentiate themselves from the competition: quality of the goods, packaging content, packaging design and list sales price (LVP). The cost of goods for private labels are generally lower than for extensively advertised manufacturer brands, so that their sales prices are below the sales prices of manufacturer brands even with the same calculation and can signal a special price performance of the trading company. The private label leading retail company can obtain these from various manufacturers who are in competition with one another ; therefore, exclusive private label contracts can be concluded with the cheapest producer. A few trading companies also have their own production facilities. Sometimes private labels are completely or largely identical or structurally identical to other branded goods (manufacturer brands). With increasing awareness of the favorable quality-price ratio of private labels, the opportunity for retailers to meet the self-esteem of customers who have learned to rationalize the price-performance ratio of various branded goods has also increased.

The decisive motives for running private labels are:

  • the independence from the big branded goods manufacturers whose marketing pressure through push or pull methods the retail companies and groups can evade with their own brands.
  • the chance to profile your own product range or company image with distinctive articles. Trademarks in product groups of the retail trade with high price elasticity of demand and as “counter-brands” to well-known manufacturer brands are particularly suitable for profiling . Professional support (retail management) and a psychostrategic approach are essential in order to exploit the opportunity to raise your profile, in particular through inexpensive and at the same time high-quality own brands .
  • strengthening customer loyalty. Since a company's own brands can usually only be acquired in its own sales outlets, there is an incentive for customers to visit them again if they have a positive product experience.
  • The change of suppliers with the same packaging, or regionally different suppliers with nationwide appearance of the brand of a chain.

In the scientific literature, other, less obvious reasons for running private labels or promoting private label sales are given. For example, companies with a vertically integrated supply chain benefit from high and stable own-brand sales thanks to economies of scale in production and the optimization of the capacity of their own suppliers.

In the years after the introduction of the euro (January 1, 2002), the market share of private labels soared: it rose from 28 percent (2001) to 41.3 percent (2008). The perceived rise in prices after the introduction of the euro prompted many consumers to switch; In 2008 there were probably some price increases for dairy products and other foods. Real wages that are stagnating or falling slightly for many employees can also be a factor.

Since then, the discounters have increasingly relied on premium trade brands (= trade brands under which premium quality is promised).

Functions

Originally, every brand fulfilled three functions: 1. Identification function (recognition and distinctiveness), 2. Origin determination function ("business card" for the brand owner), 3. Support function (advertising and image policy). With the increasing refinement of the branding and the emancipation of the trademark away from the copy or tag mark, new functions have been added for them. The economist Hans-Otto Schenk differentiates between eight specific functions of the trademark:

  • Price performance function (documentation of the price performance compared to manufacturer brands of the same or similar type);
  • Assortment performance function (documentation of own and distinctive alternative offers);
  • Profiling function (documentation of an independent service / product range profile to stand out from the competition);
  • Polarization function (documentation of an opposite pole to other own types of business and to other types of business of competition);
  • Range safeguard function (earnings improvement through less influenceable calculation of own brands, keeping out of price wars and price slingshots);
  • Commercial protective function (protection from competitors and / or imitators by taking advantage of trademark protection);
  • Solidarity function (trademarks as organizational binding means and strengthening of the feeling of togetherness in cooperative trading systems);
  • Innovation function (potential for the development of new types of product alternatives or brand concepts by retail companies).

Differentiation from manufacturer brands

Private labels compete with manufacturer brands . Both are branded goods; H. consumer goods equipped with the legal protection of a trademark , the trademark. "Manufacturer brands and trademarks do not differ in principle either in terms of quality or specific product properties, but only in terms of the respective brand ownership and the disposition of the design of the brand."

Private labels are an effective instrument for customer loyalty to shopping locations or retail chains. They are often located in the lower and middle price or quality segment. Due to the competition in the German retail trade, comparable items of different brands (with the exception of the "premium brands") are usually sold by food retailers and drug stores at the same price and in the same pack size, unless they are special offers. In Germany in particular , private labels are increasingly used as an instrument for price differentiation , profiling and strategic market positioning. The differentiation has led to new forms of appearance, especially in the case of retail brands (generic brands or no names, premium brands, assortment brands, umbrella brands). Mixed or hybrid forms are also created in the context of vertical collaborations, for example in selective distribution.

In independent tests by Stiftung Warentest , it has been found time and again for decades that there are numerous similarities between manufacturers and retail brands and that neither of the two categories is fundamentally superior in quality. When it comes to the price-performance ratio , retail brands are usually ahead (above-average quality at below-average price). Some trademarks, e.g. B. Elite or Mibell used to be manufacturer brands that were later bought / taken over by retail chains.

criticism

According to a research report by the Fernuniversität Hagen in 2009, the increasing spread of private labels has the following effects:

  • The frequency of promotions for branded articles is decreasing, the price level is increasing.
  • In price competition, individual manufacturers are forced to reduce product quality in favor of production costs.
  • Product innovations do not contribute to the increased price level, since in the case of private labels compared to manufacturer brands, imitation rather than innovation can be observed. Private label pricing pressure is likely to lead to savings on the part of manufacturer brands, which also, and often primarily, affects research and development.
  • The increasing spread of private labels entails the delisting of manufacturer brands from the retailer range. The variety of articles is decreasing.

The conclusions that no positive effect can be expected from the consumers' point of view, neither with regard to the price level nor to the variety of articles, and that there are also negative effects on total sales, are, however, to be viewed critically.

See also

literature

Individual evidence

  1. ^ House brand in the Gabler Wirtschaftslexikon .
  2. ↑ St. Dumke: Private Label Management , Volume 1. Duisburger Betriebswirtschaftliche Schriften, Hamburg 1996, p. 16.
  3. ↑ Hans-Otto Schenk: Functions, conditions for success and psychostrategy of commercial and generic brands. In: Manfred Bruhn (Hrsg.): Private labels in competition . 2nd Edition. Stuttgart 1997, pp. 71-96.
  4. ^ Jan Wieseke, Florian Kraus, Thomas Rajab: Promotion of Private Label Sales by Sales Employees - An Empirical Analysis of Informal Incentive Factors . In: Journal for Business Research , February 2010, p. 3.
  5. ↑ a b Cheap products are ending their triumphant advance. - For the first time in years, sales of no-name private labels in the grocery trade are falling. The supermarkets are now focusing on the premium segment . In: Die Zeit , No. 37/2010
  6. ↑ Hans-Otto Schenk: Market economics of trade. Wiesbaden 1991, p. 322 f.
  7. ↑ Hans-Otto Schenk: Trade, generic and premium brands of the trade. In: Manfred Bruhn (Hrsg.): Handbuch Markenführung , 2nd edition. Volume 1, Wiesbaden 2004, ISBN 3-409-11968-X , pp. 119-50.
  8. ↑ Hans-Otto Schenk: Quality-price relationships of manufacturer brands and trade marks. An empirical review based on product test results. In: Yearbook of sales and consumption research. Vol. 26, Issue 2, 1980, ISSN  0021-3985 , pp. 129-145.
  9. ↑ Rainer Olbrich, Tina Schäfer: Research Report No. 17 - Project SCAFO - Private Label and Business Form Competition
  10. ↑ Own brands and their secret of success: What customers really want ( Memento from March 24, 2012 in the Internet Archive )