Private labels, i.e. brands of goods manufactured on commission from retail chains, still have dual associations for consumers.
There is no doubt that a low price and attractive promotions are bonuses which attract and arouse keen interest in customers. On the other hand, private label goods tend to be stereotypically associated with inferior quality and less prestige. Products sold under a private label initially functioned only as cheaper substitutes for branded goods, but now they are becoming more and more competitive. Retail chains are making increasing efforts for their brands to be associated with values such as high quality and trust. This is connected with a rigorous approach to the production standards of the commodity, but also with appropriate marketing activities. One of the tools to build awareness of these brands in the minds of consumers is advertising in promotional brochures. The international research company FOCUS Research International, which deals with price and promotion monitoring in over 30 countries, looked at the offers of private label food products in commercial brochures on the Central and Eastern European markets in 2017. Particular attention was paid to the neighbouring countries of Poland, the Baltic States and new EU Member States such as Bulgaria and Romania.
The study measured the number of promotions of private label products in food categories in commercial brochures. The materials took into consideration hypermarkets and supermarkets, discount stores and convenience stores, as well as wholesale and cash & carry stores. In total, the largest number of promotions of private label products was recorded in brochures of countries such as Poland, the Czech Republic and Romania. Many promotions of private label products were also featured in brochures in Croatia, Hungary and Lithuania. It seems that especially in these countries, through low prices, retail chains wish to convince consumers to choose their private labels. It should be remembered, however, that cost reduction is not the only marketing stratagem, and the image of a brand can be built and consolidated by its mere presence in a commercial brochure. It is worth mentioning that the lowest number of promotions of private label products was recorded in brochures in Montenegro, where they constituted a very small percentage of all offers. This may indicate strong consumer attachment to proven and popular producer brands, which is often combined with the perception of private labels as less well-known and less prestigious.
The results look interesting, of the comparison of categories in which private label products in commercial brochures in individual European countries were most prominent. It would seem that private labels have proven themselves mainly in the case of long-life products. In total, in all countries, the largest number of promotions of private label products concerned the category of canned vegetables. These are products that have a long expiration date, which is why consumers often buy them in bulk. This category was especially favoured by store chains from Poland, Bulgaria, the Czech Republic and Slovakia. Pasta, sausages and biscuits/cookies turned out to be equally popular categories. Most promotions of private label products in these product groups were recorded particularly in Polish, Czech, Croatian and Romanian brochures. It is also worthy of mention that the category of ice cream, which in terms of the number of promotions of private label products, stood out in countries such as Croatia, Slovenia and Hungary. Could it be that geographical location is the reason for this?
Interestingly enough, in the Baltic States, as well as in Ukraine, private labels clearly lead the way when it comes to delicatessen products; that is, ready-made meals sold loose, such as salads, fish dishes and dumplings. For example, in brochures in Lithuania, almost all promotions (over 98%) of ready-made salads sold loose concerned those offered under a private label. Delicatessen products produced under a private label is a popular solution. Ready-made meals labeled with the brand of the chain may be associated with locality and freshness. This is especially true when the consumer’s trust in the brand of the commercial chain translates automatically into trust in its private labels.
The analysis shows that although there are fewer promotions of private label products in brochures in general, as compared with offers of branded goods, stores attach great importance to marketing activities to promote private labels, especially products with a long expiration date. Store chains invest in private labels because the very fact of having them increases the attractiveness of the store and helps to build the image of a stronger player on the market. It is evident that there is no doubt retail chains focus not only on the high quality of their products, but also on strong branding, based on numerous promotions in commercial brochures.
FOCUS Research International