Private branding is when a large
distribution channel member (usually a
retailer), buys from a manufacturer in bulk and puts its own name on the product. This
strategy is only practical when the retailer does very high levels of volume. The advantages to the retailer are:
- more freedom and flexibility in pricing
- more control over product attributes and quality
- higher margins (or lowersellingprice)
- eliminates much of the manufacturer's promotional costs
The advantages to the manufacturer are:
- reduced promotional costs
- stability ofsalesvolume (at least while the contract is operative)
See also : brand management, brand, product management, marketing
