Discuss whether producing and selling private labels could be a viable Essay

Discuss whether producing and selling private labels could be a viable strategy for manufacturers of branded products - Essay Example There has been a considerable debate in the management literature regarding the fact that whether manufacturing and selling of private brands is a viable marketing strategy or not. This paper tries to present a balanced view regarding the topic by understanding the reasons for each of the stance. The concept of private label branding has often been criticized by researchers as it is essentially copying of the original brand. The research conducted by Kumar and Steenkamp (2007) has shown that the private labels mainly copy the packaging and content of the manufacturer brands that involves minimal research and developmental costs. The research conducted by Mitchell and Kearney (2002) had shown that following the private branding strategy can create a number of legal hassles for the companies because of incidents like trademark infringement, misappropriation of profits of original brand owners. The research conducted by J. Fernie, S. Fernie and Moore (2003) has shown that national brand manufacturers often decides to produce private labels because they can accrue efficiency gain from the process and eventually the manufacturers are able to produce products of superior quality at a lower cost or similar quality products at the same cost of production. The market strategy often t urns viable because the negotiation power of the retailers increase dusring the process. The research conducted by Bergà ¨s-Sennou, Bontems and Rà ©quillart (2004) has shown that national brand manufacturers often consider the strategy of producing the private labels beneficial if they find the concentration of the retail market share favourable. The synthesis of the current literature shows that the viability of production of private label depends on difference between the national brand produced by the manufacturers and the private brands produced by them. Producing private brands by national brand manufacturers will not be a