What is a private label. How to make goods for a large network

Today, many entrepreneurs are thinking about creating a line of their own brand. But how not to get lost in this market and what are the prospects for developing the share of private labels (PL)? How to increase customer loyalty with the help of private labels? Find out more in our article.

Private Label in the Russian Market: Development and Promotion Strategies

Professional automation of goods accounting in retail. Tidy up your store

Take control of sales and track the performance of cashiers, outlets and organizations in real time from any convenient place with an Internet connection. Form the needs of outlets and purchase goods in 3 clicks, print labels and price tags with a barcode, making life easier for yourself and your employees. Form a customer base using a ready-made loyalty system, use flexible system discounts to attract customers during off-peak hours. Operate like a big store, but without the cost of specialists and server hardware today, start earning more tomorrow.

Own trademark, or private label – in the simplest sense, today it is a trademark owned by a rather large retail chain, in which products under this trademark are sold.

The biggest “plus” for manufacturers-owners of private labels is that they have the ability to fully control the production of their products, monitor their quality, as well as set their own prices and competently distribute products among their chain stores.

So, private label – is a brand that is manufactured to a retailer's specifications, owned and sold through the retailer's distribution network.

Today, consumer goods are produced, labeled and sold under private labels. – food and non-food household chemicals, Food.

Of course, today the buyer is more willing to spend his money on goods of own brands of large chains, and all this is due to the high quality of goods and always affordable price on them.

As a rule, products manufactured by stores' own brands are much cheaper than similar products from other brands. – the price difference can be up to 30-40%.

Such cheapness is achieved primarily due to the reduction in the cost of goods: there are no intermediaries, there are no costs for delivery, advertising and marketing, since the goods are promoted at the point of sale.

A manufacturer of goods under his own brand invariably and guaranteed to receive sales of his products, which were manufactured under the contract.

As you know, private label products are produced using the capacities of independent factories. – large retail chains sell various goods produced to their order, but under their own brand, but at the same time they themselves do not take part in the production of goods.

As for the prospects for private label in Russia, experts are unequivocal in this regard: the owners of their own retail chains have more than enough prospects.

For comparison, the sale of private label goods in the Pyaterochka chain today accounts for almost 20% of the total turnover, in other hypermarkets the level is slightly lower, but remains consistently high.

With the help of the online program for automating the Business.Ru store, you can analyze sales, keep a history of work with the buyer, send SMS and Email mailings, and inform customers about ongoing promotions and discounts.

Private labels are manufacturer's risks. Video

Types of private labels

Studies show that the number of own brands in large retail chains in our country is much lower than in America and Europe.

Comprehensive trade automation at a minimum cost

We take a regular computer, connect any fiscal registrar and install the Business Ru Kassa application. As a result, we get an economical analogue of a POS-terminal as in a large store with all its functions. We enter goods with prices in the Business.Ru cloud service and start working. For everything about everything - a maximum of 1 hour and 15-20 thousand rubles. for the fiscal registrar.

So far, the leader in this segment is the X5 Retail Group (which manages the stores of such retail chains under the brands Pyaterochka, Perekrestok, Karusel and Perekrestok Express).

The next company in terms of sales of goods under its own brand is Magnit, and then – enterprises retail belonging to the French trading network "Auchan".

Private labels are:

• species;
• own trade marks-analogues;
• unique private labels;
• joint brands.

Each of us has met specific private labels: for example, these are products under the brand name "Each Day", which are sold in Auchan stores, or products "Red Price", which is actively sold in Karusel and Perekrestok.

Often, a private label is named after the retail chain where it is sold (for example, Metro C&C), but most often a private label is developed for goods of all categories: food, personal care products, and household chemicals.

Private labels-analogues are characterized by a lower price than similar products of other brands. As for the quality of such goods, as a rule, it loses a little to the quality of more "promoted" brands, but on the whole remains at the industry average level.

When releasing their own brand names, retailers must assess all the risks associated, among other things, with the costs of entering the market for such products.

For example, private label baby food is doomed to “failure”, since the vast majority of parents will buy their young children only food from already proven and reliable brands and companies.

And here is the production wet wipes or equivalent private label toilet paper is likely to be profitable, as this product – it is simply a consumable and rarely anyone thinks about their quality, paying more attention to cheapness.

Unique own brands, as a rule, have no analogues, direct competitors among other brands, and sell them, as a rule, to innovative consumers.

A striking example in this regard is the X5 Retail Group, which today continues to develop its own brands in various price segments. – low (designed for buyers with low income) and medium (for consumers with average incomes).

Joint brands of private labels and other well-known manufacturers of products are less common, but also have a place to be. In this partnership, all manufactured products are produced for sale under the retailer's own brand name.

For store owners, the Business.Ru team has developed a special program that allows you to collect all the information about the buyer in one place: the history of interactions, meetings, phone calls.

Goods under own brand: prospects for development in Russia

Today, every manufacturer is fighting for consumers' wallets, and huge competition in the market forces entrepreneurs to look for new solutions, one of which is private label.

Today there is a huge layer of consumers who almost always purchase products in retail chains under their own brand of these chains.

People are quite satisfied with such "expendable" products, everyday goods of precisely this quality.

This does not mean that consumers have begun to buy less well-known world brands, the level of sales here will never be reduced to nothing.

Many consumers admit that they are prevented from buying large volumes of their own brand products in large stores by some psychological factor – they are simply afraid to look too economical in the eyes of others.

This means that for a festive table or, for example, for work, the same Rich juice will be bought, and not cheaper juice of “non-brands”.

But the “progress” in this segment is also evident: more and more families prefer private label products to all other analogues.

This state of affairs only means that this segment will steadily develop in our country, which means – expand the market and types of goods.

A vivid example of the huge field of private label prospects in our country is the experience of France, Holland, and Germany. It is not the first time that these countries have been holding rather large exhibitions of goods of their own brands, where participants talk about their productions.

The contagious example of American and European colleagues strongly motivated Russian entrepreneurs, which have begun to develop this sector no less actively in the past few years.

Business in this area is promising, attractive, it can be diversified in various directions: for example, buying production or ordering packaging of products under your own brand from other manufacturers.

Every year, the largest retail chains are actively increasing the share of their own brands. And on this path they are not afraid economic crisis: retailers consider this period a period of new opportunities and an incentive for development, which means that every entrepreneur, with some effort, will be able to take his place in this really promising area of ​​​​trade.

Boost your store performance in 1 month

The service will improve the efficiency of the store by reducing the loss of product balances, significantly speed up the process of revaluation, printing price tags / labels, strictly discipline the work of the cashier and limit his opportunities when working with discounts / sales at a free price.

Any modern company, respecting itself and its customers, can not do without a special corporate identity and therefore without a trademark to distinguish it from other similar companies.

Definition

A trademark is understood as a combination of a company name, a brief text of information and graphic details. This sign allows the manufacturer to show his individuality and uniqueness.

A private trademark is recognized by law as the intellectual property of an individual or legal entity and is protected by the Intellectual Property Law. It is assigned a certain value on the balance sheet of the firm (organization). refers to intangible assets. The rights to it can be sold or transferred, as well as create a franchise or pledge to a bank.

Types of trademarks

Today they are classified as follows:

1. verbal. Usually this is a name with a combination of fonts. More than 80% of all trademarks fall into this category. As an example, we can cite VTB, Honda, Adidas, etc. There are also famous slogans here, which are also registered and protected by law. For example, Apple: "Think different".
2. Fine. This includes symbols or graphic pictures that do not contain word or letter elements. For example, the well-known Lacoste crocodile or Nike flourish.
3. Combined. This is a combination of the first and second Them in Everyday life called logos. For example, a payment system familiar to many is MasterCard (a verbal name enclosed in two circles).

By the way, you can register the shape of the package and the color scheme.

Small clarification

The stable combination of "trademark" in everyday life is used extremely rarely. It is much more common to hear "logo", "brand" or "trade mark". And if the meaning of these expressions is similar, then the concepts differ.

The word "brand" comes from marketing. It implies the image of a product (service, firm, organization) and its philosophy. "Logo" - a unique image that is applied to the product. And only the word "trademark" carries a semantic load similar to the expression "trademark".

None of the above expressions Russian legislation not officially accepted. There is only the concept of "trademark". About him we are talking in Article 1477 of the Civil Code of the Russian Federation. And the creation of your own trademark consists precisely in issuing a certificate for a trademark.

Registration takes place in several stages. On some of them, to facilitate the process and save money, it is recommended to contact specialists.

Stage one

The developed sign must be checked for uniqueness. And even before the application for registration is submitted. You can do it yourself. On the Internet, there are freely available databases of Rospatent (in our country, it is understood as the Federal Institute of Industrial Property - FIPS). But there are also organizations that specialize in checking the uniqueness of a registered mark.

This stage is quite responsible. Since the detected repetition will entail a refusal to register and the loss of the paid amounts of state duties.

However, the absence of repetitions is not yet a guarantee that Rospatent will pass the trademark. Department officials very often “meet” similar symbols or graphic images, and the applicant has to prove the uniqueness of the presented sign.

Companies that have undergone a similar procedure recommend that beginners turn to professionals. Firms specializing in evaluating the uniqueness of a manufacturer's trademark promptly conduct a reconciliation and issue a conclusion. They were enshrined at the legislative level in the early 90s of the last century.

Patent Attorneys

That is, the institute of intermediaries has officially appeared, whose duties include protecting property in the field of intellectual property. These are patent attorneys. It is they who represent the interests of the applicant for trademark registration in Rospatent. A patent attorney requires only details and an image of a trademark for his work. No further participation of the applicant is required. Naturally, this is more expensive, but the period for obtaining a certificate is reduced significantly.

The help of attorneys significantly reduces the time of registration and confirmation of uniqueness, which, in turn, reduces financial costs.

Today there are about 2,000 active patent attorneys in Russia. Their activities are regulated by civil law and the law of December 30, 2008 No. 316-FZ “On Patent Attorneys”. The fees and other payments of patent attorneys are regulated by Government regulations.

Stage two

The proprietary mark is always used unchanged. Therefore, special attention must be paid to the choice of the class of goods (services). For this, there is an international classifier (MKTU). In it, goods (services) are divided into 45 classes. Ten of them are devoted to services, the rest - to goods. Working with the catalog requires certain skills and knowledge. For example, the same name of a product (service) may belong to different classes, and you will have to search for it first by purpose, then by the material of manufacture, etc. To work with the classifier, Rospatent has developed guidelines. It is advisable to start your work at this stage with them.

Stage three

If the preparatory work is completed, you can file an application for your own trademark (its form is determined by the order of Rospatent dated March 5, 2003 No. 32). This will require a package of documents. It includes:

Application for registration, which will indicate the data of the individual (legal) person representing the trademark;

Documents confirming the payment of fees;

Image of the future brand (8 copies) with a mandatory application with a description of the logo and a list of goods from the international classifier;

Certificate of state registration individual entrepreneur, or a legal entity.

If a patent attorney was involved in the registration of a trademark, then a notarized power of attorney is required.

Stage four

Submission of prepared documents to Rospatent. There are several ways:

In person at any branch of the department,

Russian Post (with notification),

Fax (but originals are still required),

Electronic application on the official FIPS website (for this you need to install special software and get a key),

With the help of a patent intermediary.

On the day of receipt of the application with the attached documents, the secretary of Rospatent draws up it and informs the applicant of the registration number.

Stage five

It consists in tracking the status of submitted documents for registration of your own trademark. Documents accepted by the department undergo a formal examination. That is, the application is checked for the correctness of the drafting and content, the presence required documents and their copies, etc. The whole process takes about two months. If there are no comments, Rospatent takes it to work.

Further, a substantial examination begins, which can last up to six months. In it time is running active verification with trademarks of Russia and the world, which is accompanied by correspondence with the applicant. Usually experts require something to be clarified or supplemented. It is at this stage that unprepared (see stages one and two) applicants are “cut off”. If there are no comments and there is no need to defend one's innocence, the department makes a decision on the registration of the trademark. In this case, the applicant receives an official letter from Rospatent.

It is possible to shorten the application deadline. To do this, you must provide weighty arguments for the speedy receipt of a certificate of uniqueness. For example, you can specify that the products are shipped abroad.

Stage six

Obtaining a coveted certificate. After notification of a positive decision, the applicant must pay the state fee for obtaining a certificate and submit a payment document to Rospatent. Two months are given by law for the issuance of the certificate. During this time, the patented mark is entered into State Register and is published in the monthly official bulletin Trademarks. The resulting document must be renewed every ten years.

Having received it, the owner can sue and demand compensation for material and moral damage for the unlawful use of the trademark by third parties.

It is not that simple

trademark in modern world consumption has its pros and cons. The benefits of private labeling include:

Reducing the influence of competitors on the sale of goods (services), as well as advertising and marketing costs;

Establishing your own pricing system,

Margin increase,

Unconditional control over the distribution of goods (services) and its quality.

At the same time, the manufacturer faces some problems. For example, when releasing a product or producing high quality services, one should not overprice. For competitors will immediately occupy the vacated niche. For this reason, for example, well-known retailers do not allow similar product lines of competitors in their stores. In addition, the brand must be constantly promoted. And this is almost the main problem.

Possible mistakes

Most often they occur:

If the applicant tried to independently determine the classes according to the International Classifier;

The trademark was not unique;

The designation is described incorrectly or inaccurately (for example, color scheme);

There are inaccuracies in the details for paying the state duty;

The trademark contains elements of state symbols or images of famous people (without their permission). A list of all prohibited signs is given in Civil Code, article 1483.

The exclusive offers the trade mark "Metro". Focusing on the needs of their customers, whether they are small points of sale or professionals in the hotel or restaurant business, the company's experts develop their own Metro brands. These are practical, modern and affordable (for the cost) proposals. For some, this is a line of basic products (services), and for some, complete sets for serving tomorrow at a hotel at the lowest price.

Metro's portfolio already includes six active focus brands designed for professionals, as well as a number of additional offerings.

How to position a private label product

According to marketers, positioning is the art of creating a brand image in the mind of the target audience. That is, it should carry information about its advantageous difference from competitors. This is caused by combinations of such characteristics as distribution channels, touch, price, level of service, image (advertising impression, PR), etc. In a global sense, positioning is a company's activity aimed at convincing consumers that their products (services) are significantly different from competitors.

Private label, Private label or Private label is a trade mark or brand of a retail chain. Own trademark will allow the retailer to fully control the production, quality and pricing of finished products, manage the product matrix, profitability and sales margins. In Russia, under Your Own Trademark (PTM) computer cable and mobile accessories produced by GREENCONNECT Russia.

The advantages of manufacturing products underPrivate label in GREENCONNECT Russia:

• Full production cycle in St. Petersburg. Drawing up a product matrix, calculating profitability, developing unique models, packaging, production and distribution - all this is carried out by a team of GREENCONNECT Russia specialists.
• Operational timely production. After all approvals, development and production of test samples, the production of any order is possible in just 4-10 working days.
• High production capacity. At its own sites in St. Petersburg, GREENCONNECT Russia produces hundreds of thousands of units finished products per month. You will receive products under your trademark in a timely manner and in the volume you need.
• Unconditional warranty. The network's own trademark is, among other things, an image project. GREENCONNECT Russia cares about the reputation of its partners, so product quality comes first. Multi-stage control at all stages of production and transparent terms of cooperation will allow any retail chain to remain confident in the quality of goods under its own brand.
• Own research and development department. Design development and construction of product samples, testing specifications, development and branding of packaging - all this will be done for you by the GREENCONNECT Russia team.
• Reducing your logistics costs and o No minimum order quantity. We reduce your storage costs - we store the material, and we produce and supply products as needed. There is no longer a need to order large quantities and keep products in your warehouse. We will produce exactly the quantity that you need for your operations.

Own trade mark (private label, store brand) is assigned to goods produced by the manufacturer on the order of the retail chain, which promotes them under its own trade mark.

The history of private labels (PL) in our country is 10 years old - in 2001, for the first time in Russia, private label goods appeared in Ramstor supermarkets. By the end of the same year trading house"Perekrestok" has released several items under the brand name "Perekryostok". Then this trend was supported by Dixy, Lenta, Pyaterochka, Kopeyka and Auchan, which entered the Russian market in 2002.

Initially, the introduction of private labels was carried out by retailers rather haphazardly. The networks tried to cover a wide variety of product categories with private labels, both in the food and non-food segments. However, it quickly became clear that private labels bring the greatest benefit in the group of high-volume FMCG products. In this regard, there has been a strong trend to introduce own brands in food categories, which form the basis consumer basket, V seasonal goods, as well as in that component of the assortment matrix, which has the least brand dependence. And individual successes were not long in coming. So, for example, in Perekrestok, the total number of items sold under its own trademarks exceeds 1,000 items (these are Perekrestok and the Krasnaya Tsenza and Ice Age brands common to X5 Retail Group chains). "Lenta" is also constantly expanding the assortment line of the private label of the same name and the brand of the low price category "365". "Auchan", in addition to products on pata, offers customers private brands "Fortress", "Lakomo", "Don Gusto", etc.

The recent financial crisis and the associated hunt for low prices has led to a surge in interest in private labels from retailers and consumers. And when the economic situation stabilized, analysts noted that the majority of buyers remained loyal to retail chains' own brands. And today networks use private labels not only to increase profits, but also to strengthen customer loyalty. And this, according to analysts, is not a temporary trend.

See: S. Vakhrusheva. Situation on the market // Practice of trade. 2011. No. 7.

In retail, the process of creating and developing a retailer's own brands can be referred to as innovation. Innovation should be defined as a new benefit. And the benefits must be mutual. For the company, profit is profit, the key to its successful development. This applies to both manufacturers and retailers. trade enterprises. For the consumer, innovation is a value expressed in solutions that offer not just a product, but new benefits.

The main reason for the emergence of a private label is the concentration of trade and the growth of networks.

The relevance of the production and sale of goods under their own brands of a retail trade enterprise is due to the fact that chains want to earn more and at the same time have low, more attractive prices for consumers. If the store sells only well-known brands of the manufacturer, sooner or later it has to either negotiate lower prices with its supplier or reduce its own margin, which has a certain limit. To increase profits, it is advisable for a retail trade enterprise to produce goods under its own brand. Since the entire volume of such products is sold through the customer's network, the manufacturer does not need to widely advertise the product and distribute it. Because of this, the purchase and, accordingly, the final price of private label goods is lower than the cost of goods produced by manufacturers under their own trademarks.

The effect of savings on the purchase price can be (depending on the category of goods and the terms of the transaction) 5-10% or more, which, of course, is attractive for a buyer who receives a quality product at a lower price.

If we consider world practice, then the share of sales of private label goods in percentage in America and Europe it can reach the level of 30-40%, and according to forecasts in some networks it can be brought up to 60-80%. The same European shoppers want to see more and more private label products in the chains where they are used to shopping. If earlier the order for the production of private label products concerned the low-segment, today it is increasingly possible to meet private label products in the middle-, as well as in the premium-segment.

In Wal-Mart stores (the world's largest retail chain; American company) approximately 120,000 different types of goods. Of these, private label products are probably less than 10,000 items. This is a small percentage. They manufacture them in all Asian countries. Only in China it is 800 enterprises. Private label products are more popular in Europe than in the US. But today, one of Wal-Mart's goals is to increase the percentage of private label products.

This is a really important goal. Let me give you an example from the USA, where "Tide" is one of the most popular brands of washing powder, the manufacturer of which is the company "Procter and Gamble". And what does Wal-Mart do? Creates his own formula"Tide" and produces it in its production. This laundry detergent is no longer called "Tide", it's a Wal-Mart brand. This is where Wal-Mart's "same quality at a lower price" strategy comes into play. The reason they do this is to put pressure on brands to lower their prices. All branded goods manufacturers are at war with retailers. If Wal-Mart had the opportunity, it would only sell private labels. And all this because of the price premium, the margin. Retailers earn more money on private label than on branded goods.

See: Today, one of Wal-Mart's goals is to increase the percentage of private label products. Interview with Michaelol Bergdahl // RETAIL.RU. April 3, 2007. URL: retail.ru/news/20432/? sphrase_id=303481

The presence of own brands allows stores to:

• - fully control the process of price formation;
• - reduce the cost of promoting goods;
• - offer customers under their own brand all products without exception, including vegetables and fruits.

Private label development goals:

• - promotion of the brand on the market of goods;
• - Increasing profitability by reducing purchase prices;
• - increasing the competitiveness of the network;
• - creating a tool to increase customer loyalty.

Competitive advantages of private label:

• - The retailer selects manufacturers on the basis of experience and market analysis and guarantees consumers the quality of goods under their own brand.
• - The manufacturer does not bear the cost of advertising campaign. The retailer creates the image of goods and guarantees their quality, and also promotes these products by in-store means - a special display, information support, etc. This allows you to reduce the cost of a number of products under your own brand. In accordance with world practice, many private label products are cheaper than their absolute counterparts. According to ACNielsen research in 36 countries and 80 product categories, private label products are on average 31% cheaper than branded equivalent products. In Russia, discounts are not yet so significant, but they are available and range from 5 to 25%.
• - A retail trade enterprise has the opportunity to conclude contracts with manufacturers for the supply of products with unique properties.
• - The presence of private label products facilitates consumer choice, especially in those product categories where products of low brand dependence are presented.

Private label social features:

• - The retail network assumes responsibility to the buyer for the quality of goods under its own brand. The guarantor of quality is the great experience of the company's buyers in choosing suppliers, as well as the fact that the company's employees have special knowledge about food products. It can be said that in this case, the retail chain acts as an expert in the field of food and non-food consumer goods, offering the buyer its experience and knowledge.
• - Private label providers often include small regional companies that produce high quality products from natural ingredients, but for a number of obvious reasons they cannot break into the capital market. For such suppliers, this is a serious "breakthrough", since cooperation ensures a stable production load.

When determining product groups, the retailer proceeds from the following selection criteria:

• 1) high turnover;
• 2) everyday demand(goods that attract the consumer to the store more than twice a week and, as a rule, have a limited shelf life - perishable goods, meat and dairy gastronomy, etc.);
• 3) socially significant goods stable demand, which form the basis of the consumer basket of the population - cereals, tea, sugar, etc.;
• 4) high-margin goods;
• 5) goods with unique consumer characteristics;
• 6) novelties promising from a marketing point of view.

Goods under private label are beneficial for everyone: from manufacturers who get the opportunity to sell stable sales without promotion costs, and buyers who purchase goods of guaranteed quality at a lower price, and retail chains, since the purchase prices for such products are lower than for brands that have already invested considerable advertising costs.

Manufacturers involved in the implementation of the private label project also note its prospects. Little-known regional companies that produce high quality products can break into the capital market and ensure a stable load of their own production.

The release of goods under private labels is of interest not only to chains, but also to manufacturers. The goals of manufacturers in working with private labels look like this: the opportunity to be represented in large retail chains, obtaining additional sales volumes and, as a result, capacity utilization, and assortment expansion.

All retailers agree that the combination of quality, reliability and service is a key issue when choosing a supplier of private label products.

It is important that the quality meets retail requirements and remains high throughout the entire period of cooperation. And the price is also important: the quality must match it. The supplier's reputation also plays a significant role. It is also important that the supplier has the opportunity to fulfill the order volume that retailers need, and that there are no interruptions in the supply of goods.

Unfortunately, small producers do not always have the opportunity to produce private labels due to various difficulties.

The larger the network, the more difficult it is to saturate it with goods. Therefore, large networks often choose large suppliers for private labels: there is a guarantee that at least they will not let you down with the volume, and there is experience in working together (the manufacturer knows the requirements of the network - the network knows that he can be trusted).

Speaking about the choice of private label suppliers, one should especially mention what they are afraid of working with a private label: suppliers are afraid of a short-term contract. What if a competitor offers a lower price - and the products of the original supplier will remain unclaimed, perhaps the production lines reconfigured for a specific private label product will stop, and the prepared packaging will turn out to be unnecessary?

None of the buyers is interested in a short-term contract if cooperation with the manufacturer suits. Who wants to renegotiate contracts once again, draw up a lot of paperwork, build business processes? The supplier is changed not because the customer suddenly wanted it, but, for example, because the control samples were good, and then complaints from customers began to come in about the product - it became tasteless.

Work on the creation of STM should be close, bilateral.

See: S. Vakhrusheva. "Choosing a Private Label Supplier" // Practice of Trade. 2011. No. 7.

Despite the profitability of private labels, national label manufacturers are very concerned about their growth in popularity and strength. Some analysts predict that private label products will crowd out all but the largest national brand manufacturers. The following reasons can be mentioned: the growing quality of private label products, the emergence of private label in premium segments, the penetration into new product categories (cosmetics, soft drinks, clothing, beer).

In the past, consumers ranked different brands in a brand ladder, with their favorite brand at the top and the rest ranked in descending order of preference. Today there are signs that brand parity is coming - equal recognition of different brands. The enduring preference for a particular brand of product is being replaced by a selection of products from several recognized brands, depending on which of them in this moment discounts apply.

The growing power of private labels is by no means the only factor influencing the weakening of the positions of manufacturers' brands. Consumers have become more price sensitive. Due to the reproduction of the qualities of the best branded products by competing manufacturers and the largest retailers they note the great similarity of products under different brands. Coupons and special offers have taught an entire generation of consumers to shop primarily during sales periods. In addition, the reduction of advertising spending by many manufacturers to 30% of the promotional budget has weakened their brand capital, and the endless expansion of brand families and boundaries has robbed them of individuality.

According to the experts of the Federal Purchasing Union ZLO "System" TZS ", in the short term, the volume of sales of goods under the retailers' own trademarks on Russian market will grow by 50-70%. Such high growth rates are associated with an unstable economic situation, forcing buyers to save on brands. Retailers are starting to work with private label products to get additional margins, and manufacturers are interested in opening new production facilities.

Competition between retail chains in the aspect pricing policy becomes more tense. In this regard, more and more players in the market are paying attention to working with goods under their own brands.

The vast majority of retail chains offer customers private labels, the quality of which is comparable or superior to the characteristics of branded products. The absence of marketing budgets and a ready-made distribution system reduce the cost of goods by 25-30%.

The Federal Purchasing Union CJSC Sistema TZS, as part of the implementation of strategic objectives for the development of the company, plans to increase the turnover of goods produced under its own trademarks by 80-90% in 2012. Growth rates exceeding the market average will be achieved due to an increase in sales volumes, an increase in the number of chains participating in the project, as well as by expanding the product range.

See: FZS is authorized to declare: The private label market will grow by 70% // RETAIL.RU. December 29, 2011. URL: retail.ru/news/60387/?sphrase_id=259793

However, despite the tangible benefits, using private labels has a number of disadvantages. First, in some cases, a lot of money has to be invested in product development, creating a favorable image and informing consumers; secondly, the problem of product quality control is exacerbated, the solution of which also requires significant additional costs; thirdly, additional training of sales workers in methods of selling private labels, less well-known than the brands of manufacturers, is necessary.

In turn, large manufacturers with strong trademarks began to use numerous techniques to counter private labels. Manufacturers of national brands can counter private brands through a range of targeted activities.

• - Manufacturers of nationwide brands cut costs and cut prices to counter retailers' own brands.
• - Manufacturers are constantly improving the characteristics of their products, such as quality level, functional properties, external design, in order to attract new users and intensify consumption.
• - Manufacturers of national brands can audit their brand portfolio in order to focus on the strongest brands in order to counter store brands. They may also introduce "brand fighters" into their product line that oppose their own brands in the "acceptable quality - low price" segment.

Companies that own national brands can sell some of their products to the distribution network by entering into an agreement that it will be sold under a private label. However, not everyone can become a partner of a large retail chain. All chain stores impose strict requirements on manufacturers. The main criteria for choosing suppliers are: product quality, the company's production capacity, its financial stability and time on the market. The most important criterion for selecting partners for networks is the quality of goods. No one wants to embarrass himself in front of buyers by giving his name to a low-grade product. Therefore, any potential partner of a retail company must prove that there will be no problems with quality.

Goods quality assurance for a retailer can be independent expertise or the fame of a manufacturer that values ​​its image and has its own quality laboratories. The goods must comply with the regulatory and technical documentation for a given product group. In addition, the manufacturer must not only initially declare high quality, but also maintain it constantly. If an independent examination shows its deterioration, as a rule, one has to part with such a manufacturer.

Another important question - productive capacity companies. The release of goods under their own brands is started only by large networks with dozens of stores. Accordingly, the manufacturing partner must be able to fulfill a large order. As a rule, retail trade enterprises choose as partners the producers occupying the second-third or fourth place in their market segment. They do not work with a leading enterprise for the reason that it is successful in itself and at some point it will face a dilemma: either create its own brands or work for retailers. And such a company itself, if it has powerful marketing, good brand capital, will not cooperate with them.

Very often, negotiations between retailers and manufacturers come to a standstill during the discussion of the purchase price of the goods. The price should arouse interest among buyers, but allow both retailers and manufacturers to have their own profit.

Leaders in the development of private labels in Russia have been identified

Magnit, X5 Retail Group, Auchan, Metro Cash&Carry, Lenta, Dixy and Maria-Ra became leaders in the development of their own brands according to the INFOLine Private Label Profi rating in 2010 and the first half of 2011.

For the first time, the INFOLine Agency, especially for the forum "Private Trademark - 2012", organized by the Imperia KVK, has prepared a rating of Russian FMCG chains for the development of private labels, based on the share of private labels in the chains' revenue in 2010 and 2011. (in %), shares of private labels in the total number of SKUs in 2010 and 2011 (in %), total sales of private label goods (in rubles), total number of private label SKUs (in pieces) and a number of other indicators.

See: Private label leaders // RETAIL.RU. November 29, 2011. URL: retail.ru /news/59591/?sphrase_id=259793

According to market participants, amendments to the Code of Administrative Offenses (CAO), adopted at the end of December 2010, will help increase private label sales. The amendments provide for significant penalties for violation of contractual relations between suppliers and retail chains. Such accusations can cost the company 5 million rubles. That's why federal networks today they are significantly reducing their assortment, and products under private labels are being introduced into the vacant places. The production of goods under private label allows the network to combine the roles of supplier and trader, eliminating the possibility of claims for unfair contractual practices. According to the practice established in Russia, private labels are positioned by many chains in the lowest price category. Just in the one where, during negotiations with the supplier, the retailer is interested in the lowest purchase price in order to list the product with a very modest margin and attract the consumer with a price. Now the tough negotiating position of networks by some suppliers can be interpreted as imposing conditions. Therefore, it is much easier for a retailer not to purchase a product, but to produce it himself, placing orders for contract manufacturing developing packaging.

According to forecasts, by 2012 the share of private labels in the turnover of FMCG retail trade in Russia will be at least 3~3.2%.

The total volume of private label sales in the world exceeded 380 billion euros. According to INFOLine, the share of private labels in the global trade turnover in 2010 was 22%, and by 2020 it may increase to 30%.

The private label direction is being developed not only by federal retail chains. Small regional retailers are also actively promoting products under their own brands. There is also a common umbrella brand - STM "Soyuznaya Marka", which was launched in May 2009 by the Union of Independent Networks of Russia (the Union of NSR unites 44 regional grocery chains in 46 regions, more than 1.3 thousand stores). outlets). The Federal Purchasing Union (CJSC Sistema TZS) created by the NSR Union produces over 100 types of goods, the sales volume of which exceeded 400 litas rubles during the year and a half of the project development.

Products commissioned by chains can be divided into two categories: goods of a certain brand and the so-called goods of the first price. For example, the Auchan network offers goods of the first price: only the name of the product (sugar, tea, soap or cotton buds) is indicated on the package with a yellow-green stripe. "Auchan" also offers its own brands: "Lakomo" (dairy products), "Bed of luck" (canned food), "Boncafe" (coffee), "Don Gusto" (cereals and pasta), "Fortress" (alcoholic drinks), CleenOK (cleaning products).

See: N. Novopashina. The desire to reduce the cost of the product damage to quality hinders the development of private label in Russia // However [Electron, version of the journal]. March 30, 2011. URL: odnako.org/magazine/material/show_9897/

Anyone who visits supermarkets from time to time has noticed that on almost every shelf (whether confectionery, drinking water or household chemicals) next to the products of "ordinary" brands there are goods designed in the store's corporate colors and costing less than their "branded" counterparts. These are supermarket own brand products. About why such products retail chains how they develop them and who buys them the most, representatives of large retailers operating in Russia told.

Elena Savchenko, Director of Development of Private Labels, DIXY

- When did your company start developing its own brand?

- DIXY has been producing goods under its own trademarks for the past ten years. In 2005, the development of products was non-systematic: the first in that period were pasta, glazed curds and, oddly enough, a branded shoe spoon with the logo of the network. Over the past years, the direction of STM in "DIXY" has undergone many changes. Today it is one of strategic directions. Trademarks have a clear positioning to control the quality of products, a multi-stage audit system has been developed, where each of the products is regularly evaluated for effectiveness and demand among buyers.

Private label for DIXY is a competitive advantage. Private labels are unique because they are not universally represented. It is they who are important tool formation of loyalty of buyers who come to the convenience store for daily purchases. In addition, by organizing the production of such goods on our own, we get the opportunity to both restrain price inflation and ensure the uninterrupted filling of the shelves with products of daily necessity. All this helps to retain customers even during periods of economic instability.

- How does the company feel about investments in private label development in 2016?

- In 2016, DIXY will continue to work not only in the field of improving the efficiency of existing projects under its own trademarks, but also in the development of new ones. Retail chains are a lever to curb inflation, and the release of basic ration products is an important tool. Quality products at the best price under their own brands have always been and will be attractive to buyers.

- In what categories are buyers most inclined to buy private labels?

- Our private labels show high sales figures. For example, the share of own brands in the turnover of dairy gastronomy is more than 22%, and in grocery - more than 35%. We do not limit ourselves to categories for the release of new projects. DIXY also produces goods in brand-dependent groups - such as coffee, strong alcohol, beer, children's products. Such products show the greatest demand in the middle price segment, which is about 9% of the total share of private labels in the turnover.

As of the end of 2015, the DIXY assortment included about 600 items of goods under its own trademarks. Market lines have already been formed, so we do not expect their significant expansion. Among the promising areas for ourselves, we can point out soft drinks and confectionery.

We are not interested in crowding out well-known brands. Our task is to offer a balanced assortment that would meet the needs of customers in various price categories. Private label products are designed to complement the shopping basket and act as an economical alternative.

- Do you choose Russian or foreign suppliers?

- Products under their own trademarks "DIXY" are produced mainly Russian enterprises: more than 90% of all private label products in the network are domestic products. The remaining percentage units are imported goods, which are traditionally produced in foreign countries. These are products such as olives, olives, olive oil, wines, fruit preserves, etc.

Russian enterprises produce for DIXY goods from traffic generating categories. These are dairy and meat gastronomy, cereals, flour, bread, canned vegetables and confectionery. The assortment also includes domestic alcoholic drinks: wine, cognac, etc.

Sylvan Rishon, project manager for the development of his own brand "Leroy Merlin"

- What categories are the most difficult for private label development?

- Firstly, these are categories in which there are already strong brands. Secondly, those that represent technical difficulties in production, namely chemical products. These directions reveal difficulties for the development of private label products. We must invest more in order to gain popularity. I can say that our company started this process a few months ago, and the first results will be visible already in 2017.

- In which private label category do you see potential?

- Here it is important to point out two vectors of potential development. First of all, the current economic situation encourages the development of private labels: buyers choose cheaper goods, but still prefer high-quality ones. Secondly, if we talk about the potential for the future, we see the middle premium segment, where we want to make products more "democratic" for consumers. This means maintaining the same level of quality and design as well-known brands, but without the use of marketing techniques so that the client pays only for quality.

- Are there any examples of success among your private labels that were able to take a significant share on the shelf and displace famous brands?

- Yes, we are successfully gaining momentum and winning market share in the development of private labels in the areas of "Decor" and "Instruments". They are showing good results sales. For example, we invest heavily in the quality of the Dexter brand, which is becoming increasingly popular with buyers in France, Italy, Spain, and Russia. Thus, we are in direct competition with well-known brands.

Marina Rozhdestvenskaya, director of marketing department "BILLA"

- How do you control the quality of private label goods? Are there any specifics in the selection of suppliers supplying private labels?

- In the current economic situation, buyers have become more loyal to private label products. Customers start saving and looking for products for more low prices. "BILLA" pays great attention to the development of lines of its own brands - Clever (goods with the lowest price on the shelf and proven quality) and BILLA (high quality products for favorable price).

The maximum share of private labels in "BILLA" is achieved in such categories as dairy gastronomy and bakery products.

The buyer's interest in private labels depends not only on the economic situation that forces them to save money, but also on the choice of the consumers themselves, who trust the quality of such goods and are ready to switch to their purchase. This confirms the annual increase in the share of its own brand.

In 2016, the BILLA chain plans to increase the share of private labels by 50%. Today, the market pays great attention to the development of private labels as competitive advantage networks. This is, of course, related to the economic situation. After all, if the buyer less money, he will switch to a cheaper non-brand counterpart, but not of inferior quality. So, in 2015, the total growth of the private label share amounted to 70%, and in 2016 the company plans to increase it by 50%. Particular attention will be paid to fresh categories.

Speakers - participants of the exhibition "Own Trade Mark" dedicated to the creation of trade marks.