Brand name is one product feature that helps consumers recognize and distinguish between commodities. It should be selected with caution because it effectively and economically captures a product's main theme. It is quickly noticed, and its sense can be immediately stored and recalled in the brain. The selection of a brand name necessitates extensive testing. The product is not always synonymous with the brand name, but still the products has a great impact towards to its brand name.
Marketing activities of a business have a direct effect upon their revenue and market share, but they are not the only factors affecting their respective industries' overall output. It is also important for business success to create a positive brand image with their product quality through marketing activities. Basically, in the market there were existing same image product but a different quality where in it is call by private labels or also known as a generic product. Private label goods or services are usually produced or offered under the branding of another business by a single company. A wide variety of sectors, from food and cosmetics to drugs, are eligible for private labeling and these private labels products has a vastly impact to some branded products.
According to Harvard Business Review written by John Quelch and David Harding, the power of the private label varies generally with economic circumstances. This is why market shares usually increase in stronger times when the economy is struggling and declining. Private market shares in the last 20 years have averaged 14% of supermarket sales of US dollars. In the depth of the recession of 1981–1982, it stood at 17% of the sales; in 1994, with the large number of media-listed private labels, it was down more than two% at 14.8%. Secondly, brand-name producers will moderate the challenge of private label products. They can actually regulate it to a significant extent: More than 50% of US labeled consumer packaged goods producers are made private labels.
On the other hand, private labels are on rise but still there were some consumers who prefer branded products with a certain reasons and many products are not feasible on a private label basis. For example, this annual percent rate sales growth on year 2014 , according to PLMA by Nielsen that the store brands got +2.5 % and the national brands got +1.1%.The private label brands have a decent future, as they offer physically and even quality-wise similar products to that branded products at a lower price to a price-sensitive market. But unfortunately, we can’t deny the fact that some of the consumers will always be preferred for the brand positioning and incredible value. The private labeling brands sell physically and even quality goods identical to those marketed products at a lower price to a price-sensitive consumer, and thus have a decent future. Unfortunately, we cannot deny that some consumers are still preferred for the brand position and incredible value.
According also to grocery dive written by Carolyn Heneghan (2016), for the past years, Private label products were easily selected on supermarket shelves decades ago. Although major brands had colorful packaging that defined product quality with photos and phrases, private label brands with flawless packaging and branding were labeled "generic." In comparison with the popular labels next to which they stood, consumers sometimes considered private label goods as of inferior quality. All this has changed now, though. As retailers look for ways to distinguish and grow consumer loyalty, private labeling investments became a focus. According to a Private Label Manufacturers Association's 2016 Private Label Yearbook, Store brand sales hit an all-time high of $118.4 billion last year and represented a record 17.7 percent of the overall market. Apart from generics being introduce in at least some product categories, consumer expectations of the consistency of major brands anmes and private brands are altted. The improved quality of private brands might harm domestic brand sales, whereas private brands could have detrimental impacts, since generics can give cost-conscious shoppers even more cost saving.
According to the study entitled “The Effect of Generic Products on Consumer Perceptions and Brand Choice” apparently, as generic products are introduced into at least some categories, consumer expectations of prices, the price quality ratio or "value" of national, particularly private brands, can be affected. The improved quality image of private marks could hurt the sales of national brands, while private brands would be adversely affected, because generic products give pricing savings even more to price-conscious consumers. It would seem likely that this impact could not materialize at least to the same degree in other product categories -especially in those in which consumers only see minor differences in quality within brands. The strengths and limitations of all types of products and styles of production are critical for branded product manufacturers to recognize. This way, they can compete better with the retailers' brands or work together with them and not lose their market shares and continue have a significant place in the market.
