Own Brand vs. Manufacturer Brand: What Do Customers Want?

The Private Label As A Discounter Solution – How It All Began!

Private labels are now an important retail tool for achieving several goals – including:

• More independence
• opportunity for differentiation
• Rapid response to customer needs
• Higher margins
• And much more

Own brands have emerged from the interplay of various reasons: Traditionally, discounters have not been supplied with manufacturer brands, which is why they have relied on own brands from the very beginning. The increasing success of the discounters then of course also moved the full-range retailers, and these gradually introduced their own brands at entry-level prices.

A Strategic Dilemma For The Manufacturer Brand

The goal of the full-line suppliers was to offer customers the range of discounters with the help of their own brands in the same quality at the same price. The continued success of the discounters naturally led to a strategic dilemma for manufacturer brands: do they stay exclusively with the full-range suppliers or will distribution also be extended to the discounters, which offer significant sales volumes?

Customer Orientation Determines Success

The recent history is well known, there are now many strong brands at Aldi, Lidl and Co. As expected, the reaction of the full-range suppliers was not characterized by great joy and as a key account manager you had to have good nerves. In the end, the decisive factor is customer orientation in order to be successful in the long term. So what do customers want? Own brands or manufacturer brands?