GfK consumer survey: brands are superior to private labels
From the consumers' perspective, brands are significantly higher in quality, more emotionally appealing, and more distinctive than retailers' private labels. The only advantage that shoppers see in private labels is the price.
This is shown by the current study "Brands and private labels 2011", conducted by GfK on behalf of the branded goods association Promarca among 1,000 Swiss people. For Swiss consumers, brands clearly stand out from retailers' own brands, as the GfK study shows, according to the branded goods association Promarca on Presseportal.ch. Brands would particularly stand out in the following characteristics: unmistakable (76%, +30 percentage points compared to own brands), emotional (51%; +25 percentage points) and high quality (83%; +19 percentage points). In addition, brands are preferred because they are more innovative and the population trusts them.
Own brands benefit from brands
Private labels, on the other hand, know how to gain an advantage from the consumer's point of view, mainly through price, as the Promarca association writes. Accordingly, the respondents rate them as suitable for everyone (76%; +27 percentage points compared to brands). However, it should be borne in mind that in many cases a lower price level is only possible because private labels act as free riders for brands, says Anastasia Li-Treyer, Director of the Swiss branded goods association Promarca. It has been observed time and again that copycat products are strongly based on the originals and thus benefit from the excellent reputation of branded products. In this way, they avoid the costs of product development and advertising.
Retailers are business partners and competitors at the same time
Private labels have a positive impact on consumer welfare when they occupy areas in which brand manufacturers are not active - which requires genuine innovation. If, on the other hand, private labels attempt to compete directly with branded products, they are primarily a means of increasing the buying power of retailers, the association continues. The dual function of retailers as customers of brand manufacturers on the one hand and as their competitors on the other opens up opportunities for abuse.
