A COMPARITIVE SURVEY OF PRIVATE LABEL VS.

NATIONAL BRAND IN FOOD RETAIL - ITS EFFECT ON

FOOTFALL, SALE AND CUSTOMER SATISFACTION

Research report submitted to Professor Kingshuk Bhadury

SECTION B
MBA (2013-2015)
Submitted by:
NAME
Mahesh Pillai
Ayush Hirwani
Shagun Pandey
Samrat Kaushik
Disha Shah
Jerin George

ROLL NO.
04
12
16
21
26
29

NAME
Mihir Haryal
Dhaivat Bakshi
Shrey Dutt Sharma
Purbasha Mandal
Atish Christopher Clifton
Rahul Pratap Singh

ROLL NO.
34
39
44
49
57
73

1 | Page

ACKNOWLEDGEMENT

We wish to express our gratitude to Prof. Kingshuk Bhadhury for his guidance and support in
the duration of this project; our respondents who included customers as well as managers of
various Food Retail stores who cooperated and extended their efforts for the successful
completion of this endeavour. We also extend our thanks to the staff and faculty of SIMS for
providing the necessary infrastructure for our project.

2 | Page

TABLE OF CONTENTS

S.NO.

CHAPTERS

1.

Synopsis

2.

Introduction
Inroduction to Indian Retail Industry
Details of Stores
Research Methodology
Topic
Research Objectives
Size of Sample
Pilot Study
Data Bifurfication
Data Analysis and Interpretation
Customer Analysis
Retailers Analysis
Observation and Findings
Customer Analysis
Retailers Analysis
Conclusion, Recommendations and
Suggestions
LIST OF TABLES

2.1
2.2
3.
3.1
3.2
3.3
3.4
3.5
4.
4.1
4.2
5.
5.1
5.2
6.

PAGE NO.
1
4
4
6

S.NO.
1

TABLE HEADING
Demographics of Respondents

Most common way of purchasing food products

Identification of a Private Label Brand

Customers Acquaintance with Private Label Brands

Customers Acquaintance with National Brands

Key motivators for purchasing a product

Comparison of Pricing of Private Label Brand and National Brand

Comparison of Quality of Private Label Brand and National Brand

Comparison of Packaging of Private Label Brand and National Brand

10

Promotions as a motivator for purchasing food products

PAGE NO.

3 | Page

11

Importance of brand for purchasing groceries

12

Importance of brand for purchasing other food items

13

Purchase of Private Label Brand on recommendation of others

14

Repeat Purchase of Private Label Brand

15

Frequency of visiting a retail store

16

Most frequently visited top 3 stores

17

Parameters for selecting a store brand

18

Willingness of customers to recommend their store brands to others

19

Space occupancy of Private Label Brand and National Brand in a store

20

22

Percentage contribution of Private Label Brand and National Label Brand

towards Monthly sales
Percentage contribution of Private Label Brand and National Label Brand
towards Monthly profits
Ways of promoting a Private Label Brand

23

Pricing Strategy followed for a Private Label Brand

24

Comparison of the discarding of Private Label Brand and National Brand

25

Special Staff for sale of Private Label Brands

26

Ways of Promoting loyalty among customers purchasing Private Label

Brand
Effect of availability/ non- availability of Private Label Brand on footfall

21

27

LIST OF FIGURES
S.NO.
1

FIGURE HEADING

PAGE NO.

Age of the Respondents

Gender of the Respondents

Occupation of the Respondents

Income of the Respondents

Most common way of purchasing food products

Identification of a Private Label Brand

Customers Acquaintance with Private Label Brands

Customers Acquaintance with National Brands

Key motivators for purchasing a product

10

Comparison of Pricing of Private Label Brand and National Brand

11

Comparison of Quality of Private Label Brand and National Brand

4 | Page

12

Comparison of Packaging of Private Label Brand and National Brand

13

Promotions as a motivator for purchasing food products

14

Importance of brand for purchasing groceries

15

Importance of brand for purchasing other food items

16

Purchase of Private Label Brand on recommendation of others

17

Repeat Purchase of Private Label Brand

18

Frequency of visiting a retail store

19

Most frequently visited top 3 stores

20

Parameters for selecting a store brand

21

Willingness of customers to recommend their store brands to others

22

Space occupancy of Private Label Brand and National Brand in a store

23

25

Percentage contribution of Private Label Brand and National Label Brand

towards Monthly sales
Percentage contribution of Private Label Brand and National Label Brand
towards Monthly profits
Ways of promoting a Private Label Brand

26

Pricing Strategy followed for a Private Label Brand

27

Comparison of the discarding of Private Label Brand and National Brand

28

Special Staff for sale of Private Label Brands

29

Ways of Promoting loyalty among customers purchasing Private Label

Brand
Effect of availability/ non- availability of Private Label Brand on footfall

24

30

5 | Page

6 | Page

Chapter 1
Synopsis

1 | Page

2 | Page

3 | Page

Chapter 2
Introduction
1.1 Introduction to Indian Retail Industry:
The Indian retail industry is the fifth largest in the world. Comprising of organized and
unorganized sectors, India retail industry is one of the fastest growing industries in India,
especially over the last few years. Though initially, the retail industry in India was mostly
unorganized, however with the change of tastes and preferences of the consumers, the
industry is getting more popular these days and getting organized as well. With growing
market demand, the industry is expected to grow at a pace of 25-30% annually. A McKinsey
report 'The rise of Indian Consumer Market', estimates that the Indian consumer market is
likely to grow four times by 2025. .According to the Investment commission of India, India is
expected to be among the top 5 retail markets in the world in 10 years. India's overall retail
sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion by 2018, at a
compound annual growth rate (CAGR) of 10 per cent. As an emerging market with high
growth rates, consumer spending has risen sharply as the youth population (more than 33
percent of the country is below the age of 15) has seen a significant increase in its disposable
income. Consumer spending rose an impressive 75 per cent in the past four years alone.

4 | Page

According to a new study by global management consulting firm AT Kearney says that in
India, apparel, along with food and grocery, will lead organised retailing in India. India has
one of the largest numbers of retail outlets in the world. It further specifies that rural market
is projected to dominate the retail industry landscape in India by 2012 with total market share
of above 50 per cent. Thus, according to industry experts, the next phase of growth is
expected to come from rural markets, with rural India accounting for almost half of the
domestic retail market. In order to be truly successful, retailers must advance from the
generic or store brand mindset of the past to a new private label paradigm. Many retailers
have begun to describe their private label brands as own brands because there is
recognition that these proprietary, exclusive offerings are tools that represent momentous
power and potential for the retail store.
1.2 Private Label Brands:
Store brands are products developed by a retailer and available for sale only by that retailer,
some retailers may attempt to utilize this measure of exclusivity to differentiate them from
the competition. Store brands help retailers to increase sales which indirectly add up to the
bottom line. However store brands are priced 20-30% less than the branded goods. Store
brands can be used as a powerful tool i.e. the general feeling is that in times of recession
private labels increase their market share but tend to maintain that market share as economies
recover.
1.3 Benefits of Private Label Brands
Since manufacturers' (producers') brands have large advertising expenditures built into their
cost, a private labeler is able to buy the same goods at a lower cost and thus sell them at a
lower price and/or at a better profit margin. In addition, private labelers have more control
over pricing and are able to advantageously display their own brands for maximum impact.
For example, a grocery store can quickly reduce the price of its own PLB in order to meet or
beat a competitor's price. Or the grocery store can create a special point-of-purchase
advertising display and/or give its brand predominant shelf space in order to boost sales.
PLBs are usually priced lower than comparable manufacturers' brands and therefore appeal to
bargain-conscious consumers. As already mentioned, retailers like PLBs because of their
potential to increase store loyalty, chain profitability, control over shelf space, bargaining

5 | Page

power over manufacturers, and so forth. Among consumers, one obvious reason for their
popularity and growth is their price advantage over national brands.

1.3 National brands:

The brand name of a product that is distributed nationally under a brand name owned by the
producer or distributor, as opposed to local brands and private label brands.
1.4 Present Scenario:
Private labels or store brands are on escalating journey for growth in last few years in Indian
market. The growth of private label brands is quite impressive in food and grocery segment,
in spite of presence of leading national manufacturers brands in most of the categories.
Though, initially PLBs were considered as cheap alternatives and therefore visible in copycat
and generic categories, today they are a part of well-defined retail mix strategy, are developed
in value innovators and premium categories for profit maximization and customer loyalty.

2 Introduction to Food retailers in India:

2.1 STARBazaar

STAR Bazaar, A Tata enterprise, is a multi-format hypermarket chain present in Mumbai,

Bengaluru, Pune, Ahmedabad, Surat, Chennai, Kolhapur and Aurangabad.
Each of our 15 stores are spread over a large area (40000 80000 sq. ft.) and offer the entire
spectrum of product categories, ranging from fresh food, grocery, apparel, general
merchandise and consumer durables. We provide a range of more than 30,000 items at great
prices, showcased in a modern shopping environment and backed by the strong values of the
6 | Page

Tata Group. We also offer a wide range of services and facilities to our customers such as
express counters, free wheat grinding, live bakery, free home delivery within a specified
radius and for a minimum value, modern shopping environment, serviced by friendly staff
and shopper friendly return policies, trial rooms and alteration facilities.
Star Bazaar is a unit of Trent Hypermarket Ltd which is a subsidiary of Trent. Trent, a Tata
Group entity in retailing, is a Rs. 1,845 Crore enterprise with 100 stores in 38 cities across the
formats: Westside, Star Bazaar and Landmark.

2.2 Auchan

Auchan is one of the worlds largest hypermarket chains with 616 hypermarkets in 12
countries in Central and Northern Europe, Russia, and China. Auchan is now in India with 13
hypermarkets operating under a franchise agreement with Max Hypermarket India Pvt. Ltd of
the Landmark Group. The company has a 44.4 billion euro turnover.
Auchan is a one stop shopping destination as it meets all the daily needs of a consumer by
providing grocery, fruits & vegetables, meat & fish, wine & spirits, kitchenware, electronics,
apparel, health & beauty, furniture & much more, under one roof.
2.3 D Mart

Avenue Supermarts Ltd (ASL) owns and operates hypermarkets and supermarkets by the
store name D-Mart.
D-Mart seeks to be a one-stop shopping destination for the entire family, meeting all their
daily household needs. A wide selection of home utility products is offered, including foods,
toiletries, beauty products, garments, kitchenware, bed and bath linen, home appliances and
much more. D-Mart first opened its doors in the Mumbai region in 2000 and has grown into a

7 | Page

trusted and well-established shopping destination in Maharashtra, Gujarat, Andhra Pradesh

and Karnataka. D-Mart is now looking forward to growing its stores across India. D-Mart's
expansion began in 2007, when stores were opened in Ahmedabad, Baroda, Pune, Sangli and
Solapur. Today D-Mart is established in 70 locations across Maharashtra, Gujarat, Andhra
Pradesh and Karnataka.
At ASL, the main focus is in deriving excellence in customer service through systemic
training and rigor at work. The core values include simplicity and humility in their people and
strongly believe that integrity and merit is the only route to growth.
2.4 Reliance Fresh

Reliance Fresh is the convenience store format which forms part of the retail business of
Reliance Industries of India which is headed by Mukesh Ambani. Reliance plans to invest in
excess of INR250 billion in the next 4 years in their retail division. The company already has
453 Reliance Fresh outlets across the country. These stores sell fresh fruits and vegetables,
staples, groceries, fresh juice, bars and dairy products.
A typical Reliance Fresh store is approximately 30004000 square feet and caters to a
catchment area of 23 km.
Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trends, Reliance Footprint,
Reliance Wellness, Reliance Jewels, Reliance Timeout and Reliance Super are various
formats that Reliance has rolled out.
2.5 Godrejs Nature Basket

Natures Basket is a specialty food store, owned by a division of Godrej Industries. The chain
has a supermarket store format operating small stores in premium residential neighbourhoods.

8 | Page

Nature's Basket currently has 27 outlets across Mumbai, Delhi, Pune, Gurgaon, Hyderabad
and Bengaluru.
2.6 Food Bazaar
Food Bazaar invites customers for a shopping experience in a unique ambience. At Food
Bazaar customers tend to find an unseen blend of a typical Indian bazaar and International
supermarket atmosphere.F
Flagged off in April02, Food Bazaar is a chain of large supermarkets with a difference where
the best of Western and Indian values have been put together to ensure satisfaction and
comfort while shopping.
The western values of convenience, cleanliness and hygiene are offered through pre-packed
commodities and the Indian values of see-touch-feel are offered through the bazaar-like
atmosphere created by displaying staples out in the open.
2.7 Hypercity

HyperCITY provides an international shopping experience, where customers can shop in

comfort in a large, modern, & exciting environment.
Everyday
Everyday is dedicated to bring wholesome food to your family at great prices. Our products
are packed under hygienic conditions and are priced to offer real value, every day.
HyperCITY encompasses everyday foods like cereals, spices, flour, pulses, dry fruits and
other products
Fresh Basket
Every Fresh Basket product guarantees freshness and quality on a daily basis, with all the
goodness locked in. Fresh Basket offers the freshest selection of meat, seafood, fresh
produce, freshly baked breads, specialty bread, etc.
9 | Page

Waitrose
Voted the top supermarket chain in UK. Exclusively available at HyperCITY. Come and taste
the best of teas, coffees, juices, jams and more.
2.8 Reliance Mart

Reliance Retail Ltd. is a subsidiary company of Reliance Industries. Founded in 2006 and
based in Mumbai, it is the largest retailer in India in terms of revenue. Its retail outlets offer
foods, groceries, apparel and footwear, lifestyle and home improvement products, electronic
goods, and farm implements and inputs. The companys outlets also provide vegetables, fruits
and flowers. It focuses on consumer goods, consumer durables, travel services, energy,
entertainment and leisure, and health and well-being products, as well as on educational
products and services. It has a total of 1,466 stores in India with an area of approx. 9 million
square feet.
2.9 Pune Central

Central was launched in May 2004 at Bangalore and was developed on the concept of giving
customers an unobstructed, pure shopping experience by ensuring the best brands in the
Indian market are available to the discerning Indian customer.
Central offers everything to the urban aspirational shopper. Located in the heart of the city,
Central believes its customers should not travel long distances to reach us. Instead, we must
be present in popular customer destinations.
Central houses over 300 brands across categories such as apparel, footwear and accessories
for women, men, children and infants apart from a whole range of Music, Books, Coffee
Shops, Food Courts, Super Markets (Food Bazaar), Fine Dining Restaurants, Pubs and
Discotheques. The mall also has a separate section for services such as Travel, Finance,
Investment, Insurance, Concert/Cinema Ticket Booking, Bill Payments and other services. In
10 | P a g e

addition, Central houses Central Square, a dedicated space for product launches, impromptu
events, daring displays, exciting shows, and art exhibitions.

Chapter 3
Research Methodology
3.1 TOPIC
The research topic given to us for this study is A Comparitive Survey of Private Label vs.
National Brand in Food Retail - Its effect on footfall, sale and customer satisfaction. Given
the rising disposable incomes, aspirations and increasingly consumerist mentality prevalent in
urban and semi-urban India; this relevant topic gave us the unique opportunity to gain
insights into consumer attitudes and behaviour towards the Private and National Brands of
food products through retail stores.

3.2 RESEARCH OBJECTIVES

PRIMARY RESEARCH OBJECTIVE:
The objective of conducting primary research was to analyze the distinguishing factor
between private label brands and national brands and analyze their contribution to the sales,
footfall and customer satisfaction.
SECONDARY RESEARCH OBJECTIVE:
To conduct a company data survey to:
1. To find out customer preference for private label brands or national brands
2. To find out whether sales of private label brands is dependent on income of individuals.

11 | P a g e

3. To find out the different factors that a customer keeps in mind while purchasing a food
product
4. To conduct a customer data survey to:
a .To analyze how the customers perceive the pricing of private label brand with respect to a
national brand.
b. To analyze how the customers perceive the quality of a private label brand with respect to a
national brand
c. To analyze how the customers perceive the packaging of a private label brand with respect
to a national brand
d. To understand the important role which a brand plays while selecting a food product
HYPOTHESIS:
H1:

People prefer National Brands over Private Label Brands

H2:

Sales of Private label brands are influenced by the income of the customers.

3.3 SIZE OF SAMPLE

Sample selected was by stratified random sampling and the sample size was of 122
respondents which included working professionals, businessmen, corporate and self
employed people. 12 samples from executives working in various food retailers were also
taken and their valuable insights and inputs were also considered. The respondents belonged
to the city of Pune and were the ones who visited retail stores for purchasing food products.
In order to enhance the data integrity and efficacy of the study, we selected nine different
food retailers that possessed both National brand and Private Label Brands. These included
the following:
(a) Hypercity
(b) Reliance Mart
(c) Reliance Fresh
(d) Food Bazaar
(e) Natures basket
(f) Star Bazaar
(g) Auchan
12 | P a g e

(h) D mart
(i) Pune Central
Data was collected from multiple outlets of each company in question across the city of Pune.
To capture consumer data, a sample size of 122 respondents was used; drawn from various
outlets.

3.4 RESEARCH METHODOLOGY

The verification of the objectives was primarily done by means of questionnaires and the data
obtained is reliable for deriving conclusions. Thus it is seems appropriate to describe the
sample, method and procedures employed.
3.5 RESEARCH TOOL
The research was carried out by means of questionnaire method. Keeping in nature of the
study we made 2 questionnaires
1. Questionnaire for customers of food retail stores
2. Questionnaire for working professionals at food retail stores.
Data Collection
a. Primary Data: Primary data was collected by the researchers themselves by means of a
questionnaire.
b. Secondary Data: Secondary data was collected from journals, the internet etc.
3.6 DATA BIFURCATION
The demographics of the respondents have been collected below:
Table 1: Demographic profile of respondents

S. No

General Information

No. of
Respondents
(Out of 110)

Percentage
(%)

Age (in years)

13 | P a g e

2
3

a. 20-30
b. 31-40
c. 41-50
d. Above 51
Gender
a. Male
b. Female
Occupation
a. Self employed
b. Businessmen
c. Government official
d. Corporate
e. Others
Income
a. Less than 25000
b. 25001-50000
c. 50001- 75000
d. 75000 and above

29
41
32
8

26.4
37.3
29.1
7.3

105
5

95.5
`4.5

7
11
87
5

6.4
10.0
0.0
79.1
4.5

17
39
42
12

15.5
35.5
38.2
10.9

Age of the Respondents (in years)

7%
26%
29%

20-30
31-40
41-50
51 and above

37%

Figure 1: Age of the Respondents (in years)

Discussion: It is clear from Table 1 that 26.4% of the respondents belonged to the age group
of 20-30 years. 37.3% of the respondents belonged to the age group of 31-40 years and thus
were the majority. 29.1% of the respondents belonged to the age group 41-50 years and only
7.3% were above 51 years of age.
Insights: This sho

14 | P a g e

Gender of the Respondents

4.5
Male
Female
95.5

Figure 2: Gender of Respondents

Discussion: It is evident from the Table 1 that 95.5% of the respondents were males whereas
only 4.5% of the respondents were females.
Insights:

Occupation of the Respondents

79.1

10.0

Ot
h

e
ra
t

Go
v

Co
rp
o

tO
ffi
cia

ma
n

0.0

er

4.5

ss
in
e
Bu
s

Se
lf

Em
pl
oy

ed

6.4

er
nm
en

90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0

Figure 3: Occupation of the Respondents

Discussion: Table 1indicates that majority of the respondents, that is, 79.1% were working as
corporate. 10 % of the respondents were businessman and 6.4 % of them were self employed.
4.5% of the respondents were working in other fields.
15 | P a g e

Insights:

Income per month of the Respondents

45.0
40.0

35.5

35.0

38.2

30.0
25.0
20.0
15.0

15.5
10.9

10.0
5.0
0.0
Less than Rs 25000 Rs 25001-50000

Rs 50001- 75000 Rs 75000 and above

Figure 4: Income of the Respondents

Discussion: Majority of the respondents i.e. 38.2 % had a monthly income in the bracket of
Rs 50000 Rs 75000. 35.5 % of the respondents had a monthly income in the bracket of Rs
25000 Rs 50000. 15.5 % of the respondents earned a monthly income which was less than
Rs 25000 and about 10.9% of the respondents earned a monthly income which was greater
than Rs 75000.
Insights:

16 | P a g e

Chapter 4
Data Analysis and Interpretation
4.1 Customer Analysis
Question 1: What is the most common way you purchase food products?
Objective: To understand the preferred mode of shopping by customers for food retail. This
question helps us to find out the popularity of a particular mode of purchasing food products
since there has always been a debate whether retail stores will kill the business of Kirana
stores or vice versa. Furthermore, with our scope of study, it will help us determine how
many shoppers actually prefer a retail store as a first preference.
Table 2: Most common way of purchasing food products

S. No.

Responses

1.
2.
3.

Kirana
Organized Retail
Wholesalers

No. of Respondents
(Out of 110)
57
49
4

Percentage
(%)
52
44
4

Most common way of purchasing food products

4%
45%

52%

Kirana
Organized Retail
Wholesalers

Figure 5: Most common way of purchasing food products

Discussion: It is evident from Table 2 that majority of the customers still prefer to go to a
Kirana to purchase food products. 44% of the respondents prefer going to an organized retail
store to purchase food products. While, only 4 % of the respondents had chosen wholesalers
as their preferred mode of purchase of food products.
17 | P a g e

Insight: This question helps us understand that Kirana stores are still a major mode of
shopping for Indians due to several beneficial factors like ease of shopping, personal
experience and location. Both retail and Kiranas are an important mode of shopping for
people and it proves that the popularity of both mediums continue to exist.
Question 2: Identify the Private Label Brand
Objective: To analyze if a customer is acquainted with a private label brand. This question
helps us in also gaining an insight to their knowledge about brands
Table 3: Identification of a Private Label Brand

S. No.

Responses

1.
2.
3.
4.

Reliance Pure
Annapurna
Aashirvaad
Tata

No. of Responses Percentage

(Out of 110)
(%)
38
34
31
28
28
25
13
12

Identify the Private Label Brand

12%
35%
25%

Reliance Pure
Annapurna
Aashirvad
Tata

28%

Figure 6: Identification of a Private Label Brand

Discussion: Table 3 shows that 34% of customers identified Reliance Pure as a private label
brand. 28% of the respondents felt that Annapurna was a private label brand. 25% of the
respondents felt that Aashirvaad was a private label brand. However, most of the Respondents
knew of the brand Tata as a National brand and thus only 12% of the respondents considered
Tata to be private brand.

18 | P a g e

Insight: 34% of customers identified Reliance Pure as a private label brand. This indicates
that customers understanding of private label brands is not well defined. Thus, it shows that
customers are not well aware of private label brands. Furthermore, Tata as a brand is well
established and hence is known as a national brand. This further tells us that the private label
brands have low visibility in comparison to national brands.

Question 3: How many of the following Private label brands are you acquainted with?
Objective: To find out if customers are acquainted with Private Label Brands. This question
also helps us understand the visibility of a Private label brand in comparison to a National
brand
Table 4: Customers Acquaintance with Private Label Brands

S. No.

Responses

1.
2.
3.
4.

Tasty Treat
Reliance Value
Star Bazaar
Ektaa

No. of Responses Percentage

(%)
55
30.1
62
33.9
34
18.6
32
17.5

Acquaintance with Private Label Brands

33.9
18.6

Ta
st
y

17.5

Ek
ta
a

30.1

Tre
at
Re
lia
nc
e
Va
lu
e
St
ar
Ba
za
ar

Percentage of respondents

40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0

Private Brands

Figure 7: Customers Acquaintance with Private Label Brands

Discussion: Table 4 shows that 33.9% of the respondents are acquainted with Reliance Value
brand. The next highest visibility is seen by Tasty Treat which is known by 30.1 % of the
respondents. 18.6% of the respondents knew of the brand Star Bazaar and only 17.5% knew
about Ektaa brand.
19 | P a g e

Insight: The inference gathered here is that customers are not well aware of private label
brands that exist in the market. Also, the visibility that these brands enjoy is very less
compared to national brands. Thus, customers dont have a good understanding of these
brands.

Question 4: How many of the following National brands are you acquainted with?
Objective: To understand the influence that National Brands has on customers. Thus, the
popularity of National Brands can be assessed with respect to the acquaintance that customers
have with national brands.
Table 5: Customers Acquaintance with National Brands

S. No.

Responses

1.
2.
3.
4.

Annapurna
Aashirvaad
Pillsburry
Shakti Bhog

No. of
Respondents
(Out of 110)
56
85
73
78

Percentage
(%)
50.9
77.3
66.4
70.9

Customer's acquaintance with National Brands

77.3
66.4

70.9

Sh
ak
ti
Bh
og

Pi
lls
bu
rry

Aa
sh
irv
aa
d

50.9

An
na
pu
rn
a

90.0
80.0
70.0
60.0
50.0
40.0
Percentage of respondents 30.0
20.0
10.0
0.0

National Brands

20 | P a g e

Figure 8: Customers Acquaintance with National Brand

Discussion: Table 5 shows that 50.9% of the respondents are acquainted with the brand
Annapurna. 77.3% of the respondents are aware of the brand Aashirvaad. 66.4% of the
respondents are aware of the brand Pillsbury while only 70.9% of the respondents are aware
of the brand Shakti bhog.
Insight: It can be inferred from the above that customers are well aware of National brands
since they enjoy a high visibility due to promotional campaigns, etc. Thus, customers have a
good understanding of the brands present.
Question 5: Indicate the importance of the parameters that motivates you to buy a
product (1- Least Important and 5 Extremely Important).
Objective: To identify the importance of various factors that motivates a person to buy a
product.
Table 6: Key motivators for purchasing a product

S.
No.

Factors

1.
2.
3.
4.
5.

Price
Packaging
Quality
Brand
Ease of
Availability

Very
Important
(5)
70
48
57
42
25

Important
(4)
35
30
40
44
35

Not so
important
(3)
3
28
8
17
46

Neutral
(2)

Not
important
(1)
2
2
0
0
3

0
2
5
7
1

Total

110
110
110
110
110

Factors of the most importance while purchasing a product

38.2

ilit
y

22.7

in
g

43.6

ila
b
Ea
s

eo

fA

va

Pa
c

Pr
ice

Percentage of people

51.8

ka
g

63.6
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0

Various Factors

Figure 9: Importance of Price

Discussion: Table 6 shows that 63.6% of the respondents have given price the 1st ranking.
51.8 % of the respondents have chosen Quality to be the most important factor. Packaging
21 | P a g e

has been chosen as the most important factor by 43.6% of the respondents. Brand and Ease of
availability were chosen by 38.2% and 22.7% of the respondents as the most important factor
respectively.
Insight: It is evident that Price, Quality and Packaging are the top 3 decisive factors while
purchasing a product.
Question 6: Do you think there is any difference in the pricing of a National Brand and
Private Label Brand?
Objective: To find out if customers perceive Private label Brands and National Brands to
have different pricing
Table 7: Comparison of Pricing of Private Label Brand and National Brand

S. No.

Responses

1.
2.

Yes
No

No. of
Respondents
(Out of 110)
88
22

Percentage
(%)
80
22

Comparison of Private Label Brand and National Brand

120

100

22
20

80
No
Yes

60

40

88

80

20

0
Number of Respondents

Percentage

Figure 10: Comparison of Pricing of Private Label Brand and National Brand

22 | P a g e

Discussion: From the chart it is evident that 80% of the respondents are aware of the pricing
differences between National Brands and Private Label Brands.
Insight: The awareness respondents have with regards to the pricing advantage that is present
for consumers to take when purchasing Private Label Brands. Whether or not the consumers
take this opportunity to save on their spending will be discovered further down the report.

Question 7: Do you consider Private label brands to be of poorer quality in comparison

to National Brands?
Objective: To find out the general perception of customers with respect to quality towards
the Private labels as compared to National brands.
Table 8: Comparison of Quality of Private Label Brand and National Brand

S. No.

Responses

1.
2.

Yes
No

No. of Respondents
(Out of 110)
67
43

Percentage
(%)
61.8
38.2

Comparison of Quality of Private Label Brand and National Brand

38.2
Yes
61.8

No

23 | P a g e

Figure 11: Comparison of Quality of Private Label Brand and National Brand

Discussion: Most people, 61.8 percent of customers consider Private labels to be of poorer
quality and 38.2 consider Private labels as compared to National brands.
Insight: Most of the respondents feel that Private labels are in the stores because they want to
give competition to the National brands and want to win the consumer share based on the low
pricing.

Question 8: Are National Label Brands better packaged than Private Label Brands?
Objective: This question is essential to understand the customers perception about the
packaging of private label brands versus national label brands, which in turns portraits the
perception that consumer have towards the look and feel of various brands in the market. This
question further helps us understand consumers purchase pattern and their preferences
towards various brands in the market.
Table 9: Are National Label Brands better packaged than Private Label Brands?

S. No.

Responses

No. of Respondents (Out of 110)

Percentage (%)

1.

Yes

76

69

2.

No

34

31

Are Na tio na l La be l B ra nds be tte r pa c k ag e d tha n P riva te Labe l B ra nds ?

31%
Yes

No

69%

24 | P a g e

Figure 8: Are National Label Brands better packaged than Private Label Brands?

Discussion: Most of the respondents, 69%, think that National brands are better packaged as
compared to Private brands.
Insights: Respondents think that as Private brands score more on the factor of low prices and
National brands opt for attractive packaging to sell in bulk. Also consumer prefer National
Label Brands as their packaging are better, thereby being perceived as higher in quality than
private labels being offered by retailers.
Question 9: Would it motivate you to buy a product if it had a promotional offer associated
with it?
Objective: This question is essential to understand the customers perception and attraction
towards buying a product if it had a promotional offer associated with it. Through this
question, consumer preference was judged and understood in turns of how much promotions
effect the purchasing of products and loyalty towards a particular store and its offers.
Table 10: Would it motivate you to buy a product if it had a promotional offer associated with it?

S. No.

Responses

No. of Respondents (Out of 110)

Percentage (%)

1.

Yes

91

83

2.

No

19

17

Would it mo tiva te yo u to buy a produc t if it ha d a pro mo tiona l o ffe r a s s o c ia te d with it

17%

Yes

No

83%

25 | P a g e

Figure 9: Would it motivate you to buy a product if it had a promotional offer associated with it?

Discussion: Most of the respondents, 83%, think that they would be motivated to buy a
product if it had a promotional offer associated with it.
Insights: Respondents would prefer to purchase a product if a promotional offer is attached
to it, thereby suggesting that a bundled product or a discount associated with the product or
even a special offer product would attract consumers more than a non-promotional product in
a retail store. Hence, companies need to keep this strategy in mind while trying to increase
sales.
Question 10: Does the brand matter to you when purchasing food products?
Objective: To understand the importance that a brand when purchasing a food product.
Table 11: Importance of brand for purchasing food products

S. No.

Responses

1.
2.

Yes
No

No. of
Respondents
(Out of 110)
62
48

Percentage
(%)
56.36
46.63

26 | P a g e

Does the brand matter when purchasing food products?

Yes

46.6
56.4

No

Figure 14: Importance of brand for purchasing food products

Discussion: Table 11 shows that 56.4 % of the respondents feel that brand matters when
purchasing food products and 46.6% of the respondents feel otherwise.
Insight: It can be seen that customers these days are well aware about brands. Hence, private
labels should be given more visibility so that customers start viewing it as a brand.

Question 11: Did you purchase a Private Label brand on recommendation of others?
Objective: To see whether consumers are affected by others while purchasing PLBs or is it
because of the genuine goodwill of the brand that people purchase it. People tend to have a
certain trust factor which they can put on a certain person and hence any recommendation
tend to boost up sales for a firm.
Table 11: Purchase of Private Label Brand by recommendation

S. No.

Responses

No. of
Respondents

Percentage
(%)
27 | P a g e

1.
2.

Yes
No

(Out of 110)
38
72

35
65

Did you purchase a Private Label brand on recommendation of others?

70

65

60
50
40

35

30
20
10
0
Yes

No

Figure 11: Consumers purchasing a Private Label brand on recommendation of

others.

Discussion: Out of 110 respondents only 35% of the respondents buy PLBs on
recommendation of others, the rest of 65% respondents are not affected by recommendation.
Insights: It is evident from the above data that majority of consumers do not buy private
label brands even on recommendation by others. It shows that customers are not affected by
what others say.
Question 12: Are you a repeat customer of a Private Label Brand?
Objective: To understand the level of customer satisfaction that people have from Private
Label Brands
Table 14: Repeat Purchase of Private Label Brand

S. No.

Responses

No. of
Respondents
(Out of 110)

Percentage
(%)

28 | P a g e

1.
2.

Yes
No

42
68

38.2
61.8

Are you a repeat customer of a Private Label Brand?

38.2

Yes
No

61.8

Figure 17: Repeat Purchase of Private Label Brand

Discussion: It can be seen from Table 14 that majority of the customers i.e. 61.8% are not
repeat buyers of a Private Brand. While 38.2% of the customers are repeat buyers of the same
Insight: It can be gathered that customers are not repeat purchasers of a Private Brand. This
has come into light since purchase of Private Label Brand is influenced by income to a
certain extent and hence only a particular section of the people tend to have a preference for
private label brands.
Question 13: How frequently do you visit a modern retail chain?
Objective: To assess the footfall of a modern food retail chains. This helps us understand the
frequency with which customers tend to visit a particular retail chain.
Table 14: Frequency of visit to a modern retail store

S. No.

Parameters

1.

Twice a week

Responses (Out of
110)
4

Percentage (%)
4
29 | P a g e

2.
3.
4.
5.

Once a week
Twice a month
Once a month
Other

6
43
37
20

5
43
34
18

How frequently do you visit a retail chain?

18%

4% 5%

Twice a week
Once a week
39%

34%

Twice a month
Once a month
Other

Figure 14: Frequency of visit to a modern retail store

Discussion: A vast majority (39%) of the respondents prefer to visit food retail chains twice a
month. The other majority (34%) of respondents visit such stores only once a month. Most of
these users are either young single professionals or relatively younger couples who prefer to
buy lesser commodities in one trip, owing to lesser storing spaces at their disposal. Other
households prefer to buy their food stock in bulk and have been added in the other (20%)
category. Respondents who lie in the twice a week and once a week category are the ones
who purchase fast food goods online.
Insight: The analysis gives us a picture that consumers have started
building trust over retail chains as compared to the traditional stores, due
to the attractive offers and deals available and even due to the choice of
both on the shelf i.e. national as well as private label brand

Question 14: Name the top 3 retail stores which you visit most frequently.

30 | P a g e

Objective: To find out the popularity and familiarity of retail stores amongst respondents and
thus find out the brand visibility.
Table 16: Most frequently visited top 3 stores

S. No.

Responses

1.
2.
3.
4.
5.
6.
7.
8.
9.

Hypercity

Responses given( Percentage

Out of 330)
(%)
52
15.8
45
13.6
77
23.3
87
26.4
23
7.0
45
13.6
41
12.4
67
20.3
47
14.2

Reliance Mart
Reliance Fresh
Food Bazaar
Natures basket
Star Bazaar
Auchan
D Mart
Pune Central

Most frequently visited stores

20.3

15.8 14.2 13.6 13.6

12.4

ba
sk
et
at
ur
e
s

St
ar
Ba
za
ar

Ce
nt
ra
l

M
ar
t

Pu
ne

Fo
od

23.3

26.4

Ba
za
ar

Percentage of Responses

30
25
20
15
10
5
0

Food Retail Stores

Figure 19: Most frequently visited top 3 stores

Discussion: Table 16 shows that out of all responses given 26.4% rated Food Bazaar amongst
top 3 retail brands. 23.3% of the total responses were given to Reliance Fresh and Pune
Central was given 20.3% votes.
Insight: The insight gained from this question was that customers rate Food Bazaar, Reliance
Fresh and Pune Central as the top 3 retail brands. This is a recognition of their brand value in
the market.

31 | P a g e

Question 15: How do you select your store brand?

Objective: To find out the importance of a parameter that leads to selection of a store brand
Table 17: Parameters for selecting a store brand

S. No.

Responses

1.
2.
3.
4.

Price
Quality
Store Location
Brand

No. of
Respondents
(Out of 110)
46
20
27
17

Percentage
(%)
41.8
18.2
24.5
15.5

Parameters for selecting a store brand

50
40
30
20
Responses 10
0
io
n
re
Lo
ca
t
St
o

Pr
ice

No. of respondents
% of Respondents

Parameters

Figure 20: Parameters for selecting a store brand

Discussion: Table 17 shows that 41.8 % of the respondents feel that Price is the most
important factor in the selection of a food retail store to buy products. Furthermore, 24.5 % of
the respondents feel that Store Location is the most important factor in the selection of a store
brand. 18.2 % and 15.5% of the respondents chose Quality and Brand to be the most
important parameter respectively.

Insight: This helps us understand the basic reason as to why customers go to a particular
store brand. The reasons mentioned here can actually help stores go for better facilities and
thus price their products in accordance to the target group.

32 | P a g e

Question 16: Would you recommend your store brand to others?

Objective: Recommendation is seen as a sign of customer satisfaction. Hence,
recommending a brand to other people indicates whether a customer is satisfied or not
Table 18: Brand recommendation to others
S.No.

Response

1.
2.

Yes
No

No. of

Percentage

Respondents

(%)

(Out of 110)
62
48

56.36
43.63

Figure 21: Brand recommendation to others

Discussion: This analysis shows that majority of respondents showed interest regarding
recommending their store brands to friends and neighbours while 43.66% of the customers
were not satisfied with quality aspect and denied to recommend the same. Thus majority of
the store brand customers are satisfied with the product.
Insight: This inference is helpful in understanding the level of customer satisfaction which a
customer enjoys. Since only after being satisfied with a particular product, he will
recommend it to others. Furthermore, this is alos a measure of the loyalty of a particular
customer with respect to the store brand.

33 | P a g e

4.2 ANALYSIS OF RETAILERS

ANALYSIS OF RETAILERS
Q1. What is the ratio of the space occupied by Private Label Brand and National Brand
in your store?
Objective: To ascertain the shelf space captured by National and Private Label Brands
respectively so as to understand the availability of the brands better.
Table 21: Store Occupancy of National Brands vs. Private Label Brands

Retailer
HyperCity
Reliance Mart
Reliance Fresh
Food Bazaar
Nature's Basket
Star Bazaar
Auchan
Dmart
Pune Central
TOTAL
5

20

15

10

10

10

95

90

90

95

80

95

85

90

90

90

Fr
es
h

Re
lia
nc
e

at
ur
e'
s

% of Private Label Brands

5
10
15
10
20
10
5
10
5
10

Average of % of Private
Label Brands
Average of % of National
Brands

Fo
od

St
ar
Ba
za
ar

10

Ba
sk
et

10

Ba
za
ar

Au
ch
an

100%
80%
60%
40%
20%
0%

% of National Brands
95
90
85
90
80
90
95
90
95
90

Figure 21 : Store occupancy of National Brands vs. Private Label Brands

Discussion National brands occupy 90% of the shelf space in food retail outlets as
compared to the private labels sold by them. Retailers currently focus on the well known
national brands for their revenues due to higher demand for the same from most of the
customers.
Insights: Popularity and trust built by national brands through nation-wide promotions and
an established brand name continues to play a major role in the level of the demand for them.
34 | P a g e

They continue to do this by occupying majority of the shelf space in the stores through visual
merchandising.
Q2. What is the percentage (%) contribution of the following to your monthly sales Private Label Brands vs. National Level Brands?
Objective: The objective of this question was to assess the share of private label brands vs.
national brands in terms of revenues generated for the retailer. Further, it would also throw a
light on the market-share of National brands vs. Private label brands.
Table 20: Percentage of sales of National Brands vs. Private Label Brands

S. No.

Retailer

% of National Brands

1.
2.
3.
4.
5.
6.
7.
8.
9.

Reliance Mart
Reliance Fresh
Food Bazaar
Nature's Basket
Star Bazaar
Auchan
Dmart
Pune Central
TOTAL

85
80
90
85
95
95
90
95
89.44

10

10

10

15

95

90

90

90

85

95

20

15

5 10.56

80

85

95 89.44

Average of % of Private
Label Brands

St
ar
Ba
za
ar

Fr
es
h

Re
lia
nc
e

Ba
sk
et

at
ur
e'
s

Ba
za
ar

Average of % of National
Brands

Fo
od

Au
ch
an

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

% of Private Label
Brands
15
20
10
15
5
5
10
5
10.56

Figure 20: Percentage of sales of National Brands vs. Private Label Brands

Discussion: As with shelf presence, National Brands contribute to 95% of revenues generated
by retailers as opposed to their own private labels.
35 | P a g e

Insight: Respondents suggested that national brands dominate the food retail business in
India with close to 90% of the market share and private labels only generate 10% of the
revenues in the food retail segment.
Q3. What is the % contribution of the following to your monthly profits - Private Label
Brands or National Level Brands?
Objective: To understand the percentage contribution of Private Label Brands or National
Level Brands to their respective monthly profits.
Table 20: Percentage contribution of National Brands vs. Private Label Brands to
monthly profits

S. No.

Stores

1.
2.
3.
4.
5.
6.
7.
8.
9.

Food Bazaar
Central
Natures basket
Reliance Mart
Star Bazaar
Reliance Retail
Hypercity
Auchan
D mart
AVERAGE

% contribution by Private
Label Brands
39
28
17
48
45
34
32
30
44
35.4

% contribution by
National Brands
61
72
83
52
55
66
68
70
56
64.5

% Contribution to Monthly Profits

rc
ity

56

ar

yp
e

r
Ba
za
a

sk
et

70

m
ar
t

68

66

N
at

ur
e

ba

Ba
za
a
d
Fo
o

55

52

83

72

61

St

90
80
70
60
50
40
30
20
10
0

Pvt. Label Brands

National Level Brands

Figure 20: Percentage contribution of National Brands vs. Private Label Brands to
monthly profits

Discussion: We see that on an average, the percentage contribution to the monthly profits is
35% for Private Brands and 65% for National Brands.

36 | P a g e

Insight: We infer that the retailers using a higher percentage of Private Brands are more
successful and stand higher in terms of overall rankings. These retailers are namely Reliance
mart, Star Bazaar etc.
Q4. How do you promote a private label brand? (Multiple options allowed)
Objective: To find out the marketing strategies retailers use to promote their own brands

Retailers

Combo schemes
of different PL Price differentiation
products

Attractive
shelf location

Combo schemes
combining PLBs
with NBs

Reliance Retail
Food Bazaar
Central
Natures basket
Reliance Mart
Star Bazaar
Hypercity
Auchan
D mart

Discussion: Most brands promote their brands by incorporating Price differentiation and
combo schemes of Private brands.
Insight: Price differentiation being the common tactics for promotion by every brand, combo
schemes and attractive shelf spaces by Reliance Mart, Star Bazaar, Hypercity act as
differentiators for attractive customers and increasing sales and profit margins.

37 | P a g e

Q5. What kind of pricing strategy do you follow for PLBs? (Multiple options allowed)
Objective: To study Pricing strategy opted by the retail food stores to promote their own
brands.
Table 5: Pricing Strategy of PLBs
No. of responses (out
Parameters
Discount and allowance pricing
Segmented pricing
Psychological pricing
Promotional pricing
Geographical pricing

of 10)
8
6
4
7
7

Percentage
80
60
40
70
70

Pricing Strategy of PLBs

100
80
60
Percentage

80

70

60

40

70

40

20
0
Discount and allowance pricing

Psychological pricing

Geographical pricing

Pricing Strategies

Figure 5: Distribution of pricing strategy opted by the Retailers

Discussion: Most of the stores use Discounts and promotional strategies to attract customers
as they are beneficial to stores as well as customers. Some stores also use psychological
pricing.

38 | P a g e

Insights: Stores know that the customers are attracted by the prices that are discounted onetime. One-time-low-prices help stores to clear out the stock and bulk selling help recover the
cost invested.
Q6. Who do you think are the main contributors to the sales of Private Label Brands?
Objective: The purpose of this question is to find out whether first time buyers or the loyal
customers opt for the Private label brands.
Table 5: Contributors to sales of Private Label Brands
S. No.
1.
2.

Parameters
First time buyers
Loyal Customers

Responses
3
7

Loyal Customers
30%
70%

Main contributors to the sales

80
70
60
50
40
Percentage
30
20
10
0

70

30

First time buyers

Loyal Customers

Parameters

Figure 5: Contributors to sales of Private Label Brands

Discussion: It is observed that Loyal Customers are major contributors for the sales of
Private label brands. First time buyers are hesitant while trying Private labels, but they try it
out because they see a price benefit there.

39 | P a g e

Insight: First time customers are more open to try out and Loyal Customers contribute more
towards sales.

Q7. Which label do you have to discard more at the end of the month?
Objective: The objective was to use another parameter to assess the sale of PLBs and NBs
respectively.

Table 7: Comparison of NBs Vs PLBs in terms of EoM discard

S. No.

Responses

1.
2.

PLBs
NBs

No.

of Percentage

Respondents

(%)

(Out of 10)
4
6

40
60

Product Discarded at EoM

40%

PLBs
NBs

60%

Figure 7: Comparison of NBs Vs PLBs in terms of EoM discard

40 | P a g e

Discussion: 60% of the retailers surveyed responded that at EoM (End of Month) the
National Brand at their stores are discarded owing to lack of sales in the stipulated time.
However only 40% retailers said that it happened to their Private Label Brands. Retailers
believe that Private Label Brands show reasonable sales as the prices are kept competitive
and the quality competent.
Insight: Price continues to play a major role while purchasing household groceries in India.
Moreover buying such products becomes an easier choice for a consumer as one is presented
with lucrative combo schemes to buy these products, with discounted rates as the prime USP.
Q8. Do you keep a special staff to sell/promote your PLBs?
Objective: Since PLBs contribute to a major portion of the profits of organized retail stores,
the objective behind this question was to identify different kinds of selling strategies adopted
by store owners, especially to ascertain if they employ special sales force to sell their PLBs.
Table 8: Special sales force to promote PLBs

S. No.

1.
2.

Responses

Yes
No

No.

of Percentage

Respondents

(%)

(Out of 10)
0
10

0
100

41 | P a g e

Special Sales Force Employed

Yes
No

Figure 8: Special sales force to promote PLBs

Discussion: Since 100% of the surveyed retailers do not employ a special sales force, it goes
on to say that no direct attempt is made at the salespersons end to sell a PLB.
Insight: Price, Product, Packaging, Place and not necessarily People are used to sell
PLBs.

Question 09: How do you promote loyalty among customers purchasing PLBs?
Objective: To analyze if the retailers implement any special strategy to attract customers to
their store brands
Table 9: Promoting loyalty to customers

S. No.

1.

Responses

Pricing

No.

of Percentage

Respondents

(%)

(Out of 10)
6

60
42 | P a g e

2.
3.

Quality
Packaging

3
1

30
10

Total

10
30

Packaging
Pricing
Quality

60

Figure 9: Promoting loyalty to customers

Discussion: It is observed that 6 out of 10 retailers agree that pricing is the most important
factor for promoting loyalty among customers, 3 said that quality is most important whereas
1 said that they use packaging to attract customers.
Insight: This analysis shows that the major factor for attracting and promoting loyalty among
customers is pricing. The second factor is quality and the third is packaging. Packaging does
not play much importance where PLBs are concerned and customers see the price to buy the
PLBs.

Question 10: Does the availability/non-availability of Private label Brands affect your
footfall?
Objective: To see whether the availability/non-availability of Private label Brands affect the
footfall in a store or customers are not affected by the availability/non-availability of PLBs.

43 | P a g e

Table 10: Does the availability/non-availability of Private label Brands affect your
footfall?

S. No.

No.

Yes
No

of Percentage

Respondents

(%)

(Out of 10)
01
09

10
90

Does the availability or non availability of Private Label Brands affect your footfall?

10
Yes
No

90

Figure 10: Does the availability/non-availability of Private label Brands affect your
footfall?

Discussion:
Out of 10 respondents only 01 respondent feels that availability/non-availability of Private
label Brands does affect the footfall on the store whereas 09 respondents feel it does not
affect the footfall.
Insight:
It is evident from the above data that majority of the retailers feel that availability/nonavailability of Private label Brands does not affect the footfall of the store as customers visit
the store because they want to buy national brands.

44 | P a g e

Chapter 5
Observation and Findings
5.1 Customers Insights

It is seen that Kirana stores are still a major mode of shopping for Indians due to
several beneficial factors like ease of shopping, personal experience and location.
Both retail and Kiranas are an important mode of shopping for people and it proves

that the popularity of both mediums continue to exist.

The customers understanding of private label brands is not well defined.
Furthermore, Tata as a brand is well established and hence is known as a national
brand. This further tells us that the private label brands have low visibility in

comparison to national brands.

Customers are not well aware of private label brands that exist in the market. Also,
the visibility that these brands enjoy is very less compared to national brands. Thus,

customers dont have a good understanding of these brands.

It can be inferred from the above that customers sell aware of National brands since
they enjoy a high visibility due to promotional campaigns, etc. Thus, customers have

a good understanding of the brands present.

It is evident that Price, Quality and Packaging are the top 3 decisive factors while

purchasing a product.
The awareness respondents have with regards to the pricing advantage that is present
for consumers to take when purchasing Private Label Brands. Whether or not the
consumers take this opportunity to save on their spending will be discovered further

down the report.

Most of the respondents feel that Private labels are in the stores because they want to
give competition to the National brands and want to win the consumer share based on
the low pricing.
45 | P a g e

Respondents think that as Private brands score more on the factor of low prices and
National brands opt for attractive packaging to sell in bulk. Also consumer prefer
National Label Brands as their packaging are better, thereby being perceived as higher

in quality than private labels being offered by retailers.

Respondents would prefer to purchase a product if a promotional offer is attached to
it, thereby suggesting that a bundled product or a discount associated with the product
or even a special offer product would attract consumers more than a non-promotional
product in a retail store. Hence, companies need to keep this strategy in mind while

trying to increase sales.

It can be seen that customers these days are well aware about brands. Hence, private

labels should be given more visibility so that customers start viewing it as a brand.
It is evident from the above data that majority of consumers do not buy private label
brands even on recommendation by others. It shows that customers are not affected by

what others say.

It can be gathered that customers are not repeat purchasers of a Private Brand. This
has come into light since purchase of Private Label Brand is influenced by income to
a certain extent and hence only a particular section of the people tend to have a

preference for private label brands.

Of the respondents covered, most prefer goods which can be consumed faster.

Retailers can thus be advised to keep more direct consumables on their shelves.
The insight gained from this question was that customers rate Food Bazaar, Reliance
Fresh and Pune Central as the top 3 retail brands. This is a recognition of their brand

value in the market.

This helps us understand the basic reason as to why customers go to a particular store
brand. The reasons mentioned here can actually help stores go for better facilities and

thus price their products in accordance to the target group.

This inference is helpful in understanding the level of customer satisfaction which a
customer enjoys. Since only after being satisfied with a particular product, he will
recommend it to others. Furthermore, this is alos a measure of the loyalty of a
particular customer with respect to the store brand.

5.2 Retailers Insights

Popularity and trust built by national brands through nation-wide promotions and an
established brand name continues to play a major role in the level of the demand for
them.
46 | P a g e

Respondents suggested that national brands dominate the food retail business in India
with close to 90% of the market share and private labels only generate 10% of the

revenues in the food retail segment.

We infer that the retailers using a higher percentage of Private Brands are more
successful and stand higher in terms of overall rankings. These retailers are namely

Reliance mart, Star Bazaar etc.

Price differentiation being the common tactics for promotion by every brand, combo
schemes and attractive shelf spaces by Reliance Mart, Star Bazaar, Hypercity act as

differentiators for attractive customers and increasing sales and profit margins.
Stores know that the customers are attracted by the prices that are discounted onetime. One-time-low-prices help stores to clear out the stock and bulk selling help

recover the cost invested.

It is observed that Loyal Customers are major contributors for the sales of Private
label brands. First time buyers are hesitant while trying Private labels, but they try it

out because they see a price benefit there.

First time customers are more open to try out and Loyal Customers contribute more

towards sales.
Price continues to play a major role while purchasing household groceries in India.
Moreover buying such products becomes an easier choice for a consumer as one is
presented with lucrative combo schemes to buy these products, with discounted rates

as the prime USP.

Price, Product, Packaging, Place and not necessarily People are used to sell

PLBs.
Since PLBs contribute to a major portion of the profits of organized retail stores, the
objective behind this question was to identify different kinds of selling strategies
adopted by store owners, especially to ascertain if they employ special sales force to

sell their PLBs.

This analysis shows that the major factor for attracting and promoting loyalty among
customers is pricing. The second factor is quality and the third is packaging.
Packaging does not play much importance where PLBs are concerned and customers

see the price to buy the PLBs.

It is evident from the above data that majority of the retailers feel that
availability/non-availability of Private label Brands does not affect the footfall of the
store as customers visit the store because they want to buy national brands.

47 | P a g e

CONCLUSIONS AND RECOMMENDATIONS

In this study, we examined how Indian customers perceive PLBs in food and grocery

product categories in comparison to national label brands.

Customer loyalty has become a very fickle term in todays highly competitive and
volatile market. Customers may prefer one brand over another or might be loyal
towards none of the brands as long as they feel that their expectations are being

satisfied.
From the study it is concluded that customers prefer national brands over private label

brands due to better promotion, packaging, quality and better brand image.
This is in line with our hypothesis 1
It is also evident from the study that national brands satisfy the customers more than
PLBs. it is clear from the footfall in the store whether there is availability or not.
Even in terms of parameters of customer satisfaction we conclude that national brands

have an upper hand

This proves our hypothesis 2
Retailers also need to understand that range and quality of products offered does play
a role among value for money segment of customer as high quality is generally
perceived to be synonymous with durability by customers. Indian customers are
value-conscious and though increased awareness and exposure has made them keen
on keeping pace with changing trends in society and fashion but they are still more
interested in products which fit them better along with giving them unique recognition
with comfort and quality at affordable prices. Findings related to factors considered to
be important by customers product categories in purchasing PLBs can help retailers in
taking steps improve their private label products along these parameters.

Thus, as recommendation we would like to suggest that if private label manufacturers can
consistently provide value to customers on factors rated high by customers and even if it is
low on status symbol, there is a high possibility for them to establish these brands as
acceptable in the minds of customers and to improve customers perception regarding the
same. Though this perception may not be as high as a branded product enjoys but it could still
become high enough for retailers to increase the sales of these brands and thereby raise their
profit margin considerably.
48 | P a g e

49 | P a g e