Package goods brands face great threat from the private labels. With the consumers spending lesser and lesser, the growth of the private labels can reach a dizzying high. Marketers are now concerned about their strategies and pricing tactics to prevent from further losing out in their market share to private labels. Marketers are of the view that it made no sense to spend a lot a get back a lost customer base that had shifted to private labels.

Reputed brands like P&G are losing their share in laundry detergents to value brands and products like toilet paper to private labels. The pressure is building up to meet the sales volume in P&G rivals like Unilever and L’Oreal too. Surprisingly, consumers are drifting towards private label in the toiletries and cosmetic segment as well. The private label market grew at 21.9 % in terms of volume this year.

Retailers have been badly hit in this recession. They are talking about destocking, taking out the less profitable brands for more than a decade. Walmart has already started to aggressively winnow certain brands and category footprints.

Marketers in the US have been coming up with their own strategies to beat this downturn. For example, Kraft has developed a program with Meijer, so that it can sell Kraft lunch meats and cheeses with Meijer bread. Smart move! It’s a win-win situation for both the parties. Marketers and retailers surely need to think out of the box to keep their market share.

Via: Adage