Question

Many national brands are supplying products to be sold by retailers under the retailer’s own private label. For example, Purina, Borden, Heinz – have all admitted to supplying products (sometimes lower in quality) – to be sold under the retailers’ own label. The practice has been criticized by many, as it might create confusion for consumers and reinforce the perception that all brands in a category are “the same”.

What is your opinion on this matter? Should national brands manufacturers also supply private label brands? If so, should the quality be lower?

Answer 1

In my opinion, it is a good practice to supply products to be sold by retailers under their own private labels. It allows the national brands to sell more quantities and to those people who generally prefer to buy the retailer's own brands instead of national brands. It is because of the faith in their local retailers that their recommendation they can take without thinking twice. As far as quality is not compromised there should not by any harm in selling products to retailers for their own private labeling as it is beneficial for all. Therefore, yes, national brand manufacturers should supply private label brands.

No, quality should not be compromised in supplying products to retailers for their own private labeling. It is because customers buy a retailer's brand thinking of it as good quality. In case, a substandard product is sold, it will not only affect the retailer's customer relationship but the relationship national brands have with the retailers. Therefore, the quality has to be maintained.