Private Labels at the Service of Retailers' Image and Competitive Positioning

Abstract

Since their introduction decades ago by retail companies, private labels have passed through several stages of market penetration and customer acceptance. For retailers, private labels have become valuable instruments for image creation and competitive positioning. They also have been a key factor in facilitating internationalization and the decision to expand to other countries. This chapter traces the evolution of private labels, from their origin to the present, placing emphasis on the strategies that retail distributors use to obtain and maintain competitive positions. As an illustration, the authors examine the case of the Tesco grocery retail chain, following it from its establishment in the United Kingdom to its most recent expansion into South Korea. The case demonstrates the role of private labels in the company´s evolution and international expansion and thus reveals the strategies followed in developed versus developing markets. Deep knowledge of customers, enables companies to obtain a lead position in markets and build an image associated with innovation and added value.