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Private Brands: Definition & Examples

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  • 0:01 What Is a Private Brand?
  • 0:22 Examples
  • 0:50 Why Develop Private Brands?
  • 1:34 Successful Private Brands
  • 2:29 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Private brands are an important marketing tool and profit center for many retailers. In this lesson, you'll learn about private brands, some related concepts, and be provided some examples.

What Is a Private Brand?

A private brand is a product that is exclusively manufactured for a retailer. The retailer will market the product under its own brand name. Prices for private brands are usually set cheaper than competing name brands. Consumers often think that private brands are of lower quality, but that perception is changing.

Examples

Common examples of private brands include:

  • Grocery products - canned food, frozen food, rice, cereal, sodas, etc.
  • Generic medicine and health products - pain relievers, cough syrup, bandages, etc.
  • Textiles - towels, washcloths, bed sheets, etc.
  • Clothing
  • Household supplies - cleaning products, kitchen utensils, dishes, etc.

Why Develop Private Brands?

Private brands provide retailers some good benefits. These include:

  1. Control: A retailer will have a much greater degree of control over quality and marketing of private products because it develops them.
  2. Profit margin: Private product brands tend to have a higher profit margin compared to name brands.
  3. Image: Retailers can create a unique image for their retail establishment with their private brands.
  4. Customer loyalty: It's possible to improve customer loyalty because of the exclusivity of private brands. If retailers can get consumers hooked on their private brand, then they must go to that store to get it because it is the only place it's available.

Successful Private Brands

According to some experts, there are three main factors that will determine the success of a private product:

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