Opinion ID: 1194558
Heading Depth: 2
Heading Rank: 1

Heading: Presence and Effect of Private-label and Store-brand Products

Text: Private-label products are typically manufactured by one company for sale to the consuming public under another company's name. Such products are generally made with the same active ingredient as the name-brand or national-brand product with which the private-label product competes. Private-label products are available in a wide range of industries and are often positioned as lower cost alternatives (about 25% less expensive) to national-brand products. As of 2005, private-label sales represented 20% of all U.S. supermarket, drug chain, and mass merchandiser sales and totaled $50 billion. Store-brand products are a type of private-label product, in which the store or retail chain name is the brand name. Store-brand products have existed in retail chains since 1883, and consumers have become highly aware of them. Indeed, the Private Label Manufacturers Association reported that in 2005, more than 90% of consumers polled were familiar with store brands, and 83% bought them regularly. Store brands are typically found on store shelves next to the analogous national-brand products. The packaging of store-brand products often includes reference points to invite the consumer to compare them to the national-brand ones. These reference points often include similar product packaging and compare to statements on the packaging. Stores also employ tags on store shelves (so-called shelf extenders or shelf talkers) that explicitly invite consumers to compare the store-brand product with the national-brand analog. Consumers are generally aware of the name of the store in which they are shopping. They are aware that stores have private-label brands that in most cases are merchandised next to the national-brand products. Prices for the products are typically displayed prominently. Consumers can, therefore, see the cost difference between store brands and national brands.