Dissolve Cautions About Private Label Goods

Private label goods—house brands—have advantages over nationally advertised brands. Retail profit margins are usually higher, even while you're offering a better price to the customer. And when the products are produced to your private label specifications, you can maintain customer brand loyalty and advocacy even when needing to change to a new manufacturer or supplier.
     But realize that some cultural groups carefully avoid private labels in certain product categories. Research based at University of Memphis suggests that African-American consumers tend to steer away from private label brands in clothing, particularly boys' clothing, because the private label lacks the cachet of widely advertised brands. Other research finds that Asian-Americans expect much more information about product features and consumer ratings when considering house brands than when considering national brands.
     You can establish high-quality images by showing in advertising, signage, and shelf placement all the ways the private label alternative compares favorably to the nationally advertised prototype. Supermarket chain Harris Teeter did that with their Premier Selection lines.
     Here are some tips for dissolving cultural cautions about private labels:

• Aim for advertising in media likely to be seen by people who are both in your target market and are members of the cultural group who tend to have hesitations about private label brands in that product category.
• Make favorable comparisons between the private label and the name-branded items only if you've good evidence the comparisons are true.
• Even if your comparisons are justified, don't overreach. An Advertising Age survey found that saying a Nissan Altima is as good as a Mercedes-Benz was more likely to earn an "Oh, sure!" than an "Oh, wow!" So if your private label brand is the Nissan Altima in its product category, better stay with comparisons to the name-branded equivalents to the Altima.