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Branded or Private Label Manufacturer
Branded vs. Private Label Manufacturer
When creating a new company, one of the most important decisions one can make is whether to market products under a private label or become a branded manufacturer. If one sells as a private label retailer, his or her company would be making the product and selling directly to consumers under the company's own label (Vakratsas & Ambler, 1999). A branded manufacturer would sell through retailers that are already established, and would not need to focus on selling directly to consumers. Instead, only selling to the stores that would carry the product would be necessary, which would mean that the company would not need to consider the work it would take to sell its products specifically to consumers (Stuart, Shimp, & Engel, 1987; Vakratsas & Ambler, 1999). Among the main concerns when it comes to which way a retailer is going to market is brand recognition (Stuart, Shimp, & Engel, 1987).
If a new company sells its garments to a retailer, that retailer already has brand recognition in the community. By selling directly to consumers, a company has to build brand recognition - and that is not always the easiest thing to do when it comes to new products. Still, some companies want more control over what they offer to consumers and how those offerings are made. If that is the case...
When a company sells its product to a retail store, that creative control over marketing and advertising is lost, and the big retailer can basically market the garments or other products however it chooses. Despite the lack of creative control, this researcher has chosen to have her new company sell its garments to retailers, instead of going through all that it would take to market to consumers directly. The brand recognition of the larger retailers is highly beneficial.
That means that this company would be a branded manufacturer, and not a private label retailer. The brand would be called Xcentrick, and the label would look similar to this:
This kind of "busy" label was chosen because it shows how quirky the company is and that it offers more than just one thing. It is an "anything goes" style of clothing that is still mainstream enough to be picked up and sold by different kinds of retailers throughout the country and the world. That helps to make the label and the clothing both highly recognizable and very marketable.
Distribution channels are going to be somewhat limited at first, because the brand is so new. Selective distribution is…
References
Stuart, E.W., Shimp, T.A., & Engel, R.W. (1987). Classical conditioning of consumer attitudes: Four experiments in an advertising context. Journal of Consumer Research 14(3): 334-49.
Vakratsas, D. & Ambler, T. (1999). How advertising works: What do we really know? Journal of Marketing 63(1): 26-43.
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