Branded or Private Label Manufacturer Branded vs.

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 for a particular company, that company may want to go through the work of building brand recognition so that it can keep creative control of its marketing and advertising efforts (Vakratsas & Ambler, 1999).

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 also going to be used, because the garments may be better positioned with certain retailers than they would with others. By making sure that the retailers who want to sell the garments are a good fit with the garment style and marketability, the company will have a better chance of being successful.

To keep costs down and cut out too many "middlemen," the company will market the garments directly to the stores with which the company wants to do business. There will need to be a marketing department within the company to do this, but it will be less expensive in the long run - and it will also be easier to keep more control over what is being done to market and sell the company's garments to retail outlets.

Manufacturer ( Retailer ( Consumer is the current plan for 100% of the distribution, but as the company grows it is more likely that this will place too much demand on company resources. At that point, a Manufacturer ( Wholesaler ( Retailer ( Consumer distribution channel may be more necessary, at least for the percentage of garments that are shipped long distances such as across the country or overseas. Buying a factory can be incredibly expensive, so the fashions will be made by package manufacturing vendors.

If the company grows large enough to start purchasing factories in the future, and the capital is available for such an endeavor, operations may be switched over to become more "in house." Currently, that is financially not feasible or realistic, so contracting out the actual creation of the garments is the only.