What are private distributor brands? Describe their characteristics.

Question

What will be an ideal response?

Answer 1

Private distributor brands-also called private brands, store brands, or dealer brands-are initiated and owned by resellers-wholesalers or retailers. The major characteristic of private brands is that the manufacturers are not identified on the products. Retailers and wholesalers use private distributor brands to develop more efficient promotion, generate higher gross margins, and change store image. Private distributor brands give retailers or wholesalers freedom to purchase products of a specified quality at the lowest cost without disclosing the identities of the manufacturers. Familiar retailer brand names include Sears's Kenmore and JCPenney's Arizona. Many successful private brands are distributed nationally. Kenmore appliances are as well known as most manufacturer brands. Sometimes retailers with successful private distributor brands start manufacturing their own products to gain more control over product costs, quality, and design in the hope of increasing profits. Sales of private labels have grown considerably as the quality of store brands has increased.