eli5, how do “store brands” work?
In: 348
as someone who creates store brands, it’s actually easy:
as a manufacturer, you have two options:
a) invest heavily into marketing, create your own brand, subsidies it for a first few years through expensive promotions until demand kicks in and then be prepared for unstable demand, as any retailer will kick you off when feels like it (thinks his prices are not good enough).
2) sacrifice some of the profits and have stable demand, no marketing, no fees, just produce your product at agreed upon prices.
retailers also save on marketing, because they don’t do promotions on individual items, just on their store brand. It also raises brand visibility.
Latest Answers