For a long time we refused to manufacture products under private label. This was largely due to the positioning of the network and the peculiarities of the assortment: in Russia, much of what we offered to customers could not be produced, there were no companies capable of guaranteeing high and stable quality, and the modest volume of sales compared to the market made working under a private label economically unprofitable, because the price was too high.

Nevertheless, positive changes have begun: worthy manufacturers have appeared in Russia, we have concluded contracts for the production of private label products with a number of foreign companies, and the number of outlets of the network has grown significantly. Today, Azbuka Vkusa's assortment includes five trademarks: Prosto Azbuka, Our Farm, Selection, Already Done and Almost Done! The last two brands are produced in our own kitchen factory.

The main requirements for our private labels are product quality and supply stability. The quality is monitored by the manufacturers themselves and representatives of our quality department (they check before starting cooperation and then periodically go to production). After receiving the goods, we check them in our own quality laboratory, where physical, chemical and microbiological analyzes are carried out. Goods that have successfully passed laboratory testing receive the Q-lab marking, confirming the high quality of the products.

The price of private label products is not always lower. We strive to offer the best value for money. The price advantage, as a rule, is explained by the fact that the number of intermediaries between the retailer and the manufacturer is reduced. There is no need to include promotional costs in the price: products are promoted in retail outlets using POS materials and a more advantageous display on the shelf.

Our stores work with 90 regional manufacturers. Among them are both large companies that produce a whole line of products for us, and very small ones that make just one product for us.

Producers agree to work under our trademark, as this is a real chance for them to get sales in Moscow. The Moscow sales market is a dream, and getting into large chain stores is not so easy. We communicate with many manufacturers, some of them have worked or are working with chain stores and are not always satisfied with this cooperation. It's no secret that chain stores have a rather strict system of fines, bonuses, "entrance" tickets. We don't have all that. All that we require from the manufacturer is natural products without chemicals. All other problems (transportation, storage, sale, write-offs) are completely taken care of by us.

The price of products depends on the distribution network. Specialty stores like ours tend to have higher requirements. But if they are honestly executed, then the selling price is also higher. Specialized stores do not participate in the food wars of large retail chains, they do not force manufacturers to reduce the cost of production for the sake of a tangible price reduction. Large retail chains, relying on the mass consumer, as a rule, do not care about the capabilities of the manufacturer and product quality. The main thing is the price at which this or that product will be sold.

Hope Paderina

Purchasing Director of own brand "Auchan"

How to create your own brand "Auchan":

A technical task is created with requirements for the product: what technology and under what conditions it should be produced, what taste qualities it should have, what its packaging should be, and most importantly, at what price Auchan wants to offer it to its customers.

On the basis of the terms of reference, a tender is held, in which all interested manufacturers can take part. Any enterprise that offers the highest quality product at the best price, has the appropriate technology, personnel and documentation can win the tender.

At the tender stage, the Auchan quality department conducts a blind tasting. Questionnaires give marks for the quality and taste characteristics of the samples. The data is processed by a special program, and the best products are selected based on the results. During the tender and after it, the production conditions are monitored by independent auditors who monitor all technological processes of production - from the composition of raw materials to packaging.

Products are tested in an independent laboratory for compliance with state and international standards.

Creation of packaging design for the brand "Our family". The main criteria are recognition and memorization.

Signing an agreement with an applicant who meets all the requirements.

Leonid Abayushkin, General Director of the Federal Purchasing Union CJSC Sistema T3S, Moscow

• How to find the right supplier
• Is it worth selling a branded product similar to your own?
• How to design your product packaging
• How to choose a product for production under your own brand
• How to make private label products in demand

Production of goods own brand dictated by the realities of the market. It is no secret that with increased competition, the margin from branded goods is directed by transcontinental corporations and simply large manufacturers to aggressive advertising. Due to intrusive advertising, such products are in demand by the consumer. And the more they are in demand, the more the retailer becomes dependent on them, which is forced to sell them. The conditions in this case are dictated by the manufacturer. Therefore, large retailers are striving to create their own brand management and marginality. This, in fact, is the idea behind private labels. (Products of own brands - STM. - Editor's note).

How to improve the image of the store with the help of private label products

In Russia, private label production is only gaining momentum, while in the assortment of Western retail chains goods under their own brand sometimes prevail. Their share in the assortment varies depending on the type of store:

• in discounters - 80%;
• in ordinary supermarkets - 30–40%.

The norm is a situation when private labels occupy a third in the turnover and revenue of a foreign retailer, and in marginality - two thirds. A network without these goods can no longer exist: it will simply be economically untenable. And this is a general trend in the development of the market, and not a single example.

And although domestic retailers, creating private labels, proceed from the same criteria as foreign ones - low price, demanded product category - this cannot be called simple copying. Now the world market is developing progressively, and, accordingly, the need for changes is natural. It's just that, as a rule, changes appear earlier in Europe and America than in Russia.

So far, additional benefits do not play a big role for them - a criterion that is actively used by Western retailers. Namely, foreign stores pay special attention to healthy, environmentally friendly products. Few Russian companies use this approach to compete with branded goods. But in vain.

Private label products from alcohol to pet food

Since the Federal Purchasing Union Sistema T3S was created in order to help retailers get more economic benefits from their activities, we are obliged to create private labels - this is a priority direction of development.

Today we produce products in the lower and middle price segments.

They often look similar to the leading brands on the market. Of course, we are not talking about mixing brands, but there is a product that is the leader of the segment, and it is logical to build on it. We are not the first to do this.

Practically all key categories of food and non-food goods are produced under T3C Systems own trademarks: from alcohol to pet food. There are six major brands in total. It would be wrong to say that some of them are more significant, and some are less. Each trade mark is created for a certain group of goods.

All brands of umbrella (names of goods in which the name of the manufacturing company dominates, and in the advertising of the company's products its logo is shown. - Approx. Editorial). Accordingly, their name should fit well on the maximum range of goods, be universal. Although, of course, there is an emotional component. For example, in the name of the brand "Praise". Praise is a bright word that carries the approval of the product, taste, quality and, finally, the manufacturer.

The average share of private labels in the chains included in the T3S System:

• in network income - 6%;
• in network turnover - 4%;
• in assortment - 2.5%.

I would like to emphasize that this is the "average temperature in the hospital." In some networks, these figures are 3-4 times higher, but in some they are lower. In general, it all depends on the attitude of the retailer to his own brand. By giving these products the right shelf space through display and other merchandising tools, you can grab the customer's attention. Well, since the cost of private labels with the same quality is always lower than the branded counterpart, sales of these products will increase.

Since we already release products in most product categories. In order to choose which goods to produce, we analyze the assortment matrices of the networks included in the T3S System, study the analytics of consumer preferences, etc.

As we enter other price categories and more clearly structured by product range, brands may change. Based on Western experience, 25-30 private labels can be successfully managed. And the brand should be closed within the framework of price positioning or category.

Manufacture under own brand

We do not have our own production. We produce all private label products at enterprises that have proven themselves on the market on the positive side with proven and guaranteed quality and a well-functioning management system. Often at the same enterprises they make products under well-known brands.

We cooperate with manufacturers who:

• understand why it is profitable for them to produce private labels;
• are leaders in terms of costs in their field;
• have experience in the production of goods with a selected level of quality.

We hold tenders for the production of each item. Further, at the initial stage of work, we approve the recipe and obtain control samples. Organoleptic (a method for determining product quality indicators based on the analysis of the perceptions of human organs. - Editor's note) product is controlled using these samples. They are also tested in certified laboratories for safety and compliance with GOST, TU.

The design and production of packaging is also carried out by third-party companies. Today we are developing budget lines of STM. Accordingly, the packaging is simplified. You can not make a wrapper for a cheap product expensive. Today we are deliberately simplifying the packaging, making it primitive. As we enter more expensive price segments, the quality of our approach to packaging design and emotional, image presentation of goods will certainly change.

• Store traffic: how to measure outlet traffic yourself

Practitioner tells

Maxim Kozuro, Head of the Semeyny Kapital chain of stores, St. Petersburg

When opening the store, we wanted to attract customers with a unique offer. Entering the market only with branded products is now useless: you will not be different from your competitors. Therefore, we initially launched production, and on its basis opened a chain of stores under our own brand.

We ourselves began to produce almost the entire line of dairy and sour-milk products (milk, baked milk, kefir, fermented baked milk, yoghurts, sour cream, butter, cottage cheese), except for cheeses. A sausage shop was also opened, which makes doctor's sausage, chopped ham sausage, premium ham, sausages and sausages. We are focused on the production of daily demand products, not delicacies. This is also why they planned to organize the production of bread. Now we produce, in addition to bakery products, pasta.

The name "Family Capital" was chosen to emphasize family values ​​and promote a healthy lifestyle. We deliberately refused to sell and even more so the production of non-natural products, alcohol and cigarettes, in order to emphasize that our products are for those who care about their families.

We do almost everything ourselves, even the packaging. The concept of the logo and packaging was developed by our in-house designer, and we produce the packaging at our own facilities.

We only buy raw materials. For example, milk is supplied to us from one of the farms in the Leningrad region, and first it goes to the laboratory. We specially purchased the necessary equipment, and laboratory assistants accept all incoming raw materials.

We are looking for suppliers both on the Internet and by calling farms. Sometimes we just go to the farming districts of the region, look around, get acquainted with the owners of the farms we like. Unfortunately, there is no single database that is currently relevant, and an independent search is still more effective. When discussing cooperation with suppliers, we always inspect the farm: what animals are fed, how they are kept. If everything suits us and the farmer's documents are in order, we conclude an agreement with him. So far, we are working only with large farms, and we also plan to set up our own farm in the near future.

If we compare Family Capital with private labels of large chains, then the price difference is immediately noticeable. Their products are usually in the economy class segment, but we cannot position our goods in this way. Even compared to third-party manufacturers, in terms of a liter or kilogram, our price is higher. But this is a very reasonable price for the quality offered. Moreover, it should be borne in mind that buyers will not find an analogue of our products from competitors, since natural products are now sold only by companies specializing in this and are not sold in stores.

The experience of the first two stores of the network, which sold goods of other brands, shows that the demand for our products is far ahead of the demand for similar products from other brands. Therefore, now in all stores the assortment is represented only by our products.

Now we plan to produce 100% of everyday products under our own brand.

Packaging for private label products

Maria Adamova, Marketing Director of the holding "U2B group. Packing for business”, Zheleznodorozhny (Moscow region)

One of the most effective ways to get buyers to pay attention to the product is thoughtful packaging. An important point: packaging of private label goods cannot be expensive.

Who to entrust the creation of packaging for private labels

There are several options for organizing work on the creation of STM.

1. The network turns to a manufacturer that has all the necessary equipment for the production and packaging of private labels.
2. The network itself develops the production direction, that is, it creates the necessary capacities for the production of cakes, semi-finished meat products, etc. For this, equipment is purchased, including packaging, and all procedures are fully controlled. For example, for packaging in chain stores, the simplest thermal packaging equipment of the "hot table" type is used. The packaged product is placed on a pallet (tray) of the appropriate size, the tray with the product is wrapped with food stretch film (PVC) and sealed on a thermal table.
3. The network entrusts the development of packaging to a specialized company (outsourcing).
4. A large manufacturer has its own network of stores, through which it primarily sells goods under its own brand; accordingly, the packaging is developed by him independently.

Some European networks own not only large processing enterprises (for example, the meat industry), but also agricultural land. Thus, the entire production chain is under the control of the retail chain. The development of such a scenario is also possible in Russia: for example, in the fall of 2010, the Tander company (the Magnit chain of stores) invested about 8 billion rubles. in the construction of a greenhouse complex in the Dinskoy district of the Krasnodar Territory due to the fact that the network managers were not satisfied with the work of fruit and vegetable suppliers.

Stages of packaging development

When developing packaging for private labels, it is necessary to proceed from consumer properties of products, requirements for shelf life, and market demands.

Stage 1. Collection of ideas. The store's special service responsible for bringing private labels to the market (or the relevant subdivision of the manufacturing plant) analyzes competitors' products and offers options for possible packaging. Ideas on how to pack a particular product can also come from suppliers of packaging materials.

Stage 2. Design development. The network can develop the design of private labels and packaging on its own or use the services of a branding agency. It is best if the design of the packaging, as well as its form, is developed at the launch of the brand on the market by a branding agency that has relevant experience with the product in this product category.

Surveys show that buyers recognize private label chains by two features:

• the name of the brand and the distribution network are the same;
• the packaging of the goods is designed in the corporate style.

For STM, the name of the network is taken. As a rule, networks first create private labels in the low price segment according to the principle “the quality is the same as that of the products of recognized brands or slightly worse, but the price is significantly lower.” The name of the brand is formed by adding to the name of the network a word indicating the price advantage of the product: Carrefour Discount. with discount), Tesco Value Tesco price). Later, STM is launched in the middle and high price segments. In the first of them, when naming a brand, only the name of the network is most often used (without qualifying words). And the name of the brand for premium segment goods is formed by adding a word to the name of the network, indicating the exclusivity, sophistication of products: Carrefour Selection. choice of Carrefour store), Tesco Finest the best from Tesco).

If the names of the network and the private label are the same, the attitude of buyers towards the store, as a rule, is transferred to the trademark. This makes it possible to more clearly control fluctuations in demand: if customer loyalty decreases, private label sales fall. I consider the STM of the Perekrestok chain of stores to be a successful example (the names of the brand and the chain are the same). The package design is made in a laconic style: on a white background - the name of the brand, a lot of space is allocated to the image of the product itself. Everything is quite simple, but at the same time, Perekrestok products are hard to miss on the shelf.

It should be noted that most chains produce under private labels both food products (dairy products, juices, semi-finished meats, chocolate) and non-food products, so the packaging design must be universal - then the network's advertising immediately applies to all goods produced under private labels.

STM has a unique name. The store does not always give its own name to private labels. For example, the French network Auchan has several private labels at once, the names of which do not say anything about belonging to the network: “Bed of Luck”, “Sweet Island”, “Our Meal”, etc. The design of product packaging also often does not correspond to the corporate identity of the store. In this case, consumers do not recognize the brand of the network, and this leads to fluctuations in demand and difficulties in forecasting it. At the same time, the release of a brand under a name that is different from the network one has advantages, because in the event of problems with the quality of some products, buyers do not transfer dissatisfaction with other products sold under other brands. Often this approach is used to create brands for economy segment products. However, the original name is also assigned to premium segment brands, and then the connection with the network brand is maintained at the design level. For example, this is the logo of the Auchan network (bird) in the design of the trademark Mmm!

• Trademark: how to register, use and protect

Practitioner tells

Danny Perekalski, Marketing Director of Dixy Group, Moscow

A special division is engaged in the creation and launch of private labels in the Dixy network. The design project manager is responsible for the development of packaging, he acts as a link between designers, manufacturers and partner printing houses.

The development of design and selection of packaging for each product takes place in several stages and takes one to two months. The packaging of all goods is made at specialized enterprises and printing houses, then sent to manufacturers who package and pack the goods.

93% of all private labels in the network are domestic products (the remaining 7% are imported: olives, olives, olive oil, wine, canned vegetables). To date, its own trademark "D" has been assigned to 98 positions, among them - cereals, groceries, frozen berries and vegetables, canned vegetables, a line of snacks and dried fruits, fish preserves, olive and sunflower oil, drinking water, wet wipes. The packaging of products for different product categories under the “D” brand is designed in the same style, but we use additional color elements to highlight different products in one line. For example, carbonated and non-carbonated water "D" is indicated by different shades of blue.

Stage 3. Testing samples and ordering a trial batch

The manufacturer draws drawings and makes test packaging samples. When testing, the following characteristics are especially important: shelf life, appearance, safety during storage and transportation. The tested packaging option is approved by the expert commission of the manufacturer and the distribution network. The commission may include technologists, marketers, the head of the sales department. The decision is usually made by the CEO, or the commercial director, or the head of the marketing department. Then a small batch of packaging is ordered, and the products appear on the shelves of the network. If the product is in good demand and there are no problems in the entire distribution chain, they move on to large batches.

What types of packaging are used most often

The choice of the optimal packaging option, of course, will depend on the properties of the product. So, for the convenience of storing food in the refrigerator or heating in a microwave oven, packaging made of frost-resistant or heat-resistant materials is chosen. Such properties are possessed, in particular, by polyethylene terephthalate (PET). It is also often used to make packaging for carbonated drinks, butter and any dairy products. So-called doy-packs are produced from PET film laminated with polyethylene - bags with a lid and a bottom for packaging mayonnaises and ketchups. When packaging fish and meat products, PET films are mainly used for cutting.

Popular with domestic manufacturers and polypropylene. The film from it is suitable for packaging bread and bakery products, vegetables, fruits, flowers and other goods.

Dairy products on the Russian market are presented in cardboard boxes, plastic bags or bottles, while in Europe, paper and cardboard packaging is preferred because it is more environmentally friendly . Manufacturers try not to use glass: its fragility and weight create problems during transportation. In addition, the leakage of glass containers does not allow the product to be stored for a long time (see also: Examples of convenient packaging of goods under private label).

Examples of convenient packaging of goods under private label

Canned foods can be packaged in easy-to-open keyed tins. Bottles with vegetable oil should have special dividers so that it is convenient to pour the contents. Bags for cereals can be equipped with convenient valves for re-closing.

Other options for convenient packaging are shelf ready packaging (English - packaging ready for display; the product is packed in boxes and put on the shelf in this form) and multi-pack (English - containers for several items combined in one package; example - 12 bottles in a package with a handle for transport).

How to reduce private label packaging costs

The share of packaging costs in the cost of a product can range from 1 to 10% and even more: fluctuations depend on the packaging materials and equipment used. For almost every type of packaging, you can find the best solution in terms of quality, cost and attractiveness for the buyer.

An example of savings due to equipment and materials. When packaging bakery products, the cost of packaging in a bag with a clip can be 10%, and when packaging in polypropylene film - 1%. However, one should not forget about the cost of packaging equipment. So, for packaging in custom bags, you can get by with a small and inexpensive clipper, and for packaging in film, more expensive equipment is more likely to be required.

You can save money by optimizing the operation of the packaging equipment and choosing the most suitable material. Let's compare two types of shrink film - polyolefin and PVC. A 15 micron thick PVC film has a density of 1.35 grams per cubic meter. cm, and the density of a polyolefin of the same thickness is 0.92 g per cu. see Therefore, in a polyolefin roller weighing 20 kg there will be approximately 40% more film than in a PVC roller of the same mass. Moreover, the 15 micron polyolefin film can be used instead of the 20 micron PVC film, which provides an additional benefit.

If you use plastic packaging for confectionery, then in some cases you can choose options from thinner plastic (while its density should be sufficient for storage and transportation) and save up to 15% of packaging material.

An example of design savings. Reducing the number of colors in the original design often does not affect sales, but saves on the production of packaging materials. So, if you are going to pack bread in a polypropylene film with the symbols of your company and have purchased horizontal packaging equipment, then factors such as the number of colors in the package, the area and saturation of the filling, circulation will be important for the cost. By optimizing each of these factors, film costs can be reduced by 20%.

Practitioner tells

Kirill Murzepp, Director of Private Label Management, Lenta, St. Petersburg

Packaging for private label goods, as well as the product itself, is produced at the supplier's enterprise. We include in the annex to the supply agreement the requirements for the material, size, strength, safety of packaging and its labeling.

The cost of packaging and its share in the price of goods depend on the category of goods. For example, the cost of packaging bakery products in polymer bags with a company logo is minimal. Packaging design for cheap goods is simpler: it should be concise, since buyers are attracted primarily by the price, not the design. In our stores, this is the trademark "365 days". Packaging of goods of the middle and high segment requires the designer's painstaking work: when purchasing goods of these categories, the buyer first of all focuses on the attractiveness of the packaging, and then evaluates the composition of the product, its taste, etc. Moreover, high segment private label products compete on the shelf with goods -analogues of leading companies and, therefore, must have an attractive appearance. For example, in our stores, these are Dolce Albero brand confectionery: the design (stylish logo on a light brown background) was developed in such a way that consumers highlight this product as a premium one.

Expert advice

Alexander Tremasov, General Director of the network of printing houses "Tremasov", Ivanovo

When developing a design project for your own products, you need to determine exactly who you are targeting, what emotions you want to evoke in the buyer, and based on this, think through all the details. The correspondence between the presentation of the product and its price is very important: a simple or too contrasting design is more likely to be associated with economy class goods, while the presence of small elements and deep colors inspire more confidence in the quality of the product. If the product looks more expensive than it costs, the buyer will decide that this is a hoax, just as in the opposite situation.

Our company works with several private label manufacturers. In addition to custom printing, we also offer designer services. Quite often we encounter the fact that the customer comes with a requirement something like this: "Do this for us - we have such a common design." But we see that the layout he offers is already very outdated, buyers will not have any interest or trust in it.

People love new things. In order for the product to be always in demand, it is necessary to constantly change the packaging design. But it is important to do this correctly so as not to scare away buyers with their hypertrophied novelty. We have customers who constantly change the design of products, but only slightly, so that the buyer continues to recognize their product. Some people order two types of packaging for the same product at the same time.

Now we are preparing a packaging design for meat products. It took a lot of work to convince the customer to change the design, but as a result, the packaging looks much better and matches the price.

ZAO Sistema T3S
Year of foundation: 2007
Staff: 60 people
Type of activity: concludes supply and marketing contracts with federal suppliers, coordinates and consolidates centralized orders, purchases and deliveries of products for retail chains
Structure: within the framework of the Federal Purchasing Union, Sistema T3S CJSC operates 48 chains with a total number of stores of more than 1,800 and a consolidated trade turnover of about $1.9 billion. The total area is approximately 700,000 m2; daily customer flow - more than 2 million people

Family Capital LLC
Year of establishment: 2011
Number of stores: 8
Staff: 16 people
Area: from 20 to 50 m2
Turnover and profit: not disclosed

LLC Network of Printing Houses Tremasov
Year of foundation: 2002
Staff: 33 people
Services: custom printing of labels for products, production of plastic cards (including discount and payment cards), certificates, plastic price tags, etc.

Maria Adamova Graduated from the Vyatka State University for the Humanities with a degree in marketing and advertising. He has been promoting the company since 2006.

U2B group LLC. Packaging for business»
Field of activity: production of packaging, supply of equipment and packaging materials
Territory: head office - in Zheleznodorozhny (Moscow region), representative offices - in Moscow, Yekaterinburg, Izhevsk, Yoshkar-Ola, Kazan, Kirov, Naberezhnye Chelny, Perm, Syktyvkar, Ufa, Cheboksary, Chelyabinsk
Number of staff: more than 200
Number of company clients: more than 6,000 food industry and trade enterprises

Lenta LLC
Territory: head office - in St. Petersburg; regional offices - in Moscow, Volgograd, Nizhny Novgorod, Novosibirsk; 68 hypermarkets and 7 supermarkets operate in 39 Russian cities
Number of employees: 22,000
Total selling space of hyper- and supermarkets: 445,000 sq. m

GC "Dixie"
Business profile: food and consumer goods retail
Number of employees: about 40,000
Sales area: 583,583 sq. m
Revenue: RUB 147 billion

Shrink films are polymer films that can shrink and tightly fit the product under the influence of temperature.

Horizontal type equipment is used for packaging piece food and non-food products in a three-seam bag of the "pillow" type, which is formed from a roll of film. This type of equipment is also called flow-pack (English) flow packing). The packaging process on horizontal type machines is high-speed.

Ilyukha Sergey Guild of Marketers
Article first published in PROD&PROD Food Promotion magazine No. 2, 2014

Private label (PTM) is a brand owned by the entity that sells it. They can be created both by individual retailers and by cooperatives and purchasing unions of chains, regional associations of wholesale and distribution companies, large importers.

Abroad, private labels have emerged as a result of the struggle between large retailers and manufacturers of well-known brands. In the case when the market positions of both parties became approximately equal, the chains had to sell "promoted" products, overpaying the manufacturer for a big name and actually shifting advertising costs onto the shoulders of buyers. In the markets of different European countries, private labels account for a different share of the turnover, but the trend towards its increase is observed everywhere.

Pricing and popularity among the consumer audience of these products are largely determined by national characteristics, quality of life, consumer culture, the development of national brands and many other reasons. In Europe, private label penetration is highest in Switzerland, the UK, Germany, Spain and the Netherlands, where the market share of such products in value terms exceeds 30% (Figure 1). At the same time, in volume terms, their share is even higher, since the difference in price between private labels and analogues of well-known brands in the Western market is 30-40%.

Despite the fact that Russian retail chains from year to year declare the development of private labels as one of their priority tasks, today, as can be seen from Figure 1, the share of these goods in the revenue of domestic retailers is an order of magnitude lower than in European countries. There are many reasons for this: from solving such a difficult task as the production of high-quality products at a low price, and ending with the no less complexity of its promotion. In addition, minimum lot restrictions make such products available mainly to federal chains, purchasing unions, or regional associations of small retail chain stores.

According to the InfoLine agency, in Metro C&C the share of private labels in the turnover is 11.2%, in Dixy - 10%, in Magnit for 9 months of 2013 the sale of goods under its own brand amounted to 13.1% of the company's retail revenue .

Partially, the low penetration of such products in Russia is due to the fact that private labels here are cheaper than branded goods by only 10-20% on average, while in Europe the advantage of private labels in price is on average 25-30%, and in the non-food category the difference can reach 40-50%. This fact significantly reduces their attractiveness for the retailer.

Benefits of working with STM

When deciding to bring goods under its own brand to the market, the retail network pursues the following goals:

1. Increasing loyalty to the network.

In this case, a private label product is designed to better meet the needs of price-sensitive buyers. All economy class brands are focused on this. Image products are designed to fill niches in the assortment and maintain the loyalty of regular customers. As a rule, the name of such brands is consonant with the name of the chain store. Innovative products are produced in accordance with the latest market trends and trends and are intended for those who like to experiment, try the unusual.

2. Growth of profitability.

As mentioned above, most of the goods produced under their own brands, regardless of the price segment, positioning and tasks, allow the network to increase profits. This goal is achieved through high sales volume and optimization of the production process and logistics on the way from the factory to the end user.

3. Guaranteed quality.

As a rule, federal retail chains pay great attention to the quality control of products manufactured under private labels, starting with the formation of technical specifications for the product and packaging and throughout the entire period of manufacture and sale. Compliance with all the required measures is a laborious and rather costly process. At the stage of establishing the production of "own" goods, retailers assigned the responsibility for quality control to the employees of the private label development department, which most often turned out to be ineffective due to the workload and low competence of managers in purely technical matters. Recently, federal and even some regional networks and associations are paying more and more attention to the quality factor of their products, creating special services for this or attracting highly qualified specialists for outsourcing.

Guaranteed product availability.

Control of all stages of the production process allows you to optimally draw up a schedule for the release of products and ensure its sufficient quantity, taking into account the seasonality of sales and planned promotional activities. This protects the network from possible interruptions that could occur when working with the manufacturer's brand.

It would seem that the advantages are obvious. However, there are a number of additional costs for the retailer to create an economic model for working with private label products and compare it with the sale of branded goods of the manufacturer. In order to estimate these costs, let's consider the full cycle of work with private labels, from the development of an idea, naming and ending with the disposal of unused packaging.

production costs

When working with a manufacturer’s brand, the supplier comes to the retailer’s office, agrees on a price and a promotional plan, provides a deferred payment (commodity credit), delivers goods to retail outlets, assists in merchandising, conducts marketing campaigns at his own expense and on his own, pays a trade premium . One minus - the products are presented in all competing networks, and the retailer is forced to keep a low margin.

In the case of private labels, the markup can be 15 or even 30 percent higher. But they are successfully “compensated” by additional costs.

The algorithm for working with a private label is shown in Fig. 2.

The entire process of launching a new private label product takes six months to a year and includes the following steps:

1. Determination of private label strategy, name, logo Formation of a concept, strategy, creation of a private label logo is an important and expensive task that a retailer usually entrusts to a marketing agency. The cost of developing the brand of the network is transferred to all products released under private label.
2. Selecting a product category for a product release. As mentioned above, private labels are designed to best meet any of the needs of the potential audience. Be that as it may, in order to form an optimal price offer for a non-unique product, it is necessary to obtain the lowest cost from the manufacturer, and this is possible only if the product has large sales volumes and the buyer is not sensitive to the brand. In addition, it is desirable that there is no clear leader in the product category. According to research conducted by Nielsen and private label analysis of leading retail chains, the most attractive sectors in this regard are dairy products, groceries, confectionery, juices, water, beer, alcoholic beverages, as well as paper products, personal care products and household chemicals.
   According to a study by PwC in Russia conducted in 2010, more than 90% of private label sales in the Russian Federation account for generic trademarks (whose names are not associated with the network or manufacturer's brand) and imitators (umbrella brands). At the same time, a large share of private labels is concentrated in the economy class. In recent years, they have begun to actively develop in the middle and high price segments, but their level of penetration is still insufficient.
3. Development of a strategy for bringing the product to market. To date, experts identify three main strategies for developing private labels:
   • Dumping. The most common strategy, since in the conditions of market stagnation and the expectation of a recession, most consumers remain quite sensitive to the price of goods with acceptable quality.
   • Replacement of a competitor. A more sophisticated approach that focuses on the tastes and established preferences of the buyer. The challenge is to replace leading products in categories where brand habit is not an important choice. As a rule, this strategy is implemented in stages or in case of significant disagreements during negotiations with the sector leader. The path is quite risky, since it is not possible to avoid a decrease in the level of sales in quantitative terms and a certain loss of loyalty even when reaching a complete replacement of a competitor in terms of profitability.
   • Brand extension. The strategy, the essence of which is that the loyalty of the buyer to the name of the retail chain is transferred to products under their own brands. In this case, private label becomes a full-fledged brand, which allows it to be positioned as a direct competitor to a popular manufacturer in the same price segment, and over time it may go beyond the network.
   Based on the chosen strategy, the remaining requirements for the product are formed.
4. Development of specifications and packaging design. Certain costs are associated with the involvement of specialists in the establishment of the technical conditions of the product and the design of its appearance.
5. Conducting a tender for production. In principle, this stage does not require special costs. Various retail chains hold open or closed tenders. But after agreeing on the conditions on price and production volumes, it is necessary to conduct a study of the production capabilities and reliability of the supplier, and this is already associated with business trips, the involvement of specialists and, as a result, with additional costs.
6. Purchase of raw materials and components. As a rule, after agreeing on commercial terms of production, the supplier can only compensate for the money spent. In this case, the costs of purchasing raw materials and packaging are borne by the retailer. The main problem of the production of goods under private label is that in order to obtain a competitive price, it is necessary to purchase raw materials and components in large quantities, which leads to large advance payments, storage of containers, and sometimes products manufactured in large quantities, payment of credit funds (instead of a commodity loan in case of work according to the manufacturer's TM).
7. Next come the costs associated with product promotion, merchandising, regular quality control, and possible disposal of leftovers.
8. Another significant cost item is logistics. In the production of goods under private label, the retailer takes over the entire logistics chain from the factory to the store counter, and this, depending on the product category, can be very costly.

Let's estimate the total costs:

• trading premium - up to 10%;
• advertising, placement on the spot for additional display, price promotions - up to 15%;
• logistics costs and merchandising - 2-5%;
• funds for the launch of the project, the purchase of raw materials, quality control, disposal of residues - 2-5%.

As you can see, the additional costs of the network can be up to 35%. And this is provided that a difference in price on the shelf of 10-15% is also needed. Apparently, the manufacturer should give a fifty percent discount from the cost of the main line when releasing private labels...

Hopes and fears

What does the manufacturer expect and what does he fear when releasing goods under a private label?

There are several logical explanations for which a company can start producing goods under a private label of a retail chain:

• gaining network loyalty in order to introduce or expand the product line under their own brands;
• advertising their trademarks and themselves as a manufacturer by associating in the minds of the consumer with the name of the retail network;
• optimization of logistics for the supply of its products by increasing supplies to the Customs Union;
• obtaining guaranteed and timely payment for the goods;
• additional income.

The main concerns of the manufacturer are related to the possibility of losses. They are due to the fact that the economic model of Russian enterprises is significantly different from the Western one.

In Europe private labels are produced by companies that initially built their business on the principle of exclusively working with private labels of the network and were thus spared from organizing an extensive sales and distribution system, which we see in Russia. They do not need marketing and sales departments - by the way, quite expensive - otherwise these costs are included in the cost of goods. Thus, a European manufacturer can ensure the supply of products with acceptable quality at a reasonable cost.

Manufacturer's risks are as follows:

1. Get a loss from cooperation due to the need to provide the retailer with a price below the full cost of production.
2. To become dependent on the seller due to the fact that when reorienting production to the production of private labels, it will be necessary to reduce commercial divisions and the active sales department, as well as abandon the client base that has been accumulated over the years. In the event of termination or termination of the contract with the network, it will be impossible to quickly restore sales volume, which will inevitably entail serious financial losses.
3. If a retail chain insists on launching an "umbrella brand" similar to the TOP positions of its own range, there is a danger of substitution and crowding out of their products.

Win-win move

A huge number of manufacturers seek to supply retailers with goods under private labels. How to get the desired contract? There is a simple and effective rule: you need to understand what guides the retail chain's private label manager when making a decision, and make him an offer that you yourself would accept if you were in his place.

1. Assess the needs of the retailer:
   • analyze the market and assortment of the network;
   • evaluate the network strategy when working with private labels;
   • formulate the requirements for the product needed for the network.
2. Weigh your own strengths and capabilities:
   • check if you can sell a product with the required characteristics at the required price;
   • objectively assess your production capabilities: will you be able to supply products in the required quantity without compromising the existing sales volume;
   • identify the need for project financing and identify sources of fundraising;
   • identify suppliers of raw materials and components and make sure of their reliability and readiness to provide everything necessary for the production of private labels;
   • calculate the cost of production before and after launching a private label project. Track how the increase in volume affected the cost price. Develop a cost reduction program;
   • compare the economics of a contract when cooperating on your own brand and private label network;
   • formulate what goal you are pursuing;
   • evaluate your risks and, if they are significant, draw up a program to reduce them.
3. Make an offer that will benefit both the retailer and you, and make it without waiting for a tender to be announced. Your offer will become much more attractive if you:
   • do your own research;
   • simplify the quality control procedure or take on part of the costs;
   • minimize network costs for the purchase of raw materials and packaging and storage of finished products;
   • Distribute a package of additional services provided to your trademarks and private label networks.

The proposed work algorithm can be quite effectively implemented by both domestic manufacturers and importers. The weakening of the ruble at the beginning of the year reduced the competitiveness of foreign goods. Nevertheless, the emerging trends towards a depreciation of the EURO, an increase in food imports from European countries, and the focus of a number of Western enterprises on the manufacture of private labels for European retailers make cooperation with Russian retail chains in the production of private labels and their own imports promising.

The trend to create a private label is actively developing in food and non-food trade, and often such products provide the main share in the turnover of companies. Networks "220 volts", "Yulmart", DNS tend to sell something of their own, even if it will be accessories. The brightest price tags and the biggest discounts, as a rule, are for private label products.

In the trade of electronics and household appliances, the own brand, or private label, carries a large load. For many stores, this is the only chance to survive and cope with the competition. Why is this happening? The fact is that most stores tend to trade in the so-called A-brands such as Sony, Panasonic, Canon, Bosch, etc., but they can only be interacted with through vendors that receive the main profit. The retailer gets only a small percentage. One more thing - everyone without exception sells large brands, which creates fierce competition between sellers. There is only one way out - private label, capable of providing a unique product offer, plus the entire margin goes to the store. Another important advantage of launching your own label for a retailer is the opportunity to become a vendor yourself and sell products on the shelves of competing chains.

The 220 Volt chain, for example, sells goods under its own Hammer brand. Small consumables and large appliances such as a grinder or a Chinese-made building hair dryer with their own labeling are sold at a bargain price and attract a buyer. Another major retailer, Ulmart, is developing the brand of Zifro TVs and monitors, which is 1.5 times cheaper than products from well-known manufacturers. The difference for the buyer is significant, while the seller, meanwhile, receives the entire profit - for both, the benefit is obvious. Unlike "220 Volt" and "Yulmart", whose private labels are not widely known, the electronics retail network DNS sells smartphones directly under the brand name of the store, thereby stimulating additional consumer loyalty.

The online store "Photosklad" tested this scheme on itself, for a year now we have been developing our own brand of small electronics and accessories Prolike (smart watches, fitness bracelets, optics, batteries, light filters, etc.). The product matrix is ​​very wide, in our opinion, it should be so - in almost any section of the store, in addition to well-known brands and Chinese analogues, there should be private label goods, which will allow both the buyer to get more choice and the seller to present the goods in a quality manner. From our own experience, we have seen that it is fundamentally easier to work with private label products. Private label provides independence from the manufacturer in terms of marketing: you can, for example, organize promotions and sales, and just play something. This is beneficial for both the store and the customer and plays an important role in building the retailer's image.

If you look at the Russian market of electronics and technology in general, now it is the stores that are creating a platform for domestic production. Therefore, the development of SMT in this segment is important not only for the companies themselves, but also for the country's economy as a whole. Today, Prolike accounts for about 3% of Fotosklad's sales. If the situation on the market changes in favor of domestic retailers, and the state cancels preferences for foreign online stores operating in this industry, we will have the opportunity to increase the share of private label sales to 20-30%. In this case, we can talk about launching our own production in Russia, which means the development of the domestic industry.

Any modern company that respects itself and its customers cannot do without a special corporate identity and, therefore, without a trademark that makes it stand out from other similar companies.

Definition

A trademark is understood as a combination of a company name, a brief text of information and graphic details. This sign allows the manufacturer to show his individuality and uniqueness.

A private trademark is recognized by law as the intellectual property of an individual or legal entity and is protected by the Law on Intellectual Property. It is assigned a certain value on the balance sheet of the firm (organization). refers to intangible assets. The rights to it can be sold or transferred, as well as create a franchise or pledge to a bank.

Types of trademarks

Today they are classified as follows:

1. verbal. Usually this is a name with a combination of fonts. More than 80% of all trademarks fall into this category. As an example, we can cite VTB, Honda, Adidas, etc. There are also famous slogans here, which are also registered and protected by law. For example, Apple: "Think different".
2. Fine. This includes symbols or graphic pictures that do not contain word or letter elements. For example, the well-known Lacoste crocodile or Nike flourish.
3. Combined. This is a combination of the first and second. They are called logos in everyday life. For example, a payment system familiar to many is MasterCard (a verbal name enclosed in two circles).

By the way, you can register the shape of the package and the color scheme.

Small clarification

The stable combination of "trademark" in everyday life is used extremely rarely. It is much more common to hear "logo", "brand" or "trade mark". And if the meaning of these expressions is similar, then the concepts differ.

The word "brand" comes from marketing. It implies the image of a product (service, firm, organization) and its philosophy. "Logo" - a unique image that is applied to the product. And only the word "trademark" carries a semantic load similar to the expression "trademark".

None of the expressions described above has been officially adopted in Russian legislation. There is only the concept of "trademark". It is referred to in Article 1477 of the Civil Code of the Russian Federation. And the creation of your own trademark consists precisely in issuing a certificate for a trademark.

Registration takes place in several stages. On some of them, to facilitate the process and save money, it is recommended to contact specialists.

Stage one

The developed sign must be checked for uniqueness. And even before the application for registration is submitted. You can do it yourself. On the Internet, there are freely available databases of Rospatent (in our country, it is understood as the Federal Institute of Industrial Property - FIPS). But there are also organizations that specialize in checking the uniqueness of a registered mark.

This stage is quite responsible. Since the detected repetition will entail a refusal to register and the loss of the paid amounts of state duties.

However, the absence of repetitions is not yet a guarantee that Rospatent will pass the trademark. Department officials very often “meet” similar symbols or graphic images, and the applicant has to prove the uniqueness of the presented sign.

Companies that have undergone a similar procedure recommend that beginners turn to professionals. Firms specializing in evaluating the uniqueness of a manufacturer's trademark promptly conduct a reconciliation and issue a conclusion. They were enshrined at the legislative level in the early 90s of the last century.

Patent Attorneys

That is, the institution of intermediaries has officially appeared, whose duties include the protection of property in the field of intellectual property. These are patent attorneys. It is they who represent the interests of the applicant for trademark registration in Rospatent. A patent attorney requires only details and an image of a trademark for his work. No further participation of the applicant is required. Naturally, this is more expensive, but the period for obtaining a certificate is reduced significantly.

The help of attorneys significantly reduces the time of registration and confirmation of uniqueness, which, in turn, reduces financial costs.

Today there are about 2,000 active patent attorneys in Russia. Their activities are regulated by civil law and the law of December 30, 2008 No. 316-FZ “On Patent Attorneys”. The fees and other payments of patent attorneys are regulated by Government regulations.

Stage two

The proprietary mark is always used unchanged. Therefore, special attention must be paid to the choice of the class of goods (services). For this, there is an international classifier (MKTU). In it, goods (services) are divided into 45 classes. Ten of them are devoted to services, the rest - to goods. Working with the catalog requires certain skills and knowledge. For example, the same name of a product (service) may belong to different classes, and you will have to search for it first by purpose, then by the material of manufacture, etc. To work with the classifier, Rospatent has developed methodological recommendations. It is advisable to start your work at this stage with them.

Stage three

If the preparatory work is completed, you can file an application for your own trademark (its form is determined by the order of Rospatent dated March 5, 2003 No. 32). This will require a package of documents. It includes:

Application for registration, which will indicate the data of the individual (legal) person representing the trademark;

Documents confirming the payment of fees;

Image of the future brand (8 copies) with a mandatory application with a description of the logo and a list of goods from the international classifier;

Certificate of state registration of an individual entrepreneur or legal entity.

If a patent attorney was involved in the registration of a trademark, then a notarized power of attorney is required.

Stage four

Submission of prepared documents to Rospatent. There are several ways:

In person at any branch of the department,

Russian Post (with notification),

Fax (but originals are still required),

Electronic application on the official FIPS website (for this you need to install special software and get a key),

With the help of a patent intermediary.

On the day of receipt of the application with the attached documents, the secretary of Rospatent draws up it and informs the applicant of the registration number.

Stage five

It consists in tracking the status of submitted documents for registration of your own trademark. Documents accepted by the department undergo a formal examination. That is, the application is checked for the correctness of the compilation and content, the availability of the necessary documents and their copies, etc. The whole process takes about two months. If there are no comments, Rospatent takes it to work.

Further, a substantial examination begins, which can last up to six months. At this time, there is an active verification with the trademarks of Russia and the world, which is accompanied by correspondence with the applicant. Usually experts require something to be clarified or supplemented. It is at this stage that unprepared (see stages one and two) applicants are “cut off”. If there are no comments and there is no need to defend one's innocence, the department decides on the registration of the trademark. In this case, the applicant receives an official letter from Rospatent.

It is possible to shorten the application deadline. To do this, you must provide weighty arguments for the speedy receipt of a certificate of uniqueness. For example, you can specify that the products are shipped abroad.

Stage six

Obtaining a coveted certificate. After notification of a positive decision, the applicant must pay the state fee for obtaining a certificate and submit a payment document to Rospatent. Two months are given by law for the issuance of the certificate. During this time, the patented mark is entered into the state register and published in the monthly official bulletin "Trademarks". The resulting document must be renewed every ten years.

Having received it, the owner can sue and demand compensation for material and moral damage for the unlawful use of the trademark by third parties.

It is not that simple

A trademark in the modern world of consumption has its pros and cons. The benefits of private labeling include:

Reducing the influence of competitors on the sale of goods (services), as well as advertising and marketing costs;

Establishing your own pricing system,

Margin increase,

Unconditional control over the distribution of goods (services) and its quality.

At the same time, the manufacturer faces some problems. For example, when releasing a product or producing high quality services, one should not overprice. For competitors will immediately occupy the vacated niche. For this reason, for example, well-known retailers do not allow similar product lines of competitors in their stores. In addition, the brand must be constantly promoted. And this is almost the main problem.

Possible mistakes

Most often they occur:

If the applicant tried to independently determine the classes according to the International Classifier;

The trademark was not unique;

The designation is described incorrectly or inaccurately (for example, color scheme);

There are inaccuracies in the details for paying the state duty;

The trademark contains elements of state symbols or images of famous people (without their permission). A list of all prohibited signs is given in the Civil Code, article 1483.

The exclusive offers the trade mark "Metro". Focusing on the needs of their customers, whether they are small points of sale or professionals in the hotel or restaurant business, the company's experts develop their own Metro brands. These are practical, modern and affordable (for the cost) proposals. For some, this is a line of basic products (services), and for some, complete sets for serving tomorrow at a hotel at the lowest price.

Metro's portfolio already includes six active focus brands designed for professionals, as well as a number of additional offerings.

How to position a private label product

According to marketers, positioning is the art of creating a brand image in the mind of the target audience. That is, it should carry information about its advantageous difference from competitors. This is caused by combinations of such characteristics as distribution channels, touch, price, level of service, image (advertising impression, PR), etc. In a global sense, positioning is a company's activity aimed at convincing consumers that their products (services) are significantly different competitors.