8/12/2019 TeamDNA_IIMKozhikode

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IIM Kozhikode Team - DNA Angad Singh (12/082)Deepak Laddha (12/092)Naren N Kumar (12/111)

Private Label Strategy Shoppers Stop

SS Challenge:To drive business in menswear segment for the STOP and life brands.

Scope of Analysis: We have restricted our scope to understanding the consumers perception ofexternal/private label brands. Although Shoppers Stop needs a comprehensive benchmarking on the

4Ps, we believe the important of these are Promotion and Place (in-store). We understand that it isnot the tangible product attributes but the intangible consumer perceptions that could provide

Shoppers Stop a durable competitive advantage over its competitors in private label business.

Deliverable:Suggest possible ways to help consumers identify with the private label brands STOP

and Life, true to its positioning; such that it leads to a increase in store patronage and loyalty.

Methodology:Primary research using one to one contacts, mall intercepts in the cities of Bangalore,

Pune and Mumbai to identify top of mind factors that consumers use to discriminate between privatelabel and external brands.

Identified factors: The most differentiating factor is the perceived quality of private labels as inferiorto that of external brands. This correlates with the previous research done in apparel retail. Hoch andBanerji (1993) found evidence to support the notion that perceived quality was much more important

than the level of price discount in determining the private-label category share. At equal prices,consumers preferred the external brand to a private label (Narasimhan and Wilcox, 1998). Thispreference asymmetry was attributed to perceived quality differences between the external brand and

private label (Hoch and Banerji, 1993) as well as differences in image-building advertising support.

The next worry is the absence of awareness and lack of brand equity amongst friends and peers. Theconsumers are well aware of higher margins with private label and hence are concerned that theretailer is more benefitted by sale of private label brands than the consumers themselves. Richardsonet al. (1996), recommended that right aesthetic impression serves as external cue for creating a haloaround stores own private label. Extrinsic cues are product attributes which are not part of thephysical product and they can be changed without affecting the composition of the product itself, e.g.price, advertising, packaging, warranties and brand name (Blair and Innis, 1996).

We suggest using these extrinsic cues to its full potential to signal higher quality of private label brandviz. STOP and Life. To address the awareness we suggest using innovative means ofcommunication to engage consumers.

Recommendations:We have common recommendations applicable to any private label brand andspecific recommendations for STOP and Life brands. Our recommendations build on consumerinsights from our primary research and are fully implementable with very low costs involved.

Brand Common Strategy Brand Specific Strategy (comprehend with values, perception)

STOP

Offer longer warranty oncolour, cloth shine, tosignal high quality

Use custom designed

packaging, carry bagsprominently displaying theprivate label brand

Give away extras(buttons, zipper) kit withevery private labelpurchase

SS loyalty program FirstCitizen Club could bemodified to have higherreward points onpurchase of private labels

Position near the premium external brand e.g. Arrow,Van Heusen, Louis Philippe, Zodiac

Relate it to a social cause - exchanging old pairs for adiscount on new purchases, later donated to the

needy

Life

Use wireless devices inside the stores to transmitwallpapers, jingles, info. about special offers, newmerchandise arrivals in store to consumers mobilephones (wireless compatible); supplemented by in-store advertising of private label brands

Position near that external brand with which it ismaximally feature differentiated on color, texture,fabric

Special offers e.g. tickets to new movie releases onpurchase of private label brands over a minimumamount.