Essay on Merchandise Management: Pros and Cons of National Brands vs. Private Label Brands

2021-07-29 07:41:38
5 pages
1151 words
University/College: 
Carnegie Mellon University
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Essay
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Macy's has grown to be a huge fashion name in the United States. The brand has made an effort to compete in the retail industry against industry giants such as Amazon. Being in the market for numerous years, the company has many cumulative years of experience and also developed a good reputation with its customers and the market. The paper looks at analyzing the national brand and a private level brand as carried by the photographer.

Macys has both national brands and private label brand which helps attract more customers. Macy's competes for some of the national brands in the market by providing products at competitive prices. The national brands in the market create a stiff competition for Macys private brands. The retailer has made sure that the two brands are sold to create an opportunity for every customer to acquire the right products. The companys Style & Company brand competes in the market against Old Navy which is a national brand.

Comparison of the "Old Navy" brand and "Style & Company."

The competing products are of similar fashion trends. The similarities come with the type of products. Both brands sell dresses for all body sizes and shape thus creating substitute products for the market. The only difference that can be seen where the Old Navy brands focus is also put on mens clothing while the Style & Companys brand is focused on only the womens fashion. The Old Navy brand thus has a larger customer base due to its ability to appeal to clients from both genders and age groups.

The fashion products sold at Old Navy have numerous similarities compared to the ones sold Macy's Style & Company department. The first similarity can be identified when it comes to pricing. The pricing of each of the brands is comparably similar. As a consequence, the two products compete in the market equally, and thus the marketing efforts make the difference. For most of the products, Style & Company tends to be cheaper. However, the difference is insignificant, and one can thus easily identify the brands as similar when it comes to pricing.

Another similarity that can be identified is that the two brands manufacture their products in the United States with industries abroad for mass reproduction. The brands have focused on promoting their culture by creating products that are likely to appeal to the local market and the international market. The products manufactured are of high quality, and the manufacturer has put more focus on ensuring customers can feel satisfied with their goods and services (D'innocenzio, 2011). The brands thus have similar products, manufactured by the companies based in the US and sold both locally and internationally.

Discussion

A discussion on the national and the private label products sold by Macy's helped create an understanding of the target market difference that exists in the market. The analysis of the two brands was facilitated by Macy's associate who works at their warehouse as a manager. It is easy to identify the difference between the target consumers of the national brand and the target consumers of the private label brand. In the market, the two brands mean two different things. First, the national brand always shows a brand that has established its presence in the market, commanding a larger market share and creating opportunities for customers to feel the pride of their brand.

The target market for the national brand is associated with the wealthy customers. National brands create better customer relationships and better ways to interact with people of different interests. Customers who purchase national brands mostly want to feel the pride of wearing the brands. On the other hand, the private label brands are mostly focused on providing customers with substitute products for the market. For example, the products sold by Calvin Klein can be sold cheaper by a private label brand. The national brands thus come with a price and higher cost in most of the products sold while the private brand comes with affordability but still good quality.

Pros and Cons of National Brands vs. Private Label brands

Pros of National Brands

National brands play at an advantage in the market since they provide customers with high-quality products. Customers will prefer to purchase national brands and pay higher. Also, national brands are sensitive to quality changes. The brands prefer maintaining high-quality products even if the pricing will be higher.

Cons of National Brands

The main disadvantage of a national brand is that they are considerably expensive in the market. Most customers are unable to afford the national brand due to the high pricing. The brands are thus unable to meet all the market needs. For example, some customers who are unable to afford the pricing of the products focus on acquiring substitute brands instead.

Pros of Private Label Brands

The most important aspect that comes with private label brands is affordability to customers. Customers can afford each product sold in the private brand as compared to the national brands. As a consequence, the brands appeal to the entire market.

Cons of Private Label Brands

Private label brands have a quality disadvantage. As the consumer preferences change, most customers prefer purchasing brands of higher quality at a higher price rather than low-quality products (Quelch & Harding, 1996). It is always a disadvantage having a product of low quality in the market. Additionally, the retailers are unable to gain full control of their private label products which are slow in responsiveness when it comes to the market.

How the Pros and Cons affect Macys Overall Strategy

The company has been unable to access a more significant market share due to the disadvantages mentioned above. The retailer cannot compete favorably in the market against brands such as Amazon and even Target. Such retailers have increased their focus on marketing and also expanded their range of products. In their stores, the companies have both the national and private brands.

Sustainable Competitive Advantage

Macy's can sustain its competitive advantage due to its ability to use cutting-edge technology to understand consumer needs and meeting their preferences. The company adapts to the changing technology creating different marketing channels and also focusing on acquiring a more significant market share (D'innocenzio, 2011). The company has been able to gain a competitive advantage in the market by providing its customers with little changes which are sustainable in the long run.

Conclusion

In conclusion, the competition in the market has created an environment for Macy's to create a better environment for creativity and quality products and services. Its strategy should be more focused on entering markets such as Africa and Asia. Targeting such markets will enable the brand to compete favorably against more prominent brands in the market.

References

D'innocenzio, A. (2011). Little advantages have Macys beating competition. The Seattle Times. Retrieved 19 October 2017, from https://www.seattletimes.com/business/little-advantages-have-macys-beating-competition/ Quelch, J., & Harding, D. (1996). Brands Versus Private Labels: Fighting to Win. Harvard Business Review. Retrieved 19 October 2017, from https://hbr.org/1996/01/brands-versus-private-labels-fighting-to-win

 

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