Private Label Discussion - 275 Words

Private Label Discussion (Coursework Sample) Content: Private Label Products Discussion Student’s Name Course Date Private Labels Products Discussion The main objective of many businesses is to maximize owners’ wealth and generate profits from invested capital and available resources. However, the operations of such businesses are guided by the fiduciary duty to provide quality products and services at the right quantity and price. Private Labels (PLs) refer to products manufactured by one company and sold by another (Vargas-Hernà ¡ndez, 2011). In essence, the manufacturers of a National Brand (NBs) may produce and sell products to wholesalers, retailers and other interested parties at a low price, who in turn brand the products under their name and sell them at a lower price compared to the products marketed under the national brand. By doing so, manufacturers are able to increase sales volumes by providing retailers with alternative products at lower prices to cover market demand. Arguably, manuf acturers should feel free to sell private labels as a source of revenue. Private labels have been in the market for the past 100 years but have gained popularity in the past two decades. Although there have been controversies on the quality of private labels due to the low prices, recent efforts from manufacturers have led to improved product quality. As a result, many consumers have changed their traditionally-held perception that viewed private labels as inferior (Vargas-Hernà ¡ndez, 2011). Also, many retailers of private labels have improved their marketing efforts and competitive spirit, leading to the prevalence of PLs in many markets. The promotion of the NBs has also led to higher sales and higher revenue for both manufacturers and retailers, enabling the sellers to meet market demands and satisfying consumer needs. As such, manufacturers should continue selling private labels. Since PLs are acquired at low prices, their...