Comparative Essay on National Brands and Private Label Brands

A national brand is a product that is owned by large manufacturers and is marketed throughout a national market. Private label brands are owned by a retailer or supplier who acquires his or her goods from a contract manufacturer under his or her own label. H&M is a multinational clothing company. It deals with clothing for men, women, teenagers and children. It carries a national brand known as ZARA and also carries private label brands such as; cheap Monday, monki, weekday and COS. H&M competes with Inditex which came up with the ZARA brand.

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Comparison between the Competing Products

Fashion Trends

The fashion trends between ZARA and H&M are not similar. H&M mainly deals with women wear. They do not focus much on mens clothing. Conversely, ZARAs products are balanced in terms of clothing for men, women and children. H&M collaborates with fashion designers and celebrities to market their products while ZARA gets fashion magazines to advocate for their products. Additionally, ZARA provides clothing that is suitable for business meetings or elegant parties while H&M provides street fashion (Glynn & Widjaja, 2015).

Sizing Specs and Standards

The sizing specs between H&M and ZARA are different. ZARA targets an audience that is between 25 to 35 years old while H&Ms audience is people who are 20-35 years old. The age difference brings about the difference in sizing specs. The standards of the clothes made by ZARA are cool and fashionable (Glynn & Widjaja, 2015). They create the impression that the one wearing is unique and superior. Conversely, H&M creates the impression that the one wearing can be stylish and popular. It also creates an atmosphere of happiness and fun.

Fabrications and Materials

H&M uses fabrics such as; cotton, recycled polyester, recycled polyamide, lyocell, recycled wool, organic linen, denimite, organic hemp, organic silk, natural rubber, recycled glass and recycled plastic. ZARA uses organic cotton in most of its clothes. They also use recycled materials (Glynn & Widjaja, 2015).

Country of Origin

H&M does not own any factory that manufactures its products. They have about 820 suppliers in Europe and Asia. Additionally, they also acquire their products from China, Bangladesh, India, Cambodia and Turkey. ZARAs products are manufactured from Spain, Portugal and Turkey where they have their own factories (Glynn & Widjaja, 2015).

Pricing

The pricing between H&M and ZARA are different. H&M sells its clothes at a cheaper price compared to ZARA. H&M offers discount to a larger percentage of their products while ZARA provides discount to only a small percentage of their products. However, H&M are more bullish when it comes to offering discounts. The average price point at H&M is $21.40 and at ZARA is $48 (Glynn & Widjaja, 2015) .

Difference between Target Audiences in National and Private Label Products

An associate is supposed to ensure that the needs of a client are met. They should also ensure to get feedback from clients on how to improve the various products. The idea of having both national and private label brands in your store with an associate should make work easier. The associate should ensure that the two products have an equal number of customers. While marketing the products, an associate should not be biased (Mo, 2015).

There is a difference between the target audience of national brands and the private brand labels. National brands are products that are well-known by people from all over the world. Conversely, private label brands are products that specific retailer shops come up with but are not as popular as that of national brands. Therefore, most retailers opt to include national brands in their stores so that their products can be recognized (Mo, 2015). Due to their expensive nature, national brands are said to be more luxurious. These products are mostly bought by the rich. Private label products are cheaper compared to the national products. The target customer for these products could be the local people.

Pros and Cons of National versus Private Label Brands

Private Label Brands Pros

A major benefit of a private label brand is that it is owned by a retailer. He or she can market it as his or her own. This brand is uniquely identified with the retailers store. They are usually sold at low prices than national brands but yield higher profits. Additionally, during tough economic periods, customers prefer private label brands. Many private label brands must be put together for one to come up with a product mix. However, many private label brands are beginning to reach national brand status (Nenycz & Romaniuk, 2014).

Private Label Brands Cons

Most peoples perception towards private label brands is that they are generic or of lower quality than national brands. Private label brands can only be sold in the retailers stores or online. The retailer is also required to make licensed agreements with other providers. They do not have any control over a private label brand. Consumers work under the assumption that, if you do not want to pay much for a private label brand, then you will not get much value (Nenycz & Romaniuk, 2014).

National Brand Pros

National brands are greatly recognized compared to private label brands. It is promoted through media and national television. These products are used by retailers to attract customers that otherwise would not visit their stores. Discussions that are by word of mouth are very common since most people are familiar to these products. National brands are sold at higher prices compared to private label brands. This is because most people assume that what you pay is what you get. Therefore, for a customer to get quality products they must spend more money. National brands have a name that consumers recognize and trust (Rossi & Bakpayev, 2015).

National Brand Cons

Cost is the biggest disadvantage on national brands. Some retailers try to lower the cost of such products and end up not making profits from them. They carry these products for them to remain competitive and to provide what their customers need (Rossi & Bakpayev, 2015).

In conclusion, the distinctions above impact my retailers overall strategy in that I am able to identify the advantages and disadvantages of the national brands and private label brands. This also makes it clear why retailers opt to carry national brands even though they are not making profits from them. Additionally, I have learnt that, for a private label brand to prosper in a competitive market, retailer should be more innovative with their products. The strength of private label brands varies with economic conditions. Consumers prefer private label brands during difficult economic periods. National brands are advertised through the media while most private label brands are not since retailers want to cut costs. This makes the national brands seem more superior to the private label brands.

References

Glynn, M. S., & Widjaja, T. (2015). Private label personality: applying brand personality to

private label brands. The International Review of Retail, Distribution and Consumer Research, 25(4), 362-378.

Mo, Z. (2015). Internationalization Process of Fast Fashion Retailers: Evidence of H&M and

Zara. International Journal of Business and Management, 10(3), 217.

NenyczThiel, M., & Romaniuk, J. (2014). The real difference between consumers' perceptions

of private labels and national brands. Journal of Consumer Behaviour, 13(4), 262-269.

Rossi, P., Borges, A., & Bakpayev, M. (2015). Private labels versus national brands: The effects

of branding on sensory perceptions and purchase intentions. Journal of Retailing and Consumer Services, 27, 74-79.