Private label portfolio management for international retail chain in the Russian consumer market (case of Prisma)

Abstract

The goal of the following paper is to develop a set of actions and practical recommendations concerning balanced private label portfolio development, which can be beneficially applied to Russian retail market. Main objectives: 1) Study the private label strategies and FMCG retailer image components 2) Conduct an empirical study to identify factors affecting the perceived quality of the goods under private labels of retail chains Pyaterochka, Auchan and Prisma in various product categories 3) Investigate the perceived image of the chosen retailers, study the effect of perceived risks on the relation between retailer’s image and private label purchase decision-making process 4) Conduct an audit of existing private label strategy and propose strategic recommendations for the further store brand portfolio improvement (Prisma case) Main results: Potential of private label as a strategic tool is vastly underestimated by the retailers operating on Russian market 1) Negative stereotype regarding quality of private label exist on Russian market. Accordingly, companies need to convert it into “high quality goods” preposition with the right communications 2) Perceived quality of goods under private labels is affected differently by the associations with product category and retailer in dependence with the product category the item belongs to 3) Associations with the retailer and as following with its brand are a part of image considered and also affect the purchase intention of private label goods 4) Correct extension of the PL portfolio will contribute to differentiation of the retailer and increase loyalty to the brand as well as the entire chain as a whole 5) The current Prisma private label portfolio may be stretched vertically , as well as horizontally to the unused previously product categories 6) Premium private label introduction is a prosperous dimension for the further portfolio extension for Prisma retail chain on Russian market, which is affordable for the company in terms of store image and brand equity accumulation.