This is where a retailer is situated itself in the final market. This positioning aims to provide a competitive advantage to the retailer by differentiating itself from the rest of competitors. For this reason, it should guide the rest of decisions about how the retailer satisfies its target consumers. This process involves a mix of the marketing mix variables (i.e., product, price, place and promotion) into an overall strategy with the intention to succeed. Furthermore, it requires to observe potential customers by means of an accurate market segmentation process that permits the retailer to identify a group of customers and match them as precisely as possible to the retail offering (e.g., Newman & Cullen, 2002 ).
Published in Chapter:
Private Labels at the Service of Retailers' Image and Competitive Positioning: The Case of Tesco
María Pilar Martínez-Ruiz (University of Castilla-La Mancha, Spain), Ines González-González (Public University of Navarra, Spain), Ana Isabel Jiménez-Zarco (Open University of Catalonia, Spain), and Alicia Izquierdo-Yusta (Burgos University, Spain)
Copyright: © 2016
|Pages: 22
DOI: 10.4018/978-1-5225-0220-3.ch005
Abstract
Since their introduction decades ago by retail companies, private labels have passed through several stages of market penetration and customer acceptance. For retailers, private labels have become valuable instruments for image creation and competitive positioning. They also have been a key factor in facilitating internationalization and the decision to expand to other countries. This chapter traces the evolution of private labels, from their origin to the present, placing emphasis on the strategies that retail distributors use to obtain and maintain competitive positions. As an illustration, the authors examine the case of the Tesco grocery retail chain, following it from its establishment in the United Kingdom to its most recent expansion into South Korea. The case demonstrates the role of private labels in the company´s evolution and international expansion and thus reveals the strategies followed in developed versus developing markets. Deep knowledge of customers, enables companies to obtain a lead position in markets and build an image associated with innovation and added value.