How the private label can be managed by small and medium sized retailers: an Italian case study

n recent years there has been a dramatic improvement of the retailers’ own label product performance, arisen from an extension both of existing and new product lines covered. As consequence of advantages connected to the employment of a private label (Cole, 1955; Brosselin, 1979), not only big sized companies, but also small and medium sized retailers have implemented their own brand-based policy. Therefore, it can be highlighted that smaller companies must face some limits about the organizational, financial and strategic aspects, forcing them to adopt different strategies, based for instance, on private label of the “non-store brand” type. With this term special reference will be made to private label where labelling does not contain any mention of the retailer’s sign. In order to verify how a “non-store brand” can be implemented in the medium and small sized retailers’ marketing mix, an Italian case of study has been analysed. A focus on the consumer behaviour is made, since it represents a fundamental factor for the determination of a private label’s development potentiality (Holbrook and Hirschman, 1982; Simonson et al., 2001). In an attempt to verify which is the level of maturity of the Italian small and medium sized retailing companies, a comparison with the European retailing model could be made. Both the Italian and the International literature are analysed, with the purpose to underline some potential existing differences and common features between diverse markets. A primary data gathering is needed, with the aim to explain the consumer awareness and fulfilment referred to the private label products, as shown in the case study. The findings of this research show that medium and small sized retailers are aware of the need to share investments arising from a private label development by joining a Buying Group, or similar organizations, aimed to get economies of scale, economies of replication and economies of scope (McGoldrick, 2002). The hypothesis that is developed in this paper refers to the small sized retailers’ ability to get high performance by implementing a private label of the “non-store brand” type.