Private label today is all about quality and value. Families are cash strapped and can really use the savings that great private label products such as Via Roma, GreenWay, Hartford Reserve, Food Basics, Home Basics, Preferred Pet, Live Better, Market Spa, and America’s Choice provides.

I can clip coupons, ;use clipless coupons and bonus savings cards, buy private label, and reap a guaranteed savings of 40 percent and more on my weekly grocery bill.

1) Yes, some major private label purchasers (retailers) retain independent testing labs to test prospective PL products. They meet or exceed the brand in all respects including packaging or they don’t make it to the shelf.

2) One factor I rarely here discussed is also that some of the value of a private label product is imputed from the retailer who is selling it. If a retailer scores low in key attributes its PL products inherit a lower value and cannot command the same price as an identical product in a better scoring retailer.

3) Price gap between brand and PL is important but not critical. There is a range of acceptability. I was involved in major study which verified this. Sponsored by branded manufacturer. As results demonstrated brand vulnerability not widely known.

Moreover, many PL branded items carry a 100%+ satisfaction guarantee, not only allowing for a refund, but also providing the name-brand item as a direct replacement. True, most would not take advantage of this, but I digress…

Within the context of Mr. Senhouse’s column I did not seem to find a discussion about the manufacturing process relative to Private Label goods. I did appreciate his comments, research and observations of the pricing techniques, evolution and market share of PL’s, and the market impact on branded products. However, at least from my personal experience, in many instances the two products tend to be very tightly connected for reasons below.

Prior experience with PL goods was an excellent way to improve profit margins and steal market share from competitors (who were selling branded only goods). The ability to improve margins was based upon the fact we obtained the PL at a substantial cost savings versus the brand product. In my experience, the trick was the brand name manufacturer was also the manufacturer of the PL (or their product was manufactured at a contracted packager who had license authority to private label the branded product with margin rebate to the brand); hence a novel way for them to improve market share (discretely) while improving manufacturing efficiencies. By my selling their (my) PL, I helped them keep their competitors (yes their competitors) at bay (less shelf space), while simultaneously improving my profit margin through the lower cost per unit. It was a win-win of sorts.

All that said the PL manufactured goods were never “full quality” of the branded product. They were nearly as efficacious, but still not 100% compatible. Hence this minor quality differential allowed the manufacturer to price lower while still maintaining their brand integrity. The end user was satisfied with the quality based upon the price savings.

Thank you again to this month’s author and the Simon School for the Pricing Connection. Like I have said in a prior post, pricing is part science, part art. In this case, it’s also part “don’t judge a book by it cover as it could be the same book”.