BRANDING DECISIONS Manufacturer Brands : ( National brands ) These are products designed, produced, and marketed by a vendor. They develop the merchandise and establish an image for the Brand. e.g. - Kellog’s, P&G, Colgate Palmolive etc. Some stores organize their categories around these important brands. ( e.g. - Raymonds, Lakme, Bata, Adidas etc. ) This may help in improve store image, traffic flow, and selling promotional expenses. They give relatively less gross margin. If the manufacturer brands are easily available from many retailers, they can’t differentiate from competition. The strong manufacturer's brand restrict how the retailers do the pricing, advertisement and display.

BRANDING DECISIONS PRIVATE LABEL BRANDS : ( STORE BRANDS ) These are the products developed and marketed by a retailer. The retail buyers or category managers develop specifications for the merchandise and then contract with a vendor to manufacture it. The retailer is responsible for promoting the brand. The retailers’ brands are still not very popular in India as it is very difficult to gain the economies of scale in design and production. The manufacturers brands advertise heavily creating strong consumer loyalty and the retailers’ brands find it difficult to compete against manufacturer brands. Gap, Marks & Spencers sell their own labels exclusively. Some retailers sell their own brand along with the other successful brands ( Wal-Mart, Kmart )

BRANDING DECISIONS Good store branding boosts store loyalty. The store image gets enhanced if the brands are high quality and fashionable No manufacturers’ restrictions More direct control over manufacturing, quality, and distribution. Higher gross margin. Bargain Branding : This targets the price sensitive segment by offering generic or house brands ( unbranded, unadvertised merchandise ) such as drugs, grocery etc. at a discount price. Copycat Branding : These imitate the manufacturer brands in appearance and trade dress, generally perceived as lower quality and is offered at lower price. The close copies have risk of violating trade and patent laws. Poor copies are ineffective.

BRANDING DECISIONS Premium Branding : It offers the consumer a private label at a comparable manufacturer-brand quality, usually with modest price savings. To succeed, the retailer has to invest considerably the resources in market research, product development, quality control and promotion. They tend to be competing with the manufacturers brand. Parallel Branding : They closely imitate the trade dress and product attributes of leading manufacturer brands with a clearly articulated “invitation to compare”. Parallel brands attempt to produce a product so similar to the manufacturer brand that the only difference is the price. Manufacturer brand induces store traffic and the parallel brand leverages this traffic into parallel brand.

INTERNATIONAL SOURCING DECISIONS Some products have a high quality reputation just because of country of origin effects. (Swiss watches & chocolates, Japanese Electronics goods, Dutch dairy products, Indian Jewelry, Indonesian furniture, Italian marble, Egyptian cotton) Some countries have reputation for high fashion, some countries have a technological advantage whereas other countries have reputation for low cost. Foreign Currency Fluctuations affect the buying decision to a considerable extent. Import tariffs & duties make huge impact on global buying decisions. Cost of carrying inventory, transportation cost are higher in case of global sourcing. Quality control and delayed shipments create problems in global buying. It becomes difficult to build strategic alliances. Cultural, language and trade practices differ.

VENDOR MANAGEMENT Meeting Vendor : Wholesale Market ,Trade shows, Resident Buying Offices, Own office or store, Internet. Strategic Partnerships With Vendors : If the products are commodities - the relationship will result into win-lose. If the retailer is stronger than the manufacturer, the result is Lose win. Strategic partnership is win-win relationship and is build on trust. Both the partners share goals, take risk, share information and make significant investments for the sake of the relationship. Disintermediation : when a manufacturer or wholesaler competes directly with the retailer. This can be helpful if the product line doesn’t coincide.

ETHICAL AND LEGAL ISSUES IN BUYING Slotting allowances : Fees paid by a vendor for space in retail store. Buybacks : Retailer allows the vendor to create space for its goods by buying back a competitor’s inventory. The second case is that of retailer forcing the vendor to buy back slow moving merchandise. Chargebacks : retailers deduct money from the amount they owe to the vendor because the merchandise is not selling or due to vendors mistakes. Tying Contracts : Strong manufacturers force the retailers to buy different products even if they are not selling along with the items having fast turnover. Commercial Bribery : Not to accept the gift or favor of value which could influence the buyer’s purchasing behaviour.

ETHICAL AND LEGAL ISSUES IN BUYING Counterfeit Merchandise : Goods made or sold without the permission of the owner of a trademark, a copyright, or a patent. Gray market & diverted merchandise : Goods received in the country through abnormal channel are gray market merchandise whereas the goods diverted from one territory to another territory having different pricing is diverted merchandise. Exclusive Territories : No retailers will have overlap of territories and avoid unhealthy competition among the retailers. Exclusive Dealing agreements : The retailer is allowed to carry only one manufacturers brand. Refusals to Deal : Can be for both retailer or manufacturer.