Candidate of Economic Sciences, Associate Professor, Associate Professor of the Department of Marketing, Kyiv National Economic University named after V. Hetman (Kyiv, Ukraine)
The aim of the article. The aim of the article is to identify prospects of sustainable development strategy implementation through private label development. Further retailers’ steps on the promotion of sustainable development ideas among the participants of the value creation network and the end-users through private labels are offered.
The results of the analysis. Private labels are becoming more and more popular in Ukraine. A buyer is more likely to spend his / her money on private labels for consumer products and household chemicals. Private labels can also be found in stores of consumer electronics. On a global scale, there are examples of retailers with the share of private brands reaching up to 100%. National retail networks are gradually increasing sales of goods under private labels. The share of private labels in the domestic retail sales is 5%, and is showing significant growth rates.
Private labels allow retailers to tighten control over producer, draw customer attention by lower prices and generate higher revenue due to the low costs of products which are sold under a private label. The social advantages of a private label should also be considered. Lately, more and more attention is paid to environmental pollution and negative effects on human beings. This problem could be solved with the help of private labels through regulation and education of value chain participants and customers. Analysis of the top global retailers’ best practices on implementing the principles of sustainable development allowed to reveal the following activities: charity, energy efficiency, renewable energy, optimization of water consumption, emissions regulation, naturalness and quality management, staff training, supplier management, old (spoiled) product processing management, cooperation with state authorities.
It revealed several trends, that are common to the retail market:
– major efforts are concentrated on «internal» efficiency. This is accomplished through energy efficiency and staff training, which undoubtedly will increase the efficiency of the network in the long run;
– the vast majority of retailers pay much attention to working with the supplier, monitoring the naturalness and high quality of the product, which is sold through the network.
Conclusions and directions of further researches. Private labels are a major means for spreading sustainable development ideas among customers and manufacturers. Retailers, which are in the chain of value creation, should take initiative to strengthen the stability of the socio-economic environment.
Unfortunately, research has not shown high activity of domestic retailers in sustainability managing across the entire value chain. But the positive experience of foreign retailers can help domestic networks choose the right path and approaches in the development of private labels at the early stage.
The role of domestic retailers in ensuring the sustainability of economic, social and environmental parameters of the human existence environment should be examined more detailed in the future.
Keywords: own trade label, private label, retail network, sustainable development, market research
JEL Classification: M21, M31.
Cite as: Dуma, O. (2015). Prospects for implementation of the sustainable development strategy by domestic retailers through the private labels introduction. Marketing and Management of Innovations, 1, 87-95. https://doi.org/10.21272/mmi.2015.1-07
This work is licensed under a Creative Commons Attribution 4.0 International License
- ATB-market [ATB-market]. atbmarket.com. Retrieved from www.atbmarket.com [in Russian].
- Ashan [Auchan]. auchan.ua. Retrieved from www.auchan.ua [in Ukrainian].
- Billa Ukraina [Billy Ukraine]. billa.ua. Retrieved from www.billa.ua [in Ukrainian].
- Brovchenko, V.A. (2010). Vlasni torhovi marky v rozdribnii torhivli [Private labels in retail]. Ekonomichnyi visnyk NTUU «KPI» – Economic Bulletin of NTU «KPI», 7, 143-148 [in Ukrainian].
- Watsons [Watsons]. watsons.com.ua. Retrieved from www.watsons.com.ua [in Ukrainian].
- Hladchenko, V. (n.d.). Private label: zolotoe dno? [Private label: golden bottom?]. AdVesti. Retrieved from http://www.advesti.ru/publish/brending/label [in Russian].
- Eva [Eva]. eva.dp.ua. Retrieved from www.eva.dp.ua [in Ukrainian].
- Eko-Market [Eko-Market]. eko.com.ua. Retrieved from www.eko.com.ua [in Ukrainian].
- Zabarylo, M. (n.d.). Kliuchevyie tendentsіі razvіtіia formatov roznіtsі v Ukraіne і v Evrope [Key trends of retail formats development in Ukraine and Europe]. GfK Ukraine. gfk.com. Retrieved from: http://www.gfk.com/ua/Documents/Presentations/Zabarilo_FoodMaster2014.pdf [in Russian].
- Kosmo [Kosmo]. kosmo.ua. Retrieved from www.kosmo.ua [in Ukrainian].
- METRO Kesh end Keri Ukraina [METRO Cash & Carry Ukraine]. metro.ua. Retrieved from www.metro.ua [in Ukrainian].
- Nash kraі [Our land]. nashkraj.ua. Retrieved from www.nashkraj.ua [in Russian].
- Rynok rozdribnoi torhivli Ukrainy za 2012 rik [Ukrainian Retail market in 2012]. Credit Rating. credit-rating.ua. Retrieved from http://www.credit-rating.ua/img/st_img/AS/2013/29.04.2013/Roznica_ 2012.pdf [in Ukrainian].
- Riteil Hrup [Retail Group]. kishenya.com.ua. Retrieved from www.kishenya.com.ua. [in Ukrainian]
- Saprykina, L.M. (2012). Vprovadzhennia vlasnoi torhovoi marky – perspektyvnyi napriam rozvytku torhivli [The introduction of private label as a promising trend in trade]. Sbornik nauchnykh trudov SWorld. Materialy mezhdunarodnoi nauchno-praktycheskoi konferentsii «Perspektivnyie innovatsii v nauke, obrazovanii, proizvodstve i transporte ‘2012», Vol 2/22. Retrieved from http://www.sworld.com.ua/konfer27/784.pdf [in Ukrainian].
- Smilianets, V.V. (2011). Tekhnolohii formuvannia vlasnoi torhovelnoi marky [Technology of private label development]. Marketynh v Ukraini – Marketing in Ukraine, 3 (67), 41-46 [in Ukrainian].
- Sobstvennaia torhovaia marka [Private label]. Wikipedia. wikipedia.org. Retrieved from https://ru.wikipedia.org/wiki/Sobstvennaia_torhovaia_marka [in Russian].
- STM v Evrope і Ukraіne [PL (private label) in Europe and Ukraine]. Nielsen Ukraine. nielsen.com. Retrieved from nielsen.com [in Russian].
- Torhovelna marka Bravis – u triitsi lideriv z prodazhu televizoriv [Trade mark Bravis in the top three of TV sales]. Unian. unian.ua. Retrieved from: http://www.unian.ua/common/1018869-torgovelna-marka-bravis-u-triytsi-lideriv-z-prodaju-televizoriv.html [in Ukrainian].
- Firsova, S.H. (2013). Marketynhove zabezpechennia vyvedennia vlasnykh torhovykh marok u ryteili [Marketing of private labels]. Visnyk Kyivskoho nats. universytetu im. Tarasa Shevchenka – Bulletin of Kiev nat. Taras Shevchenko University, Vol. 144, 54-57 [in Ukrainian].
- Fozzi Grup [Fozzi Group]. fozzy.ua. Retrieved from www.fozzy.ua [in Ukrainian].
- Furshet [Furshet]. furshet.ua. Retrieved from: www.furshet.ua [in Ukrainian].
- Shevchenko, O.L. (2014). Vlasni torhovelni marky proty brendiv: rozvytok, tendentsii, perspektyvy [Private labels vs. brands: development, trends and prospects]. Molodyi vchenyi – Young Scientist, Vol. 8 (11), 56-60 [in Ukrainian].
- Private Label v trende. Obzor rynka STM v stranakh SNH – Rossіі, Ukraіne, Belarusі [Private Label in trend. Review of PL market in CIS countries – Russia, Ukraine, Belarus]. PrivateLabel. privatelabel-tm.com. Retrieved from http://www.privatelabel-tm.com/articles/247 [in Russian].
- Private Label: Kuda napravіt usіlіia? [Private Label: where to direct efforts?]. Advanter Group. advanter.ua. Retrieved from http://www.advanter.ua/AD-PL-2010.pdf [in Russian].