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House Brand: Why Purchasing Them Equates To Feeding The Monster

1408 words - 6 pages

Over the last few months of rising prices occurring worldwide and more importantly for the readers; in Singapore, the men in white have been churning out 'explanations' as to how they are attempting to keep the prices for the average consumer at tolerable levels or rather, levels at which they perceive to be tolerable. They have rejected the notion of subsidies as 'unsustainable' and would 'put people on welfare mentality' which would result in higher taxes from the masses to sustain such a programme despite having the country's huge reserves pointed out to them. Likewise, they have rejected calls to raise salaries to similarly enable the average consumer to afford his previous standard of ...view middle of the document...

It is striking to glance over the chilled shelves filled with chilled poultry in NTUC Fairprice and to find them filled with Pasar labeled plastic bags.I wish to highlight the negative trend of such consumption patterns and hope that consumers will keep them in mind during trips to the supermarket.Firstly, a brief background on the nature of house brands which the reader might not be aware of - House brands are usually and in the case of Singapore's supermarkets almost exclusively not manufactured by the supermarket at all. The supermarket acts as a retailer and not a manufacturer. It sources for manufacturers of more commonly consumed products such as pepper powder, rice grains, bread, Milk ...etc. Do note the simplicity of the manufacturing of such items and the lack of relatively more complex consumables which arrive in a package with the supermarket's label on it. Such searches result in any interested manufacturer quoting their prices to the supermarket chain and a comparison being performed to determine the wining quote. The supermarket chain assuredly has a large number of offers due to its wide reach and ability to sell products on a massive scale unlike 'mom and pop' shops. The supermarket will more often then not choose the cheapest offer to be their house brand and the contract with the manufacturer usually has the manufacturer doing all the work including the packaging before shipping it to the supermarket's warehouse and subsequently landing on their shelves.The question, 'Why is it possible for the manufacturer sell their goods at a lower price to a supermarket chain?' could be asked. The reasons are simple. Bulk and lower quality.This brings us to a hypothetical problem – that of house brands competing against 'branded' items. The problem lies in the way these house brands are sold. This is accomplished by placing the house brand items on the shelves beside those of 'branded' items. In a possible situation, consumer comparing a house brand bottle of pepper and a 'branded' bottle of pepper may perceive that the contents are identical. After all, both bottles may state its contents to be '50% pepper'. However, the factor of quality is not so readily apparent. The pepper seeds could have come from a different source, have been processed differently and have a different brand reputation (or lack thereof) to live up to. Terms on the items such 50% pepper are difficult to verify as the other 50% is ground rice; Thai fragrant rice covers a huge quality spectrum.Such consumer behaviour will cause a concern especially to smaller manufacturers of such relatively simple goods which could happen to be local SMEs with small scale factory units. They might attempt to compete with house brands on the factor of price but it would be quite impossible to do so. The supermarket sells both their house brand and 'branded' ones and any attempt to undercut the...

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