The "battle of the brands" is a very important phenomenon in all consumer goods categories, from food to personal supplies to clothing and even consumer durables. Private labels are found in supermarkets, drugstores, or department stores. They became particularly popular in the early 1980s, at a time when most of the Western world was in a deep recession. Private labels are cheaper brands, which generally offer products of a comparable quality to national brands. Since they became very popular, the entire landscape in consumer goods has changed dramatically. That is why this question - taken from Chapter 9 - is so important.

23.   Which of the following statements regarding the "battle of the brands" is true?

a)    It is pretty well over as the dealers now control the marketplace.
The battle is certainly not over and dealers don't exactly control the marketplace, although their power has increased compared to the manufacturers.

b)    Middlemen have no real advantages in the battle of the brands.
On the contrary, middlemen (retailers mainly) have an advantage, since more brands also means more selection, which is something consumers look for.

c)    If the present trend continues, manufacturers will control all middlemen.
The opposite might be true, although it is unlikely that either manufacturers or middlemen will control the marketplace altogether.

d)    Manufacturer brands may be losing ground to dealer brands.
This is the correct answer: dealer brands have achieved a high level of success with consumers, resulting in less brand loyalty to manufacturers' brands.

e)    The battle of the brands has increased the differences in price between manufacturer brands and dealer brands.
As a preventive strategy, manufacturers were forced to reduce their prices to keep some competitiveness against dealer brands. Therefore, the differences in prices has decreased rather than increased.

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