QUESTION 1

Private label products sell in supermarket typically for about 10 to 20 percent less than national brands, yet the profits margins realized by supermarkets are usually about 10 to 15 percent higher than for national brands- so supermarkets like private- brands. But in recent years there has been a tendency for supermarkets to upgrade their private brands to compete more directly with high-price premium national brands on quality. Several supermarkets, for example, have developed their own version of the Dove super-premium ice cream bar. Some observers believe that such trading -up of private-label products will undermine their appeal.

Do you agree or disagree? Briefly explain 5 reasons why.