The fashion word is a small chain operation that specializes in women's apparel and accessories. Ever since they opened their first unit in 2000, their success had been better than anticipated. With each additional store in the organization, that now numbers five, the sales figures kept on improving. At this point in time, however, they noticed a slight dip in sales volume in three of the stores. Since the company is a relatively small operation, they were not equipped with an in house research team to try to determine where the problem lies. The partner S. P. Jain and Mini Seth, decided to employ the service of a marketing research team to uncover the problem. On target, a company that specializes in retail research was their choice. After 3 months of investigation it was determined that the newly opened off price venture, fashion for less, was probably the cause of the problem. Three of their units were in the same trading areas as the "value" merchant's outlets. Close inspection and analysis of their inventories revealed that some of the same lines were being sold, but at lower prices. Marquee labels such as Liz Claiborne, Ralph Lauren, and Calvin Klein were in full supply. Fashion world had the choice to drop the designer collections that caused them unfair competition, but decided that their presence was still Notes 284 needed to round out their merchandise assortments. Without them, many shoppers would probably look to other merchants for these lines. After a great deal of discussion, Jain came to the conclusion that private branding was the answer to their problem. By adding some items that were exclusive to their company, some of the sales volumes that was being lost could be made up with the new merchandise. Shoppers would not be able to find this at any other location in company's trading area, because private branding affords them the luxury of exclusivity. Seth, however, fully aware of the private-brand concept, as he once was the fashion coordinator of a major department store organization, felt that the concept was appropriate only to major merchants. At this point, the two still haven't resolved their problem. 

Questions

1. Does private branding seem to be the answer for the company? Why?

2. How can the location and format affect the sale of private brands