Creating a Deal-Prone Consumer in The Low-Risk Product Categories

The national retail chains operating in the Kingdom of Saudi Arabia market adopt a market strategy that is causing a significant negative impact on both, the national brands¿ performance and the consumer purchase behavior. The strategy of these retail chains is based on two main pillars. The first pillar is the frequent and intense price discounts offered by the national brands sold in their outlets. The second pillar is the rapid expansion in introducing their private label brands across various categories, specifically the low-risk product categories. Nowadays, the retail chains are frequently and heavily promoting the national brands to attract multiple target consumer segments, to generate sales value, sales volume, and to boost the traffic for their outlets. Consequently, the retail chains' negotiation power over the manufacturers has tremendously grown. Therefore, the surge of the private label brands and the heavily discounted national brands necessitate a new strategy paradigm for the manufacturers to counter-attack this threat, especially that numerous national brands are, nowadays, losing their loyal consumer base because they became deal-prone consumers.