Private label’s strategies

: competitiveness of brand Continente

Abstract

The main objectives of this thesis were to better understand the retailing market in Portugal, focusing on the specific case of Sonae’s Continente and their Private Label program, in order to assess its competitiveness. For that, it was needed to understand how the market was structured, who were the major players, what drove the consumers to purchase private label products and which were the pricing strategies adopted by the largest companies. Through this study, it was possible to find out that Sonae’s Continente and Jerónimo Martins’ Pingo Doce were the main retailers operating in Portugal and their actions had a clear impact in the rest of the competitors’ behavior and profits. Regarding the Private Labels, it was possible to verify that the brand Continente has been gaining and increasing importance at Sonae retailing over the past years, reinforced by the financial and economic downturn that led consumers to purchase cheaper products. When compared to its competitors and with Pingo Doce in particular, Continente distinguish themselves for having a segmented PL program with three different brands within the Continente name: Continente, Continente Seleção and Continente É. In order to fully understand the rivalry dynamic in the Portuguese market and the positioning of Sonae, there were studied the 4 variables of the marketing-mix, with special focus on the Pricing Model. The competition between the retailers relies essentially on the pricing. Thus, the price war started by Pingo Doce in May 2012 led to a general promotional era, in which all the retailers have regular promotional campaigns and significant price cuts. It was concluded that Continente acts as a price-taker, following the price changes, promotions and discounts made by Pingo Doce. Nevertheless, Sonae is still a major reference on the Portuguese retail and the Private Label Continente is growing at a pace that allowed Sonae to invest in its internationalization, through the expansion of the brand to foreign markets.

Date of Award	2014
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Pedro Celeste (Supervisor)