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launched five years ago by the smaller players. As private label first cut into the branded segment, it came at the expense of your client’s main petitor and the smaller players, not your client. In response to this, your client’s main petitor entered into the private label segment two and onehalf years ago. This further hurt their own sales and those of the smaller players, but also began to hurt your client’s sales. Additional information is required to understand what is driving the demand for private label cookies ? How does the quality of a private label cookie pare to that of a branded cookie? Consumer studies have shown that there is a noticeable difference in taste, texture and quality in favor of the branded cookies ? At the manufacturing level, what is the difference in cost of production and price between branded and private label products? It costs approximately $ to manufacture a bag of private label cookies which will sell for $ to retailers. It costs approximately $ to manufacture a bag of branded cookies which will sell for $. ? How do the same numbers translate at the retail level? A retailer, paying $ for private label cookies can sell that product for $. The $ bag of branded cookies can be sold for $. The key finding is that from a costpricemargin perspective it is advantageous for both the manufacturers and the retailers, with all else equal, to sell a bag of branded cookies. Other factors must be contributing to the demand for private label cookies. Think about the incentives at each level in the chain (manufacturer, retailer, consumer). The following questions can help fill in details ? Have any of the manufacturers been able to gain additional shelf space for branded products by supplying grocers with private label products? No ? Has their been excess capacity at your client, its main petitor or the smaller petitors that has been used up through the manufacturing of private label products? There was some excess capacity at the smaller petitors and your client’s main petitor (your client is unsure as to ho