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Disclosing dual manufacturers on private brands: Does it change quality and image perception between national and private label brands?
Agribusiness
Abstract
Dual manufacturers produce both their own brands and private label brands (PLs). Disclosing these manufacturers on PL packaging might exert quality and brand image effects, which could influence the perception differentials between national brands (NBs) and PLs. An experiment identifies moderating effects for these differentials, according to the NB image positioning (high and low) and the type of PL (standard and premium). For example, compared to the case when a low‐image NB manufacturer is disclosed as the supplier of a standard PL, which is our reference, we propose a decrease in the quality and brand image differentials when: (1) the high‐image NB supplies a standard PL, or (2) a low‐image NB manufacturer is disclosed as the supplier of a premium PL. Whereas we will not expect any change when a high‐image NB manufacturer is disclosed as the supplier of a premium PL. Our results partially support our expectations. [EconLit Citations: M21, M31, Q13].
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Retailers increasingly utilize private label branding strategy in an effort to simultaneously increase store loyalty and compete with national brands (Ailawadi and Keller 2004; Nies and Natter 2012). Previous research suggests consumers are not only receptive to the notion of private label consumption but in many cases prefer retailer brands over their premium brand competitors (Neilsen 2011; Thomassen et al. 2006). From a supply perspective, many national brand manufacturers, or “dual branders” (ter Braak et al. 2013: 87), produce private label brands to optimize outcomes from the channel relationship (Chen et al. 2010; Kumar et al. 2010). Dual branders do not volunteer this information to prevent loss of the national brand market share due to narrowing gaps between quality perceptions of premiums and private labels (Sethuraman and Raju 2012; Steenkamp et al. 2010). Consequently, consumers are often only able to rely on superficial signals (e.g., packaging or price) to evaluate the origins and quality of private-label products. However, consumers can be inadvertently exposed to dual branding knowledge through other communications such as a manufacturer’s announced product recall or word-of-mouth from others. Thus it is important for marketing researchers to understand how consumers react to the knowledge that two differently priced, competing brands are sourced by the same manufacturer. In response, this research examines the influence of dual branding on customers’ respective brand evaluations through the mechanism of their comparative quality perceptions. Results of the analyses suggest that exposure to dual branding does influence consumers’ comparative quality perceptions between competing private and premium brands, which in turn significantly impacts respective brand evaluations. Specifically, comparative quality perceptions facilitate the indirect effects of dual branding information, which positively (negatively) influences private (national) label evaluations.
In today’s highly competitive consumer marketplace, developing and managing successful private label offerings has become a priority for many retailing companies.This study aims to analyze product, retailer, and individual factors from the private label brand that influence consumers’ loyalty and purchase intention; along with the influence of the manufacturer identification on the product package on purchase intention.
A structural equation model is run on a sample of 362 consumers, and a multi-group comparison is developed to study the role of manufacturer identification.
Findings indicate that the influence of private label image and perceived quality on purchase intention are partially mediated by loyalty and moderated by manufacturer identification. Results also reveal that store image and corporate reputation enhance private label image and perceived quality.
This study provides useful insights to advance the understanding of private label branding and guidance to retailers who should consider store image and company reputation when designing branding strategies
Purpose
Previous research demonstrates the importance of product category fit in evaluating brand alliances. However, many factors determine fit between alliance partners. For example, conclusions from brand extension research suggest that the evaluation is a question not only of product category fit, but also of brand concept consistency. Therefore, this study introduces brand concept consistency in research on brand alliances.
Design/methodology/approach
The paper builds on the categorization and incongruence literature. An experiment was employed to test the two hypotheses in the study.
Findings
The results indicate that both product category fit and brand concept consistency influence consumers' evaluations. However, the results also show that product category fit is important in only functional and mixed‐brand concept‐based alliances. For expressive brand alliances, product category fit is not important in evaluating the alliance.
Practical implications
Managers should take care in finding potential alliance partners who have brands that in some way, either on the product category level or in brand concept, fit well with their company's brands. However, managers of a functional brand should find a partner whose brand has high product category fit, since low‐fit partners presumably will hurt the potential alliance.
Originality/value
The paper demonstrates that brand concept consistency, not only product category fit, is an important variable in consumer evaluations of brand alliances.
El extraordinario desarrollo de la marca de distribuidor ha venido acompañado por una mayor sofisticación de las estrategias de cartera de marca de distribuidor, siendo habitual ofertar distintas propuestas de valor en el eje calidad-precio. Además resulta común plantear estas propuestas como extensiones de la marca de distribuidor estándar. Este trabajo analiza en qué medida la introducción de una versión económica o una versión mejorada afecta la percepción de calidad de la marca estándar y de la marca extendida. Los resultados encontrados evidencian que esta extensión de la cartera de marcas de distribuidor tiene un efecto neto positivo en la percepción de la marca.
A recent trend characterizing the retail industry is the rapid growth of store brands; many retailers now manage a store brand portfolio that incorporates multiple value propositions, such as a generic, a standard, and a premium brand. Yet current literature has not investigated whether the motivations and benefits sought differ among consumers of national brands and those of different types of store brand. This study analyses the shopping expenditures and motivational characteristics of customers of two major chains in the Spanish retail industry. The positioning of store brands moderates the benefits sought by store brand shoppers, such that each brand attracts different customer segments. Moreover, the overlap between these segments tends to be lower than their overlap with segments of national brand buyers. Therefore, any reference to store brands as a whole appears overly simplistic; an adequately selected portfolio of store brands instead may help retailers steal purchases from national brands, without cannibalizing their own brands' sales.
This article empirically studies consumer choice behavior with respect to store brands in the United States, the United Kingdom, and Spain. Store-brand market shares differ by country and are usually much higher in Europe than in the United States. The authors study the notion that the differential success of store brands in the United States and Europe is the higher brand equity that store brands command in Europe than in the United States. They use a framework based on consumer brand choice under uncertainty and brands as signals of product positions to conduct their analysis. More specifically, they examine whether uncertainty about quality (or the positioning of the brand in the product space); perceived quality of store brands versus national brands; consistency in store-brand offerings over time; and consumer attitudes toward risk, quality, and price underlie the differential success of store brands at least partially in the United States and Europe. The authors' model is estimated on scanner-panel data on laundry detergent in the U.S., U.K., and Spanish markets and on toilet paper and margarine data in the U.S. and Spanish markets. The authors find that consumer learning and perceived risk (and associated brand equity), as well as consumer attitude toward risk, quality, and price, play an important role in consumers' store-brand and national-brand choices and contribute to the differences in relative success of store brands across the countries studied.
The objective of this article is to determine whether national brand promotions and store brands attract the same value-conscious consumers, which would aggravate channel conflict between manufacturers and retailers. The authors identify psychographic and demographic traits that potentially drive usage of store brands and national brand promotions. They then develop a framework and structural equation model to study the association of these traits with store brand and national brand promotion usage. The authors find that though demographics do not influence these behaviors directly, they have significant associations with psychographic characteristics and therefore are useful for market targeting. Most important, usage of store brands and usage of promotions, particularly out-of-store promotions, are associated with different psychographics. Store brand use correlates mainly with traits related to economic benefits and costs, whereas the use of out-of-store promotions is associated mainly with traits related to hedonic benefits and costs. These differences result in four well-defined and identifiable consumer segments: deal-focused consumers, store brand-focused consumers, deal and store brand users (use-all), and nonusers of both store brands and deals (use-none). Therefore, manufacturers and retailers have the opportunity to either avoid each other or compete head to head, depending on which segment they target.
Purpose
The purpose of this paper is to develop a comprehensive model of high‐level sponsorship effects that works well in both sports and cultural sponsorship contexts.
Design/methodology/approach
The sponsorship model is tested using survey data from target market representative samples in two professional sports contexts and two cultural contexts.
Findings
The model works almost equally well in both contexts. Furthermore, a more parsimonious mediated effects model provides virtually the same results as the full model. Improving attitude towards the sponsorship and object equity are found to be the most important factors for improving sponsor equity. The model also confirms earlier research on the importance of sponsor sincerity and sponsor‐object fit in determining sponsorship effects.
Research limitations/implications
The explained variance of the sincerity and object equity constructs was not as high as for other constructs in the model.
Practical implications
Sponsorship managers should pre‐test potential objects and sponsorship communications to make sure that constructs in the model such as fit, sincerity, sponsorship attitudes, and object equity are maximised to provide optimal sponsor equity.
Originality/value
The model combines constructs from various literatures into a comprehensive model of high‐level sponsorship effects. Furthermore, while most previous sponsorship research has used convenience samples and/or fictional and/or single sponsorship contexts, the comprehensive model tested here is shown to have high external validity by its consistently good performance in predicting sponsorship effects using four real sponsorships and representative samples.
The authors examine the growing and pervasive phenomenon of brand alliances as they affect consumers' brand attitudes. The results of the main study (n = 350) and two replication studies (n = 150, n = 210) together demonstrate that (1) consumer attitudes toward the brand alliance influence subsequent impressions of each partner's brand (i.e., "spillover" effects), (2) brand familiarity moderates the strength of relations between constructs in a manner consistent with information integration and attitude accessibility theories, and (3) each partner brand is not necessarily affected equally by its participation in a particular alliance. These results represent a first, necessary step in understanding why and how a brand could be affected by "the company it keeps" in its brand alliance relationships.
Purpose – The paper seeks to examine empirically the potential dilution and enhancement of brands that share product platforms with other brands. Design/methodology/approach – Study 1 uses two real platform-sharing examples from the automobile and consumer electronics industries in an experimental setting. Study 2 uses conjoint analysis in the same two industries to study the impact of platform-sharing on preference and willingness to pay for a unique brand. Findings – Study 1 finds that sharing a platform with an upscale brand is preferable to sharing with a downscale brand, although results are mixed on whether a unique-to-brand platform is preferred to sharing with an upscale brand. Study 2 finds that unique-to-brand platforms are preferred to any type of platform sharing, and calculates that this preference is worth about 6-10 per cent of the product's retail price. Research limitations/implications – Both studies use student samples, although all product classes and brands tested are popular with this demographic, which is a key target market for the tested industries. Practical implications – Platform sharing is an increasingly popular product development strategy that offers great cost savings in product design, manufacturing and servicing. The findings suggest that managers also need to carefully consider the potential cost to a brand's equity when calculating the financial implications of platform sharing. Originality/value – This paper brings together two areas that are usually not studied together, i.e. product development and brand equity management, and finds that choices made in the former can have important implications for the latter.
Assesses the evolution of retail brands within British grocery retailing over the past 25 years. Highlights key issues in defining retail brands which contribute to our understanding of their role and impact upon company strategy, and then explores how British retailers have managed the evolution of these product ranges. Identifies key factors as the changing basis and use of retail power in the distribution channel, the centralisation of management activities, and the appreciation of what constitutes retail image. Argues that British grocery retailers have successfully managed these factors to create a retail brand which is now regarded by customers as being at least equal to, if not better than, the established manufacturer brands.
Purpose
The purpose of this paper is to examine empirically the brand impact of consumer knowledge regarding a common supplier and shared product specifications between manufacturer and private label brands.
Design/methodology/approach
The study uses three fast‐moving consumer goods in an experimental setting.
Findings
The study finds that knowledge about common sourcing and shared specification decreases perceptual gaps between private labels and manufacturer brands and improves attitudes towards the retailer.
Research limitations/implications
The study uses a student sample, although all product categories and brands tested are popular with this demographic, and they are a key target market for the tested industries.
Practical implications
Manufacturer brands that supply private labels need to make sure that this information does not reach consumers and/or ensure their own brand version remains superior to the private label. Retailers that use well‐known manufacturer brands as suppliers of their high‐quality private labels might wish to share this information with customers as a means of improving attitudes towards the private label and retailer brands.
Originality/value
This paper builds on earlier platform sharing research and shows the dangers and opportunities of sharing product specification across brands with differing reputations and prices.
Evidence from past research and insights from an exploratory investigation are combined in a conceptual model that defines and relates price, perceived quality, and perceived value. Propositions about the concepts and their relationships are presented, then supported with evidence from the literature. Discussion centers on directions for research and implications for managing price, quality, and value.
The current research considers dual branding, where national brand manufacturers produce store brands against which they compete. Although agreements are confidential, rumors about the practice emerge. Thus, the authors examine the influence of dual branding rumor exposure on consumers’ respective national and store brand evaluations. The results support positive (negative) serial indirect effects of rumor exposure on participants’ store (national) brand evaluations through dual branding beliefs and comparative quality perceptions. In addition, smart shopper perceptions amplify the indirect effects of dual branding rumor exposure on store, but not national, brand outcomes.
Standard private labels (PLs) have been the topic of multiple prior reviews. Having been leapfrogged by business practice, the marketing literature has only recently witnessed a surge in interest in multi-tier PL offerings. These typically include a budget and/or premium tier in addition to the omnipresent standard PL tier. This study offers a systematic review of recent empirical findings on budget and premium PLs. Our review is structured along the following four research questions: (i) why do retailers introduce budget and premium PLs, (ii) who buys budget and premium PLs, (iii) what is the nature of the competition among the different tiers and with national brands, and (iv) what are the budget and premium PL tiers’ respective success drivers? While standard PLs still generate the largest volume sales, premium PLs (which are not only characterized by a higher dollar margin but which are also most beneficial to the retailer's image) are currently driving PL growth. Budget PLs, in contrast, are hardly growing in volume share, have a lower absolute and percentage margin, and are found to be less effective in fighting discounters than initially thought. We identify some commonalities across the different tiers but also report on many differences. Various avenues for future research are presented.
Purpose
This research paper aims to understand which factors influence the purchase of private label food products, by measuring the importance of 14 variables for purchasing frequency.
Design/methodology/approach
Data were collected through questionnaires to a sample of consumers. They have been analysed according to the extra tree classifier methodology, which allows providing a more reliable classification – compared to previous studies – of factors affecting consumers' choices of private label products.
Findings
Results show that consumers' choices related to private label food products are influenced by groups of heterogeneous variables related to their perception on products, satisfaction of post-consumption, store's role and trust built over time by retailers.
Research limitations/implications
Data have been collected through an online survey, which could generate the bias of self-selection; the sampling method is non-probabilistic.
Practical implications
The study provides useful indications on the role of private labels in retailer management policies and on marketing competences and skills that are necessary for managing retailers' assortments.
Originality/value
The existing literature lacks clarity on the factors that influence the frequency of purchasing private label food products. By considering a higher number of variables than previous studies, it has been possible to classify and measure the importance of each variable included in the analysis framework adopted, also in case of correlation between variables.
The authors examine the relative importance of extrinsic versus intrinsic cues in determining perceptions of store brand quality in an experiment using a sample of 1564 shoppers for five products. Results of the experiment suggest that consumers’ evaluations of store brand grocery items are driven primarily by the extrinsic cues that these products display rather than intrinsic characteristics. In addition, the authors found that a value for money orientation taken by retailers in the marketing of their private label lines may represent a suboptimal strategy; they recommend a quality orientation.
The trend of introducing organic private label (OPL) products aim to attract health-conscious, environmentally concerned consumers and create store loyalty. Within this context, this present study sheds insights on how store image (SI), perceived quality (PQ), trust in OPL, and perceived value (PV) influence consumers’ purchase intentions (PI) towards OPL food products. Empirical data were collected from consumers with self-administered questionnaires in Istanbul, Turkey. The suggested hypotheses were tested utilizing structural equation modeling. The findings of this research reported that SI has a positive impact on PQ and trust in OPL. It was also revealed that PQ, trust in OPL contributes to perceived value. In addition, both PV, trust in OPL and PV was found to have a positive influence on consumers’ PI. Moreover, the empirical findings also supported that the impact of PQ and trust in OPL on PI is partially mediated by PV. Some implications are also presented at the end of the study.
Purpose
The buying process is affected by many aspects, in which consumer’s age is certainly an important feature to be considered. The purpose of this paper is to evaluate the influence of packaging and labeling of Requeijão cheese on the purchasing behavior of different age groups of consumers in order to obtain marketing information that aid in increasing sales of Requeijão cheese.
Design/methodology/approach
Three focus groups were created, each one composed of ten participants. The first group was aged 18-30 years old, the second group included people aged 31-50, and the third group participants were aged between 51 and 70 years old. Requeijão cheese labeling and packaging was presented to all groups to facilitate a discussion. A moderator asked participants in the three groups about the factors on the packaging and labeling of Requeijão cheese that influence their desire to purchase. Seven final themes were analyzed by thematic analysis: packaging, color and images on label, information, lid, price and brand.
Findings
The factors of greatest importance that influenced purchasing for the first and second group were glass packaging and color labels. Groups 2 and 3 preferred a packaging size of 250 g, an aluminum cap protected with a plastic cap, information, and affordable prices. Group 1 demonstrated high interest in 220 g packaging, metal lid and brands. Group 3 preferred plastic packaging. All groups were attracted by images on labels related to the product origin. The results from this study may be advantageous for creating marketing strategies to increase sales of Requeijão cheese and similar milk products that are sold in comparable ways.
Practical implications
Concept and attitudes toward packaging and labeling have changed in modern times. The present study demonstrates how consumers of different age groups have divergent opinions about packaging and labeling of Requeijão cheese, factors that have huge influences in the purchasing of this product. The results from this study will aid in creating marketing strategies to increase sales of Requeijão cheese and similar milk products that are sold in similar conditions. The findings will also assist manufactures in creating bonds with costumers once packaging and labeling might be produced in accordance with the preference of each age group of consumers, and consequently makes the visual aspects of packaging more attractive to them.
Originality/value
This study collected information about the most features in packaging and labeling of Requeijão cheese that attract consumers in the food buying process. There are many companies that sell Requeijão cheese. Then, it is necessary to understand the needs of consumers in relation to packaging and labeling of similar products, to make it more competitive in the market and to meet the expectations of consumers in order to create bond with them.
Grocery retailers rank store brands as the most important factor that differentiates them from their competitors. Retailer competition should have a stronger impact on the more substitutable national brands than the more differentiated store brands. However, the literature has not studied the impacts empirically. In this paper, I quantify the different impacts of retailer competition on national brands and store brands using the scanner data of a U.S. chain retailer. I estimate a structural demand and supply model that incorporates the differentiation effect and retailer competition. The results show that national brand consumers are more likely to switch stores than store brands consumers. By analyzing two counterfactual cases, I find that 1) if the retailer did not sell store brands, its profit would decrease, and the loss would be greater in markets with more competitors; and 2) if the retailer competition had increased, then the national brands' retail prices would decrease more than the store brands' prices.
Private label brands are often seen as inferior to national brands across different dimensions such as quality, reliability, and prestige. They are seen as riskier choice in comparison to national brands. The contract manufacturing practice, however, may help to close the gap. Contract manufacturing practice is performed by national brand manufacturers, who use their expertise and excess capacity to produce products for private label brands. While this practice has been kept in the shadow, exposure of this information has been highlighted recently. Through a series of study, we aim to examine how exposure to such information would change consumers’ perception and behavioral intention toward the private label brand and national brand. We also aim to see if product type moderates the effect. Three experimental studies confirmed that being exposed to such information makes consumers attach higher perceived quality, lower perceived risk, and higher purchase intention toward private label brand, only when the product is a high risk product. At the same time, however, consumers express less favorable attitudes toward the national brand; but stay reluctant to switch to a private label brand, especially in the case of high risk products.
Research has recognized that the price of an experience good is not only determined by firm and collective reputation, which act as proxies of firm product quality, but also by the firm's advertising investment. This study examines whether pricing these goods as a function of firm advertising investment and firm reputation depends on a collective, versus noncollective, brand strategy. The central assumption of this article is that a collective brand can increase perceived differentiation among the individual brands associated with it, and thus, that collective brand membership can moderate the effects of firm advertising investment and firm reputation on product price. The results obtained from a panel of companies in an experience-goods industry (i.e., wineries) between 1999 and 2013 show that the relative effect of collective brand membership on product price is higher when the company has higher advertising investment and a higher reputation. [EconLit citations:Q11, Q13, M37]
In recent years, premium private labels for fresh produce grown with reduced use of synthetic pesticides and chemical fertilizers have been developed by Japanese general merchandise stores. In this paper, the brand equity factors that affect willingness to pay (WTP) for private label vegetables are identified using the contingent valuation method. We consider four key dimensions of brand equity, namely brand awareness, brand loyalty, perceived quality, and brand associations. We find that brand loyalty factors based on the psychology of consumers who seek value-added vegetables with health and safety characteristics have the largest effect on the WTP premium. Providing shoppers with clear information about the key product attributes of reduced use of synthetic pesticides and chemical fertilizers is particularly important to generate brand equity for private label vegetables. [EconLit citations: Q130, M310].
We give an overview of the most important decisions to be taken when planning and conducting experimental advertising research. Based on previous research and state-of-the-art academic insights, we discuss good methodological practices with respect to fleshing out the contribution of a study, developing and testing experimental stimuli, selecting appropriate samples, collecting data, designing questionnaires, deciding which variables and measures to include, and determining scale measurement. This set of guidelines should enable experimental advertising researchers to optimize their study designs and to carry them out in a correct way.
The authors study the drivers and performance implications of retailers' branding strategies for their premium and economy private-label tiers. Retailers can opt for store-banner branding and use their store-banner name and/or logo to reveal their ownership, or they can use stand-alone branding and avoid an explicit link between store brand and retail banner. Hypotheses are tested on a large pan-European sample of premium and economy tiers that were introduced over almost 15 years. For the premium tier, retailers' propensity to use store-banner branding is higher when they have a hi-lo price format and a higher brand equity, and when they have used store-banner branding in the past (on their standard tier and in other markets). The attractiveness of using store-banner branding for the premium tier also varies across countries: it is more likely to be chosen when the retail environment is less concentrated, when uncertainty avoidance and rule of law are higher, and when power distance is lower. For most of these drivers, the effect is significantly weaker for the economy tier. Retailers whose premium-tier branding decision is congruent with the proposed contingency framework perform better. For the economy tier, congruence is not associated with higher performance.
Worldwide premium private labels (PPLs) are a new and rapidly growing phenomenon. However to date, little is known about consumers' perceptions of these newer entrants relative to other brand types. Therefore it is difficult for marketers to understand the opportunities and threats created by this new generation of brands. This study examines the ways in which consumers categorise PPLs compared to more traditional value private labels (VPLs) and national brands (NBs) on the three dimensions of quality, value for money and trust. The data includes seven packaged goods categories in three countries, the United States, the United Kingdom, and Australia. The findings show that PPLs sit on a separate island, in between VPLs and NBs in consumer memory. While consumers generally view PPLs as a separate subgroup of brands, PPL are connected to other subgroups in that they are perceived to have the value characteristics of VPLs but quality characteristics of NBs. Finally, consumers with past experience with VPLs have a stronger ability to categorise PLs into distinct brand tiers.
Multitier store brands are increasing in significance in retail outlets. In this article, the authors theoretically examine the rationale for the existence of multitier store brands, their optimal quality levels, and their implications for consumer welfare and channel profits. They show that despite the manufacturer’s efforts to deter the entry of store brands by providing side payments and/or introducing additional national brands, the retailer will offer multitier store brands in equilibrium. Furthermore, the quality levels of store brands and national brands are interlaced, with a store brand taking the top-quality position unless national brands outnumber store brands. Even though the proliferation of store brands reduces product differentiation, it does not decrease consumer welfare or channel profits. However, store brands hurt the manufacturer’s profits and make two-part tariffs ineffective in improving channel coordination. Nonetheless, the retailer can enhance channel coordination by proc...
This article tests how well the information economics view of brand equity explains consumer brand choice in countries that represent different cultural dimensions. In this empirical analysis, the authors use survey and experimental data on orange juice and personal computers collected from respondents in Brazil, Germany, India, Japan, Spain, Turkey, and the United States. The results provide strong empirical evidence across countries for the role of brands as signals of product positions. In addition, the positive effect of brand credibility on choice is greater for consumers who rate high on either collectivism or uncertainty avoidance. Credible brands provide more value to collectivist consumers because such consumers perceive these brands as being of higher quality (i.e., reinforcing group identity). Credible brands provide more value to high-uncertainty-avoidance consumers because such brands have lower perceived risk and information costs.
Purpose
– Establishing and/or developing a portfolio of private label brands (PLBs) is a strategic imperative for most retail chains. The purpose of this paper is to construct, and validate, a holistic conceptual model to investigate the effect of perceived product quality, relative price and risk on perceived product value and, ultimately, willingness to buy these brands. In addition to this, the study seeks to investigate the potential role of store image as an antecedent within the model.
Design/methodology/approach
– A survey of middle to upper income shoppers was administered in order to determine the magnitude of the above-mentioned effects. The study focused on the market segment of private label breakfast cereal consumers within South Africa.
Findings
– All relationships in the model were found to be significant at the 5 per cent level, except for store image on perceived risk. The strongest relationship, by some margin, was that between perceived value and willingness to buy PLBs.
Practical implications
– The myth that a powerful store image can necessarily mitigate high levels of consumer risk was dispelled. In general, the results may be used to glean further insight into the consumer’s approach to buying PLBs and shape brand managers’ actions in building these brands.
Originality/value
– This study draws on the collective works of Beneke et al. (2013), Snoj et al. (2004) and Sweeney et al. (1999) in exploring this issue. However, the research advances the discussion by considering a low-involvement product category and the inclusion of an additional antecedent – store image.
The identification of conditions under which premium or economy private labels are more promising from a consumer perspective is of high managerial relevance. This paper is first to analyze the moderating impact of store-, category-, and private label-characteristics on consumer preferences for premium vs. economy private labels. The results reveal that premium (economy) private labels are more preferred at high-priced (low-priced) retailers and in categories of high (low) brand relevance. However, consumers' believes whether the private label is produced by a well-known manufacturer or the retailer itself do not moderate consumer preferences for premium vs. economy private labels.
The author presents a conceptual model of brand equity from the perspective of the individual consumer. Customer-based brand equity is defined as the differential effect of brand knowledge on consumer response to the marketing of the brand. A brand is said to have positive (negative) customer-based brand equity when consumers react more (less) favorably to an element of the marketing mix for the brand than they do to the same marketing mix element when it is attributed to a fictitiously named or unnamed version of the product or service. Brand knowledge is conceptualized according to an associative network memory model in terms of two components, brand awareness and brand image (i. e., a set of brand associations). Customer-based brand equity occurs when the consumer is familiar with the brand and holds some favorable, strong, and unique brand associations in memory. Issues in building, measuring, and managing customer-based brand equity are discussed, as well as areas for future research.
This paper explores the impact of exposing the name of the manufacturer on a retail brand product upon national brand loyalty, retail brand loyalty and store loyalty, It does so by exploring customer attitudes towards retail brands in South Korea, where there is a legal requirement for retail brands to portray the manufacturer׳s name. For international retailers entering markets where such disclosure is a legal requirement an understanding of the implications of this for retail brand management is essential. The findings suggest that in the Korean case revealing the name of the manufacturer who supplies the retail brand on the product packaging has a positive influence on attitudes towards retail brands, although it did not mitigate the perceived risks held by customers towards retail brand products in general.
Purpose
– The purpose of this study is to explore the effect of store image and perceived price on the consumer’s perception of private label brands (PLBs) that have grown in stature in recent decades and are increasingly viewed as a strategic asset of retailers. In particular, the tenets of perceived quality, loyalty and awareness/associations, are argued to underpin the construct of brand prestige, which is used as a vehicle to assess consumers’ affinity toward the brand.
Design/methodology/approach
– A consumer survey was conducted with a specific focus on purchasers of private label branded breakfast cereal in Cape Town, South Africa. The data from 205 respondents were scrutinized through partial least squares path modeling, which empirically tested the eight hypotheses embedded within the conceptual model.
Findings
– The results suggest that perceived price is a powerful influencer in this process; however, the role of store image was seen to be less obvious. At a granular level, a relationship between store image and perceived quality was found to exist, but not so for loyalty and awareness/associations. In this respect, store image was seen as subordinate to the perceived price of the merchandise, bringing into question the assumed stature of store image as a key decision influencer in an emerging market context.
Research limitations/implications
– This study was confined to a single product category, within a particular retail segment, as the study focused on PLB breakfast cereal products sold within mainstream South African supermarket stores. This was desirable so as not to infuse varying merchandise category profiles into the model. Furthermore, as data were collected exclusively in the city of Cape Town, the results cannot necessarily be extrapolated to South Africa as a nation. Finally, it should be noted that the study was conducted in an emerging market setting. Developed markets, where consumers are considerably more au fait with PLBs and have increased purchasing power, may therefore produce a different set of results. Thus, our findings are not necessarily generalizable to all branches of the retail sector, nor are they necessarily applicable throughout, and across, different countries. It is hoped that subsequent studies will probe these areas and provide comparative viewpoints.
Practical implications
– This study upholds the view that price is a key driver in building PLBs, but interrogates the popular belief that store image automatically adds value in fostering goodwill toward the brand.
Originality/value
– This study is one of the first to investigate the notion of private label prestige (grounded in that of brand equity theory) in an emerging market context. In doing so, the study postulates that the “halo effect” of store image on the comprehensive evaluation of the brand might not be as prominent as maintained in existing literature. The study, therefore, questions the role of store image and perceived price of the merchandise, finding that – in actual fact – these do not fare equally in consumers’ cognitive assessment of the private label merchandise.
When consumers decide where to shop, they take several criteria into account. It is not yet clear whether private label (PL) quality is one of these criteria. It is the intention of this study to shed light on this issue because many retailers have invested heavily into the quality of their PLs. They assume that PLs differentiate a store's assortment and image, which should attract customers to the store. This study examines this assumption by use of a simultaneous equation model that links PL-specific quality evaluations to perceptions of the image of the associated store as well as to the category-specific share of store visits. Empirical results for 10 product categories show that PL quality positively affects store image perception, and influences consumers in the decision of where to shop.
Private labels or store brands have witnessed considerable growth in the last few decades, especially in grocery products. However, market shares of store brand vary considerably across categories, markets, and countries. A natural question of interest to academics and practitioners is what factors influence store brand market shares. Drawing on a utility framework, we develop 21 consumer, manufacturer, retailer, and product-market characteristics that can influence store brand share. We test the empirical generalizability of the effect of these determinants through a meta-analysis of data from 54 individual and aggregate market studies. Twenty of the 21 determinants show significant, empirically generalizable effects. We discuss the key findings, their implications, and directions for future empirical research.
Premium private labels (PLs) are considered one of the hottest trends in grocery retailing. Still, retailers do not feel the need to introduce premium PLs in every category. Generalizing across approximately 150 categories for six retailers from two countries that already carry premium PLs for several years, the authors find that retailers are more likely to introduce premium PLs in categories with a higher industry PL share, and with a more proliferated assortment in terms of standard PLs. However, retailers are also aware of the risk of creating PL fatigue at high levels of standard PL proliferation. Further, premium PLs are more likely to be introduced in categories with more frequent price promotions, a longer interpurchase time, a higher need for variety, and higher functional, but lower social, risk. In addition, retailers consider category growth and the prevailing practice of their country's premium-PL pioneer when deciding in which categories to also introduce a premium PL. Finally, when NBs spend a smaller amount on advertising and NB proliferation is moderate, premium PL introductions are more likely. Importantly, while some of the earlier empirical generalizations on factors conducive to a standard PL entry still hold for a premium PL entry, new variables need to be considered as well, while other insights need to be updated to better reflect the new reality of higher-quality/higher-price premium PL introductions.
Discount stores have a private-label dominated assortment where national brands have only limited shelf access. These limited spots are in high demand by national-brand manufacturers. We examine whether private-label production by leading national-brand manufacturers for two important discounters (one hard and one soft) creates discounter goodwill. We estimate a selection model that is based on a sample of 450 manufacturer-category combinations from two leading discounters (Aldi in Germany and Mercadona in Spain), and we show that private-label production is indeed rewarded: national-brand manufacturers that are involved in such practices have a higher likelihood of procuring shelf presence for their brands. Moreover, while powerful manufacturers are intrinsically more likely to obtain shelf presence with soft discounters, manufacturers with less power can compensate for this by producing private labels. No such dependence on power exists for hard discounters.
However, not all national-brand manufacturers are equally likely to produce private labels for discounters. We find that national-brand manufacturers are less likely to do so when: (a) they experience more sales growth, (b) it is more difficult to produce high-quality products in a specific category, (c) they invest more advertising support into their brands, and (d) they introduce more innovations. Moreover, a higher price differential relative to the discounter's private labels makes national-brand manufacturers less likely to engage in private-label production for hard discounters.
We study the effects of consumer perceptions of four types of corporate social responsibility (CSR) activities on their behavioral loyalty toward retailers. The four activities are environmental friendliness, community support, selling locally produced products, and treating employees fairly. Behavioral loyalty is measured by share-of-wallet (SOW). We control for other retailer attributes that drive attitudes and SOW, and examine how the market is segmented in terms of consumer response. We partition the total effect of CSR on SOW into a direct effect and an indirect effect mediated through attitude towards the store. These effects differ by CSR activity and customer segment. The effects on attitude are positive and positive attitude enhances SOW, so the indirect effects on SOW are positive. While we generally find positive total effects, the total effect of one of the CSR activities, environmental friendliness, is significantly negative for one group of consumers. The magnitude of CSR's total impact on SOW is not only statistically significant but also managerially meaningful in an industry where every share point carries a substantial dollar amount. We characterize the customer segments and conclude with implications for how best a retailer can manage its CSR initiatives.
How can flagships and brand stores contribute to building brands? We inquire about the relationships between store image, brand experience, brand attitude, brand attachment and brand equity using store intercepts. We find that flagships, due to the powerful brand experiences they allow, have a stronger impact on brand attitude, brand attachment and brand equity compared to brand stores. We provide retail marketers with avenues to offer increased in-store brand experiences by appealing to consumers’ emotions, senses, behaviors, and cognition.
Customer experiences play an important role in retail brand management. This research investigates how bodily experiences in retail environments influence customers’ perceptions of retail brand personalities. Based on research on human personality perception, we propose that bodily experiences transfer metaphoric meaning to customers’ brand perceptions. In a field experiment and a lab experiment we manipulated participants’ bodily experiences (feeling of hardness and temperature) and consistently found a metaphor-specific transfer of experiences to retail brand personality perceptions (on the dimensions “ruggedness” and “warmth”). A third study reveals the mechanism behind the effect and demonstrates concept activation elicited by bodily experiences in customers’ minds.
This paper examines the incidence of consumers’ rejection of private labels (PLs) of different price-quality tiers and the underlying reasons for this rejection. The rejection of PLs is compared to the rejection of national brands (NBs) in five food product categories across the UK and Australia. The findings indicate that only 8% of PL non-users in the UK market, and 20% in the Australian market, actively reject PLs. This rejection incidence is higher for PLs than for NBs in three of the five categories. The reasons for brand rejection differ between PLs and NBs. PLs are rejected due to a perception of low quality inferred from extrinsic product cues. In contrast, NBs are rejected primarily because of a negative past experience with a brand. The findings highlight the importance of extrinsic cues for PLs to minimise the incidence of consumer rejection. The generally low rejection of PLs implies that PLs are a real threat to NBs. This paper extends the rejection literature to PLs and quantifies the rejection levels and reasons.
This article develops an information economics perspective on the value (or equity) ascribed to brands by consumers. Unlike research based on cognitive psychology, the proposed signaling perspective explicitly considers the imperfect and asymmetrical information structure of the market. It motivates the role of credibility (determined endogenously by the dynamic interactions between firms and consumers) as the primary determinant of consumer-based brand equity. Thus, when consumers are uncertain about product attributes, firms may use brands to inform consumers about product positions and to ensure that their product claims are credible. Thus, brands may signal product positions credibly. Brands as market signals improve consumer perceptions about brand attribute levels and increase confidence in brands' claims. The reduced uncertainty lowers information costs and the risk perceived by consumers, thus increasing consumers' expected utility. This chain of relations that drives consumer-based brand equity is presented as a structural model and tested empirically in the linear structural relations framework using survey data on jeans and juice. The results are consistent with the proposed relations embodied in the signaling perspective on brand equity.
We model a supply chain consisting of a national brand manufacturer and an independent manufacturer, both of whom are potential suppliers of store brand to a single retailer. The retailer serves two customer segments—a quality sensitive segment (high type) and a price sensitive (low type) segment. The retailer serves these two segments by targeting the national and store brands to the quality and price sensitive segments, respectively. When the national brand manufacturer supplies the store brand he internalizes the effect of store brand quality on the national brand's retail prices. This leads the national brand manufacturer to choose a lower store brand quality than the independent manufacturer. This decrease in store brand quality has the benefit of increased revenues from the high type customers along with an associated cost of decreased revenues from the low type customers. Thus, when the benefit outweighs the cost the retailer chooses the national brand manufacturer to supply the store brand. We show that the retailer will choose the national brand manufacturer to supply the store brand when (a) the size of the high type customer segment is large relative to the low type customer segment, (b) the valuations of the high type customer segment is large relative to the low type customer segment, and (c) the retailer's margin requirement on the store brand is not very high. Overall, these results suggest that retailers who serve a bigger sized quality (price) sensitive clientele would have the national brand (independent) manufacturer supply the store brand.
Marketers can bundle an unknown brand with a strong brand as a new product introduction strategy. Drawing upon the categorization theory and the elaboration likelihood model, this study examines how a new brand can benefit from bundling with a strong brand. The results of two studies indicate that consumers’ quality perception of a new brand will be affected by the brand image of a bundle partner, and this effect is moderated by the bundle forms and the complementarity of bundle components. Academic and managerial implications of these findings are presented, along with suggestions for further research.
Co-branding is an increasingly popular technique marketers use in attempting to transfer the positive associations of the partner (constituent) brands to a newly formed co-brand (composite brand). This research examines the effects of co-branding on the brand equity of both the co-branded product and the constituent brands that comprise it, both before and after product trial. It appears that co-branding is a win/win strategy for both co-branding partners regardless of whether the original brands are perceived by consumers as having high or low brand equity. Although low equity brands may benefit most from co-branding, high equity brands are not denigrated even when paired with a low equity partner. Further, positive product trial seems to enhance consumers’ evaluations of co-branded products, particularly those with a low equity constituent brand. Co-branding strategies may be effective in exploiting a product performance advantage or in introducing a new product with an unfamiliar brand name.
Current research on brand alliances has focused primarily on alliances between two known, national brands. However, there is significant benefit to both parties in an alliance between a national brand and a private brand. Such alliances are gaining importance in the industry but have not been studied by marketers. The basic question explored in this study is whether using a national brand ingredient can benefit a private brand without hurting the national brand. First, a theoretical framework to explain how consumers may react to such an alliance is presented. Next, an experiment was conducted which showed that a private brand with a name brand ingredient was evaluated more positively. However, the evaluation of the national brand was not diminished by this association. Implications and future research directions are discussed.