Coupons and private labels: A cross-category analysis of grocery products

This article examines the influence of coupons on private label shares of grocery products. The impact of national brand and private label coupons, distributed by manufacturers and retailers, is examined. A consumer framework and a typology of coupon effects are developed to explain different types of coupon usage behavior. Aggregate scanner panel data on 480 product categories are used in the analysis. Both the type of coupon and the method of distribution (by manufacturer or by retailer) are found to be important determinants of private label share response. Couponing activities by the national brand manufacturer are negatively related to private label share, thus indicating that they may be effective deterrents of private label penetration. However, couponing activities related to private labels do not help increase private label shares. The surprising finding is that national brand store couponing activity is positively related to private label share.     

商店忠诚、自有品牌态度及其购买意向的关系研究——消费者交易倾向和产品社会可见性的调节作用

文章探讨商店忠诚、自有品牌知识对自有品牌态度的影响,以及自有品牌态度对购买意向的影响,并考察消费者交易倾向和产品社会可见性对上述关系的调节作用。研究发现,自有品牌知识和商店忠诚对自有品牌态度都有正面作用,交易倾向正向调节自有品牌知识对自有品牌态度的影响,负向调节商店忠诚对自有品牌态度的影响;自有品牌态度对自有品牌购买意向有正面作用,产品的社会可见性负向调节这种影响作用,质量易评估性的调节作用缺乏显著性。     

Consumer Willingness to Pay for Local Designations: Brand Effects and Heterogeneity at the Retail Level

This study examines consumer willingness to pay (WTP) for packaged ice cream with local, private label, and national brands at the retail level. Data were collected through in-person surveys conducted at retail grocery outlets in Utah in 2012. Study results suggest that shoppers are willing to pay significantly more for the national and local brands over the retailer’s private label brand. In fact, the local brand with the state-sponsored designation (Utah’s Own) had a WTP equal to that of the national brand. The use of local designations or labels is important as shoppers were not willing to pay a premium for the local brands in absence of the locally produced or state-sponsored designation label. Additionally, consumer WTP for different brands and the degree of response to local designations varies substantially by consumer attributes. These differences suggest that locally designated products do not compete directly with private label products in the market. This study provides clear evidence of the value of state-sponsored designations, as well as locally produced labeling for food products marketed in a traditional retail setting.     

Offering value and capturing surplus: A strategy for private label sales in a new customer loyalty building scenario

The competition between private label brand and national brands in the diaper category is investigated from the view of the private label brand manager. In this category, new customers routinely enter the category buying entry-level diaper sizes (for infants) and then progress to buy larger diaper sizes over time (as their child grows older). Thus, consumer comparisons between the private label brand and national brands are focused on single diaper sizes during any single purchase scenario. Because private label brands are known to suffer from low quality perceptions that often understate the true quality levels of private label brands, this paper advances a pricing strategy to optimize private label performance in the category. The private label brand should price significantly low for small diaper sizes (maintaining a sizeable price gap from national brand competitors). Then, in most cases, the private label brand should shrink the size of this price gap for large diaper size offerings. This strategy will successfully offer initial value to new customers, build private label brand quality perceptions and loyalty, and then capitalize on these gains through higher dollar sales in the late stages of the customer relationship. The price gap shrinking strategy is found to be generally effective, but high national brand competition and too high of an initial price gap diminish the effectiveness of the strategy.     

Private label positioning: Quality versus feature differentiation from the national brand

This paper investigates the retailer's problem of positioning her private label against two national brands in terms of both product quality and product features. Using a demand function derived from consumer utility, we show that the private label's best positioning strategy depends on the nature of the national brands’ competition and its own quality. When the national brands are differentiated, a high quality private label should position closer to a stronger national brand, and a low quality private label should position closer to a weaker national brand. When the national brands are undifferentiated, the private label should differentiate from both national brands.     

Defensive strategy against a private label: Building brand premium for retailer cooperation

We build a game-theoretic model of price competition between a national brand manufacturer and a retailer that also sells its private label. In particular, we examine a national brand's strategy of building brand premium in the context of channel coordination. The importance of national brand's brand equity has been well-documented in many empirical and behavioral studies. We reinforce the argument that building brand premium should be the first line of defense for a national brand instead of aggressively cutting wholesale price. Not only does the national brand manufacturer benefit from it, but also the retailer who sells both the national brand and its own private label has less incentive to promote the latter. Therefore, it can induce retailer cooperation, which is essential for a successful strategy in a distribution channel.     

Prices Paid in Grocery Markets: Searching Across Stores and Brands

Using a large sample of prices paid for 21 homogeneous grocery products available in several brands in each of 16 markets, we simulate the search behavior of a consumer following different shopping strategies using as many as four supermarkets. We find that price search can lead to substantial savings. Brand switching can generate savings at least as large as visiting multiple stores to find the lowest price for a single brand. Buying a private label is usually a better way to save than any amount of search for low prices on national brands. A case study in a small metropolitan area grocery market yields results substantially the same as the simulation results.     

A Positive Theory of Private Label: A Strategic Role of Private Label in a Duopoly National-Brand Market

This article offers an economic rationale for national brands to provide private labels to their retailers. We build a game-theoretic model that analyzes the interactions among two national brand manufacturers and one common retailer. In an interesting strategic role, the private label mitigates the promotion competition between the two national brands and provides benefits for all three members in the channel. Our analysis shows that offering a private label can be a credible commitment from a national brand manufacturer that it will not engage in promotions and decrease the incentive of the national brand rival to engage in promotions. In this way, we attempt to provide a reason for why national brand manufacturers provide retailers with private labels in practice. In addition, we discuss the optimal quality level of private labels.     

Analyzing the effects of private-label supplier disclosure on retailer image

Private-label retailers' disclosures of dual manufacturing agreements—that is, agreements with manufacturers that produce both their own national brands and private labels—can affect the images associated with the retailers. In this study, an experiment reveals moderating effects on retailer images, according to the images of both the national brand manufacturers and the retailers; and also depending on the brand equity of the private label. A low-image retailer's disclosure that a national brand manufacturer supplies its private label causes consumers to perceive that the retailer has a higher image. However, the positive effects of private label supplier disclosure on the retailer's image are weaker when the private label enjoys high equity.     

The moderating effect of average wage and number of stores on private label market share: A hierarchical linear model analysis

Existing research on private label market share is primarily in the context of the Western market. The Chinese market context research is scarce, although private labels are developing rapidly in the past several years. This study investigates how the average wage and number of stores affect the Chinese market's private label market share. More importantly, this paper examines the moderating effect of the average wage and the number of stores on the relationship between the private label market share and product assortment as well as the relationship between the private label market share and pricing. Data collected from a Chinese supply chain dyad is analyzed to study category management using hierarchical linear models. The results reveal that the average wage and the number of stores positively affect the private label market share. Furthermore, the average wage enhances the negative effect of the number of brands, weakens the negative effect of the private label price, weakens the positive effect of national brand price. Meanwhile, the number of stores enhances the positive effect of the SKU proliferation of private label, enhances the negative effects of the number of brands, and enhances the negative effect of the private label price. This study contributes to category management. Furthermore, the findings will be valuable to domestic and international grocery marketers and retailers operating private labels in China.     

“Sorry,the product you ordered is out of stock”: Effects of substitution policy in online grocery retailing

Postpurchase out-of-stock (PP-OOS) often happens in an online grocery context, where products appear to be available at the time a consumer places an order, but become OOS when the order is to be dispatched. This paper investigates two substitution policies that can mitigate negative responses: substitutions can match (i) on the dominant attribute and (ii) with a product from the consumers’ past purchase portfolio. According to data collected through two computer-simulated purchase experiments, involving more than 3,000 households and five product categories, matching the substitution on the dominant attribute increases acceptance, but this dominant attribute varies across category differentiation level (flavor for horizontal differentiated categories like cereals or crips vs. brand for vertical differentiated categories like margarine or ketchup). Category differentiation also informs acceptance of national brand or private-label flavor substitutes, such that, same-flavor private label is prefered more in horizontal differentiated categories. Matching on the basis of previous purchases has positive effects for both category differentiation levels, and when combining both policies, the previous purchase matching effect grows stronger for same flavor, rather than same brand, matching. These detailed insights establish several key managerial implications for substitution policies in online grocery contexts.     

Consumer attitudes and loyalty towards private brands

Private or store brands improve the efficiency of consumer decision making by offering equivalent quality products at lower prices. The present study evaluated consumer attitudes towards private brands with the goal of understanding their appeal in order to enhance efforts to convince more consumers to buy them. We used three samples (ns = 279, 245 and 305) of US consumers to compare attitudes of buyers of private and national brands in three product categories: orange juice, cereal and bottled water. The results show that private label buyers (23% of orange juice, 6.5% of cereal and 14% of bottled water buyers) consider brands themselves to be less important and private brands to offer better performance than do national brand buyers. When asked about specific brands, national brand buyers tended to be price insensitive towards national brands, and private label buyers price insensitive towards store brands. In addition, the national brand buyers saw some of the national brands to be more relevant to their lifestyles and needs, but the private label buyers saw the private labels the same way. Being relevant to consumers' lives appears to influence brand selection. Besides touting lower prices, private brand promotions might stress the equivalent performance of private labels and create promotions showing how these brands can be relevant to consumers' lifestyles and needs.     

Buying private label in durables: Gender and other psychological variables

In the context of durables, this paper analyzes some key psychological variables identified in convenience goods literature, for individuals facing private label purchase decisions: private label attitude, price consciousness, brand consciousness and involvement with the product. The role of gender in the relationships among those variables is also examined. On two different durables and with a sample of 432 individuals, all the proposed relationships are significant, except for price consciousness. Additionally, some gender differences among those relationships appear. Data suggest that being a woman (not a man) plays a key role in private label purchase intention.     

Stimulus generalization in classical conditioning: An initial investigation and extension

Conditioning as a mechanism for attitude change has received much attention over the past 10 years. This research examines stimulus generalization, the extent to which a response conditioned to one stimulus transfers to similar stimuli. Stimulus generalization relates to both brand extension and private‐label imitations of national brands. Two studies collectively provide evidence that attitudes which are conditioned to a particular brand can be transferred to a product with a similar name in the same category, as well as a product with the same name in a different category. Study Two suggests that stimulus generalization effects may be relatively transitory. © 2000 John Wiley & Sons, Inc.     

Supplier inferences to enhance private label perceptions

In large part due to the expertise of many manufacturer brands that are private label suppliers, the objective quality gap between private labels and leading manufacturer brands is small-to-none in many cases. The current research examines how consumer beliefs about the manufacturer brand origins of private labels may enhance their subjective appeal, by testing the effectiveness of two retailer-controlled tactics that create specification similarity and sourcing inferences regarding private labels, and the degree to which these inferences close perceptual gaps between private labels and targeted manufacture brands. Both the private label copycat packaging and invitation to compare to the manufacturer brand tactics are found to create such inferences and significantly narrow perceptual gaps, while enhancing retailer attitude.     

Factors affecting attitudes toward private labels and promoted brands

This work examines whether promoted brands and private labels attract different or similar consumers through psychographics and store image that drive purchase attitudes for these brands. The results using regression analysis demonstrate that these attitudes are driven by differences in psychographics and store image. Attitude toward promoted brands is characterised by positive store image, smart shopper self-perception, need for affiliation, and money attitude regarding power-prestige and anxiety. Private label attitude is characterised by more positive store image, and money attitude regarding retention and distrust. Noticeably, the conclusion of Ailawadi et al. (2001) regarding the indirect effect of demographics on the feasibility of using store brands and national brand promotions via psychographics appears weak, since we conclude that the impacts of demographics on the two types of purchase attitudes are weakly funneled through psychographics.     

The influence of retailing-mix levers on private label market share: The case of the Italian FMCG market

An in-depth analysis of the impact of retailing-mix levers on private label market share in the Fast Moving Consumer Goods sector in Italy is made. The direction and intensity of the impact of assortment, price and sales promotion is measured for different product categories. OLS and GMM regressions run on an IRI Group dataset indicate a strong positive effect of product range, which can be considered as a proxy of on-shelf brand visibility. Increasing private label assortment share thus appears to constitute the key supply-side factor in augmenting sales share on the Italian grocery retailing market.     

Re-thinking the relationship between store brand attitude and store brand loyalty: a simultaneous approach

Academic attention to the relationship between store brand attitude and store brand loyalty is insufficient. Our paper fills this research gap by proposing and testing a theoretical model that demonstrates a reciprocal and mutually-reinforcing relationship between store brand attitude and store brand loyalty. The literature review identifies independent variables as potential predictors of both characteristics. We apply a two stages least squares model to data that come from a survey of Spanish households. The findings corroborate some of the propositions of the conceptual model: the reciprocal relationship between the two dependent variables; the influence of risk, deal proneness, price and value consciousness and extrinsic and intrinsic cues on store brand attitude; and the influence of exploration, deal proneness, store loyalty, store brand trust and store brand affective commitment on store brand loyalty.     

National versus private brand: A regulatory focus perspective

Why do consumers choose a private versus national brand? A between-subjects factorial design was used to address this question in two product categories: shampoo and athletic shoes. Three determining factors were used—regulatory focus: promotion versus prevention; brand types: national versus private; and attribute framing: hedonic versus utilitarian—to predict consumer attitude towards the brand, its ad, and purchase intention. The results provide support for the interactions between regulatory focus and attribute framing for shampoo, and between regulatory focus and brand types for shoes. When exposed to shampoo ads, promotion focused consumers have a more positive attitude toward the ad and a higher purchase intention if the ad features utilitarian rather than hedonic attributes. Further, both promotion and prevention focused consumers prefer national brands of shoes to private labels. One possible explanation may lie in private versus public consumption of shampoo and shoes.     

Store brand and national brand promotion attitudes antecedents

Retailers compete against national manufacturers by launching store brands. National manufactures regularly use brand promotions to fight store brands back. The purpose of this article is to find out whether attitudes toward national brand promotions and store brands have similar or different conceptual antecedents. The study presents and tests a model of the effects of shoppers´ characteristics (price and non-price-related) on attitudes toward store brand and national brand promotions. The results support that constructs relating to price impact both store brand attitude and national brand promotion attitude, but the strength of some of these relationships differ. Other shopper characteristics like brand loyalty and store loyalty, have similar negative and positive effects, respectively. These slight differences suggest that promotions of national brands might be a good tool for fighting back store brands, but manufacturers need to design and target these promotions carefully in order to avoid head-to-head competition.