Determinants of customer brand loyalty in the retail industry: A comparison between national and private brands in South Korea

Finding motivations for customer brand loyalty is one of the most popular academic and practical research fields; in this regard, some scholars have explored motivations in the retail industry. As the concept of private brands has been one of the most widely employed strategies for business success in the industry, comparing private and national brands in terms of customer loyalty is an important topic in the retail industry. Thus, the current research focuses on exploring antecedents of customer loyalty in private and national brands, as well as investigating whether there are notable structural differences between the brands. The results, based on 1,631 responses, indicate that customer perceived service/product quality, satisfaction, trust, and cost are notable determinants of brand loyalty, while the relationship between customer satisfaction and service quality of private brands is not supported. Moreover, both indirect and direct effects of the employed factors on customer brand loyalty are reported.     

The effect of mixed versus blocked sequencing of promotion and prevention features on brand evaluation: The moderating role of regulatory focus

We investigate if presenting a brand's promotion and prevention features in homogenous blocks (e.g., two promotion features followed by two prevention features — a toothpaste that freshens breath, whitens teeth, stops plaque buildup and prevents cavities) as opposed to alternating their presentation order (a toothpaste that freshens breath, stops plaque buildup, whitens teeth, and prevents cavities) affects brand attitude. We find that alternating feature presentation improves brand evaluation among promotion-focused, but not prevention-focused, consumers. In mixed presentations, since each feature physically contrasts with those near it (e.g., promotion features bracketing a prevention feature), the resulting heightened distinctiveness increases the perceived variety of a brand's benefits and fits better with the advancement goals of promotion-focused consumers. We report two studies that support our predictions.     

Cultural influences on brand extension judgments: Opposing effects of thinking style and regulatory focus

Asians are more likely than Westerners to have both a relational (vs. analytic) thinking style and a prevention (vs. promotion) focus. These two chronic dispositions can have opposite effects on their evaluations of brand extensions, the relative magnitude of which depends on whether the extensions are construed at a concrete or abstract level. Results of three experiments demonstrate that when an extension is psychologically close and construed at a concrete level, Asians' disposition to engage in relational thinking leads them to perceive the extension to be relatively more similar to the parent, leading them to evaluate the extension more favorably than do Westerners. On the other hand, when the extension is psychologically distant and construed at an abstract level and thus Asians are unlikely to engage in relational processing, their prevention focus leads them to perceive the extension to be riskier and evaluate it less favorably than do Westerners.     

Effects of pricing strategies and product quality on private label and national brand performance

Using product test ratings and panel data from more than 35,000 participating households in Germany, this study addresses the impacts of price, quality, and promotion shares on the market shares of different products, including national brands and private labels, as well as food and non-food products. The results of a path analysis reveal important differences across the four segments, as well as insights regarding the use of everyday low price and high–low retail pricing strategies. The findings also lead to key implications for manufacturers and retailers.     

The influence of leader regulatory focus on employee creativity

Brockner and Higgins (Brockner, J., Higgins, E. T. 2001. Regulatory focus theory: Implications for the study of emotions at work. Organizational Behavior & Human Decision Processes, 86(1), 35–66.) suggest that a leader's behavior may be perceived as an organizational endorsement of promotion-focused or prevention-focused concerns and that this perception will influence employee behavior by eliciting a congruent state of regulatory focus. We tested this hypothesis using matched pairs of leaders and employees from a Chinese firm and found that employee creativity is positively associated with the promotion focus of the supervisor's behavior. Consequently, through their actions, promotion-focused leaders may increase the likelihood of entrepreneurial action in their firms by eliciting a promotion-focused state of eagerness from their employees.     

Developing brand champions: A franchisee perspective

Abstract

The establishment of a compelling brand lies at the heart of a franchise network’s success. To maintain brand integrity, franchisors rely on franchisees to deliver the brand promise consistently. However, franchisee behaviour is sometimes difficult to manage, impacting negatively on the franchise brand. In adopting an internal brand management theoretical lens, this study provides new insight into the development of franchisees as brand champions. This is achieved through the empirical validation of a model, which encapsulates the dynamics of important antecedent variables (i.e. information generation, knowledge dissemination, the ‘H’ factor, role clarity, franchisee satisfaction, and brand commitment) in creating franchise brand champions. The findings provide significant theoretical and practical implications and lay the foundation for future research in this important research domain.     

Feelings and functionality in social networking communities: A regulatory focus perspective

A sense of community is vital to the sustainability of both face‐to‐face and virtual communities. In this study, we use a mixed methods design to study the motivations that lead to satisfaction in a social media network. In Study 1, we semantically analyze the qualitative comments from a survey regarding the reasons for using social networks (n = 237). Consistent with the literature, the results identify two categories of underlying motivations—hedonic (feelings) and utilitarian (functionality). With these results, we apply regulatory focus theory in Study 2 to propose a structural equation model ( n = 622). This model differentiates between the experiences of promotion‐ and prevention‐focused individuals with social networking based on the core elements of feelings versus functionality . Our findings indicate that a sense of belonging and emotional connection are key hedonic elements and are more relevant for promotion‐focused individuals. For prevention‐focused individuals, the utilitarian and functional aspects of interactivity (influence) and innovativeness (risk) are more important in influencing satisfaction with a social network. Overall, positive and innovative user experience with a social media network requires the creation of an emotional connection, the existence of interactivity between members, and the cultivation of a sense of belonging.     

Trust transfer from manufacturer to private label brand: The moderating role of grocery store format

Guided by the theory of trust transfer, the present study sheds new insights on the role of trust in manufacturer brand on trust in private label brand (PLB), perceived risk and willingness to buy (WTB). The moderating role of grocery store format between trust in manufacturer brand, trust in PLB and WTB is also examined. The empirical data were collected by means of a written survey instrument from consumers. The hypotheses were analyzed with maximum-likelihood estimation. The results revealed the positive influence of perceived manufacturer brand quality on trust in manufacturer brand and trust in PLB. The positive linkage between trust in manufacturer brand and trust in PLB is also supported. The negative influence of trust in manufacturer brand and trust in PLB on perceived risk was revealed and the positive impact of trust in manufacturer brand and trust in PLB on WTB was also confirmed. The findings provide support for the negative link between perceived risk and WTB. Additionally, perceived risk partially mediates the relationships between trust in manufacturer brand, trust in PLB and WTB. Furthermore, store format moderates the impact of trust in manufacturer brand and trust in PLB on WTB. Theoretical and managerial implications are presented based of the research findings.     

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.     

Multi-tiered private labels portfolio strategies: Effects on consumer behavior

Abstract

Retailers wish to expand their standard private label (PL) adopting a multi-tiered portfolio. We study the effects produced by the introduction of two new PLs quality-tiers (economy and premium) on the market share of various national brands (NB; premium-quality and second-tier) and the standard PL. This study proposes a model that accommodates three effects (similarity, attraction, and compromise) for understanding how the introduction of economy and premium PL may affect market incumbents. This study also analyzes the effects of introducing new PL quality-tiers for customer segments. Our results indicate that when economy and premium PL are introduced in the market, the choice probability of standard PL decreases, especially for high purchase quantity customers and PL loyal customers. In addition, introduction of a premium PL decreases the choice probability of second-tier NB and premium-quality NB, especially for PL loyal customers and high purchase quantity customers.     

In the eye of the beholder: How regulatory focus and self-efficacy interact in influencing opportunity recognition

Although there is evidence that regulatory focus is associated with opportunity exploitation, there is a lack of research examining its role at the early stages of opportunity recognition. The present study makes two major contributions to address this gap. First, we demonstrate that entrepreneurs' promotion focus is positively related to opportunity recognition, whereas prevention focus is not significantly related to opportunity recognition. Second, integrating two theories of self-regulation – regulatory focus theory and self-efficacy theory – our findings reveal that a high promotion focus compensates for entrepreneurs' low levels of creative and entrepreneurial self-efficacy in opportunity recognition. Our study extends extant cognitive theories of opportunity recognition.     

Consumer responses to trade-offs in eco-friendly clothing: The moderating effects of fashion leadership and regulatory focus

Consumers of eco-friendly clothing often face trade-offs between eco-friendliness and other product attributes. Across two experiments, we investigate the moderating role of fashion leadership and regulatory focus in such trade-off situations. Our results suggest that while non-fashion leaders are willing to trade-off hedonic attributes for eco-friendliness, fashion leaders are not willing to trade-off either hedonic or utilitarian attributes. It is also suggested that prevention-focused fashion leaders are more likely than promotion-focused fashion leaders to trade-off hedonic attributes for eco-friendliness. Implications for practitioners as well as directions for future research are discussed.     

Customer brand personality perception: A taxonomic analysis

Abstract

The brand personality concept has received considerable attention. However, researchers have paid little attention to how homogeneous consumer brand personality perceptions are. This study attempts to fill this gap by analysing survey data (n?=?603) collected from respondents evaluating seven mass-market consumer brands. Using cluster analysis, it identifies four typical brand personality constellations. The authors find variance among brand personality perceptions across brands, but more interestingly also within perceptions of individual brands. This result points to issues in implementing brand personalities in marketing practice. The article concludes with theoretical and managerial implications.     

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.     

Measuring customer-based place brand equity (CBPBE): an investment attractiveness perspective

Place branding has increasingly gained attention in last the two decades. However, there is a lack of measuring instrument for place branding effectiveness and subsequent place brand equity. This study develops a measurement instrument for customer-based place brand equity (CBPBE) for a place from the investment attractiveness perspective. Exploratory factor analysis followed by confirmatory factor analysis were used which resulted in an 11-item CBPBE scale. The dimensions of the scale consist of brand awareness, brand image, perceived quality, and brand loyalty. The study makes both theoretical and managerial contributions by offering a refined scale for the measurement of CBPBE which provides a tool for effective place branding activities and strategies.     

Private label personality: applying brand personality to private label brands

Private label brands (PLBs) are an important facet of the retail offering within the supermarket sector. Although research has focused on the risk factors of private label purchasing, there has been little research that explores the brand management of private labels including the development of a brand personality. In this study, we investigate how the Aaker brand personality scale applies to a PLB available in two different retail chains and examine its effect on customer attitudes towards private label quality. A factor analysis of these brand personality measurement items shows that five dimensions, confidence (a new dimension), sincerity, ruggedness, excitement and competence are relevant for PLBs. Although much of the original Aaker scale was included in the analysis, one factor, sophistication, was not evident. A regression analysis shows that all private label personality dimensions influenced the private label quality measure with the confidence and sincerity dimensions having the greatest impact.     

Consumer responses to mobile coupons: The roles of shopping motivation and regulatory fit

Retailers increasingly use mobile coupon services to deliver promotional offers to consumers. This paper draws on the theory of regulatory focus to explain mobile coupon redemption. The paper proposes that redemption depends on the extent to which a mobile coupon requires consumers to divert from their focal shopping motivation. Regulatory fit, the perception of receiving an offer that is relevant to consumers' regulatory goals, mediates this divergence effect, but only for utilitarian shoppers. Results from two scenario experiments support the main hypothesis and show that utilitarian shoppers perceive greater regulatory fit when an offer is compatible with their focal shopping motivation. In contrast, hedonic shoppers perceive no difference in regulatory fit when an offer diverts them from their focal shopping motivation. This explains why hedonic shoppers redeem a wider variety of offers than utilitarian shoppers and why utilitarian shoppers require more personalization to generate coupon redemption.     

Private label brands: major perspective of two customer-based brand equity models

In recent years the retail industry has been characterized by the fast growth of private labels, with an increase of the offer of private labels and the enhancement of their value in the marketplace. This research focuses in private label brand equity to deepen the understanding of its origins, by analyzing two alternative customer-based conceptual models. The present study was developed in the large retailing industry, comprising different retailing formats that offer private labels to consumers. Our findings suggest a conceptual private label brand equity model, which is slightly different from the Aaker's brand equity model, considering store image as an antecedent and stressing its importance in building and enhancing private labels' brand equity. Additionally, retailers searching for successful ways to compete in the retail market need to examine in more detail the customer-based brand equity related to their private labels.     

A new dualistic approach to brand passion: Harmonious and obsessive

Brand passion is increasingly seen as the ultimate emotional connection between the consumer and a brand. Limited previous research relied exclusively on Sternberg's triangular interpersonal theory in developing the brand passion concept. This research paper integrates consumer brand identity theory, refines the definition of brand passion, and proposes a dualistic approach to brand passion which distinguishes between two different types of brand passion: harmonious and obsessive.     

Innovation Cloning: The Introduction and Performance of Private Label Innovation Copycats

A controversial trend in grocery is the practice by retailers to quickly copy innovative national brands (NBs) launched by manufacturers with their own private label (PL). In a sample of 1,100+ NB pioneers launched in The Netherlands between 2005 and 2009, 11.7% faced a PL copycat by at least one of the seven leading grocery retailers. These copycats obtained an impressive 5.8% category share at the retailer in the year after launch, thereby outperforming the NB pioneers they copy (2.1%) as well as non-copycat PLs launched in the same period (4.4%). Using a two-step selection model, we identify what motivates retailers to copy NB innovations, and what factors drive subsequent copycat performance, thereby taking into account retailers’ innovation assortment decisions. As expected, retailers are more likely to copy successful NB innovations, and these copycats indeed perform well in their stores. However, retailers do not only take into account financial considerations. They are especially hesitant to copy heavily promoted NB innovations and those launched by manufacturers with a strong reputation. To enhance copycat performance, retailers should keep prices of the copycat sufficiently below those of the NB pioneer and limit its promotions. Apart from guiding retailers in their copycat decisions, also NB manufacturers can learn from this study how to discourage retailers from imitating their innovations.