Consumers’ choice of private label considering reference price and moderating effect |
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| Institution: | 1. College of Business Administration, Shanghai Business School, Shanghai, 201400, China;2. School of Economics and Management, Tongji University, Shanghai, 200092, China;3. Business School, Changshu Institute of Technology, Changshu, Jiangsu, 215500, China;1. Collaborative Innovation Center for Chongqing''s Modern Trade Logistics & Supply Chain, Chongqing Technology and Business University, Chongqing, 400067, China;2. School of Management Science and Engineering, Chongqing Technology and Business University, Chongqing, 400067, China;3. School of Economics and Management, Southeast University, Sipailou 2, Nanjing, 210096, China;4. Business School, University of Greenwich, London, SE10 9LS, UK;1. School of Economics and Management, Northwest A&F University, Yangling, China;2. School of Economics and Management, Dalian University of Technology, Dalian, China;1. XLRI - Xavier School of Management, Jamshedpur, India;2. Indian Institute of Management, Kashipur, India |
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| Abstract: | Retailers frequently place private labels (PLs) next to the top-moving sales national brands (NBs) and utilize comparative pricing that is related to the national brands. There is thus always an external reference price between the private labels and the national brands. In this study, two categories of products were selected, and a hierarchical non-linear model used to study the impact of external reference prices on consumers’ choice of private labels. In addition, the effects of package size and average disposable income (ADI) were introduced into the analysis for the relationship between external reference price and consumers’ choice of private label. The findings show an inverted U-shaped curve between consumers’ choice of private labels and the external reference price discrepancy. Consumers in areas with high ADI are more likely to buy private labels. Package size and ADI have different direct and moderating effects on two categories of products. This study contributes to reference dependence theory and category management. |
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| Keywords: | Private label Consumer choice Reference price Moderating effect Hierarchical nonlinear model |
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